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The Globe and Mail

Transcript: How to change your corporate culture

Former General Electric CEO Jack Welch


KARL MOORE: This is Karl Moore of the Desautels Faculty of Management at McGill University, Talking Management for The Globe and Mail. Today I am delighted to speak to Warner Burke, who is a senior professor at Columbia University in New York.

Good afternoon, Warner.

WARNER BURKE: Hi Karl, good afternoon.

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KM: CEO-led change, you are saying, is the most powerful. How many changes can a CEO lead in a year- or five-year period? Is it one or is it multiple?

WB: Well Karl it's not multiple, that's for sure. Leading change requires so much energy, so much effort and so much focus, how many times can you do that? I don't think you can do that once or twice over a given space of time – like five years for something like that. So, one or two is it. [Jack]Welch lasted a long time at GE and he did multiple change efforts starting with "Work Out" and then he did the "Six Sigma" but he had a long time and long tenure as a CEO. Most CEOs, today, don't last that long; therefore they have to concentrate on whatever it is they are trying to bring about in terms of change. So that's for sure.

KM: So Warner, you said one or two changes in a five-year period, more or less, maybe three at the most. How does a CEO decide what those critical changes are? Because this is essential that he or she are going to do it as a CEO. How do they decide what they should change?

WB: I think what they have to decide, in the period of time that they have, is, of course, what is most important but [also]what is most important to the business with respect to the future. Competent CEOs must be able to think in the future – they must be able to think more than five years down, as a matter of fact. So I think that is the most important thing. Now, it's hard to predict the future, we know that, but you have to try and you have to set your organization up so that it can respond much more nimbly than organizations are capable of doing. This then brings us all back, again, to the culture.

KM: Warner, you have talked about the importance of corporate culture change. How do you bring about corporate culture change and how long does it take?

WB: Well the main thing, Karl, is that you don't change culture by trying to change the culture – let's be clear about that first. Culture consists of values, long-standing norms and ways of doing things over many and many decades. Do you [think]you are going to change that very fast? Absolutely not. That is about attitudes and that is about values. You change culture not by hitting your head against the wall about values and about norms and attitudes, but you start with behaviour.

So you have to determine, as specifically as you can, the kinds of behaviours that will get you the culture that you desire and you are going to concentrate on changing those behaviours. How are you going to do that? You are going to give your key managers feedback on their behaviour, that's what you are going to do! In a 360 way, for example, and get them focused on the kind of day-to-day behaviours that will be required to bring your organization to another place – culturally speaking. How long does that take? Years, not months. So the CEO has got to be dedicated to bringing about the change over a period [of time]

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British Airways, when I did the work there, the culture change took five years – but we did do it. I think we could do it today in three because we know more now than we did in the 1980s about how you bring about culture change and how to focus it more than we did then. So I think we can do it, but we are not talking months – we are talking years.

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