Building a culture with intention and a design perspective unlocks business and growth advantages that can boost organizations to higher levels of performance, competitiveness, and cultural flourishing like never before. Join Thierry and Dan to learn first-hand insights and tips that you can implement right away.
Join Dan Strode, a seasoned culture and innovation evangelist with 20+ years of experience helping organizations build their most successful versions all around the world, and Thierry de Beyssac, Axialent’s senior global human resources strategy consultant and a coach for C-suite leadership development, to learn the insights and actionable tips you need to unlock the culture advantage in your organization.
Here’s the full webinar. Enjoy!
You can also read the webinar transcript if you prefer:
Thierry:
Hello, everyone. I hope you are doing great. We are still waiting for more people to join, so let’s wait a couple of minutes more. And Daniel, meanwhile let’s try to leverage and benefit from those two minutes. I’d like to ask you a couple of questions, actually. So where are you connecting from? And I have a specific question, what did you do for Halloween?
Daniel Strode:
So Terry, thanks for having me today. I’m connecting from Madrid here in Spain. And what did I do for Halloween? Well, in Spain, Halloween’s becoming more and more popular so in the school, they were doing a lot of Halloween activities on Friday before. Then I had some parties on the weekend, and then Monday was Halloween and we went trick or treating in the streets. And some people they open the door, they give the candy to the children, and some people, they don’t open the door. So step by step, year by year, we’re seeing more and more fun. And it was nice. I got my two children dressed up. My baby was a mummy, so in this mummy costume, and my four-year old girl as a Dracula, or a vampire, Vampiresa. So was having the blood coming from the mouth and everything, and it was quite a nice Halloween. And what did you do? I hear that you always hold a special party to celebrate Halloween, it’s a big thing for you.
Thierry:
Yeah, actually. As you know, I’m living in Ibiza, the magic island of Ibiza. And if I’m famous for one thing in Ibiza, it’s for our Halloween party that we do every year in my own house. And this year we had 70 friends, very good friends. And by the way, this is me and my wife. And the rule of the game is you come as a couple with one bottle of champagne, or French champagne or it could be Cava, the Spanish Catalan champagne and we should just not be able to recognize you the way you are disguised. So that’s it, and it’s a fantastic party. So we had a lot of fun and Halloween is definitely not part of our culture, I’m French by origin. I think you’re British, is that correct?
Daniel Strode:
Yeah, that’s right.
Thierry:
Okay. But still in Ibiza anything is a pretext for parties. So this is the party I’m organizing every year. So in last year I would never show you the picture because it was very, very different I would say. Actually I was a woman, much more beautiful than the man I am actually. So I hope that we get more people joining because of those back to back meetings, conference calls, there are always people joining five minutes late. So now it’s three minutes. So we are going to start.
And first welcome everyone. Thank you so much for joining us to this webinar. It’ll be a 50 minutes webinar, good morning or good afternoon depending on where you are connecting from. So basically I’m Terry [inaudible 00:03:26] a partner at [inaudible 00:03:28]. And I’m living in Ibiza as I have already shared and I have the privilege today to co-facilitate and interview Daniel Strode. Let me maybe introduce you, Daniel. Daniel is the head of HR strategy and culture at Bank of Santander living in Madrid, which is [inaudible 00:03:53] region and he is also what we call the author of a book and a culture and innovation evangelist. I love him for that, he is an evangelist of the business We do, so this is really good. And is the author of a new book called The Culture Advantage, Empowering your People to Drive Innovation. So Daniel, is there anything you would like to add on you and…
Daniel Strode:
Well, it’s a very, very nice introduction. My only cross in life is that I’m not a real Madrid supporter. My home team is Luton town in the UK, struggling away in the lower divisions most of my life. So apart from that, everything good.
Thierry:
So be careful, you will have some fights with the Mundial in November, the 20th.
I don’t know anything about football. I have some friends who are listening to us who are really experts in football, some of them defending some very famous clubs in Mexico, in Argentina, in Brazil. But I don’t want to have any problem with those guys. So please everyone who are listening to us don’t hesitate to use the question tab to make any question or comment during this webinar. Okay, so let me start with the first question, Daniel, how did you do, not to become completely schizophrenic? And let me explain it. What is your experience at practicing in real life at Bonk of Santander? There is something that we are preaching in the book or vice versa. I know what it is between preaching and practicing. I’ve been a consultant for 26 years and also a CEO in 12 different countries and I have to manage this preaching and practicing, so what was your experience?
Daniel Strode:
Yeah, a good and difficult first question, Terry, which I think the good news is from my perspective at least, it’s good news, I was a practitioner first and foremost. So what I talk about in the book are some hints and tips and rules on how to improve the culture. But they’re things not that I just dreamt of through academia, but they’re things that I’ve experienced myself or other companies have experienced. And I think that’s always important because when we think about culture change, it’s often much more difficult to change the culture than you would think. And when you look at textbooks, when you read articles, when you listen to interviews, it seems very easy, but actually the reality is something different. So being able to be the practitioner first and scratch the surface, that’s been a good journey.
Thierry:
And it makes much send. In very few and simple words, how do you explain culture? And I have another question with this one. Why do you focus on innovation in your book? So what is culture and why innovation?
Daniel Strode:
So to me, culture is the way we do things around here. And I like to add a short phrase at the end of that, which is to say when no one is looking. So the way we do things around here when no one is looking, and that’s very important to me because culture of course is how we go about doing our day to day, how we go about doing the things within the company, how we act as individuals, how we work together as teams. But when no one is looking, when there’s no reward to be gained, you need to live your culture because you believe in it, it’s the right thing to do, and it’s your sustain sustainable advantage. When you don’t believe in it and you only do the culture because you think it’s going to give you great results or it looks good on your marketing and your branding, then of course you will be doomed to failure.
So how you do things when no one is looking. And then why have I focused on innovation? Well, the world is in a difficult place. We’re in the fourth industrial revolution, everything’s becoming more digital. The pace of change has never been so fast and never will it be so slow in the future. And what we are seeing is we are seeing companies, and I’m talking about the top companies in the world here. So the ones in the S&P 500, the ones who are the biggest 500 companies in the US and globally, they’re actually having a shorter and shorter lifespan.
Back in the 1960s they used to live to 70 years old and now they’re living to less than 20 years old on average. And what that means is by 2027, 75% of the giants in the S&P 500 today will not be there statistically in the future. So innovation is absolutely necessary and I think we can force companies or push innovation through the culture that they have. And that’s what really piqued my interest, how to get companies to change, to think in new ways, to behave in new ways and keep prospering basically.
Thierry:
Wow. I love what you just said about culture is what you do, what you think, how do you behave and so on when no one is looking, when there is no specific reward because then you believe in it. I love it. I never said that to my clients. I’m going to use your words in the future because this is so true actually. I love it. I love it because it reminds me something that I’m trying to share with the top leaders and the rest of the organizations. You need to be the future not to behave in the… It’s exactly what you say. If you are the future, you are the culture even if nobody is looking. I love it. So thank you for that and thank you for the response about innovation. So let me ask you another question. What has been happening at Bank of Santander with regard to their culture? You have been working for a while on this, for six years if I’m not wrong.
Daniel Strode:
Yeah. We started the culture journey six years ago and it’s been a process for us. So we are trying to change the culture or enhance or reinforce it for 200,000 people, 32 different countries around the world. So we come from a place where there’s lots of different factors at play. We come from a Spanish family. Spanish companies are typically hierarchical, operate in a very structured basis, especially in banking and finance, always driven by the numbers. So six years ago we embarked on the journey of creating a common culture the Santa way, which is our way of doing things. And we’ve spent probably the first 12 months, 18 months sharing the message, why is culture important? This is going to be our culture. And we co-created it with the employees of course, which is really important. And we were doing what I would call the awareness campaign for the first period of time.
The second period of time, so the following two years, was more about embedding the behaviors and the culture that we wanted to foster into all of the processes. So did we change the reward system? Did we change performance management? Did we change recognition? Did we change who we hired, who we promoted? Changing all the processes? And then laterally in the last two years we’ve really said we’re in a position where we are embedded now people know the culture, they live the culture, and now we can take very strategic targeted actions just to keep boosting and improving. But the key is this is a long runway, it takes a long period of time.
Thierry:
Wow. Yeah, I recognize the typical journey and some people might say, wow, six years is so, so long. But the point is every year you have something different, you have a progress and so on. Is there any specific issue somewhere where you have really changed the future? Any specific and impactful application for example, that you can share with us?
Daniel Strode:
I think our change in performance management really changed the dial for the bank. So we were the first major bank in the world to go to a performance model where you are evaluated 50% on what you do and 50% on how you do it. And that sent a very important message to the organization, which was we value how you go about your daily work, just as important as what you do in the results you get. And that sends the message to the organization that those brilliant talented people who sell lots of products but are jerks are not welcome here anymore.
That’s not how we want to operate. We value very highly collaboration, teamwork, listening to the customers, those kind of things. And as soon as we made that change, we started to see people really sit up and take notice as you can imagine being a bank. And actually another interesting reflection on that is the regulators also took notice of this model and particularly enjoyed it and said, we think this is very good because it shows that you’re managing risk, you’re caring about the people and so on. So really good outcomes in that respect.
Thierry:
It might not be so new. These 50% on what, 50% on how. for example, they did it 30 years ago. I was a young consultant at that time working with them. But in a highly regulated industry like the banking industry, that’s very innovative to say the truth. And that’s pretty cool. And by the way, I would not spoil your book nor ask you to describe the eight concrete principles that I’ve seen in your book and the five behaviors that make a company innovative and through a innovative culture. But if you will have to focus and to share just one of those five behaviors, which one could you give us with a real life example of what you have perceived on this specific behavior? Which one would it be from the five? You can name the five and then tell us which is the one.
Daniel Strode:
Sure. I mean in the bank we’ve got think customer, embrace change, act now, move together and speak up. And the one I like a lot or the one that gets a lot of focus and relates to a lot of the material in the book is actually speak up. So how do you create an environment where colleagues, customers as well, shareholders and communities, but colleagues can speak up, share what’s on their mind, help you improve day in, day out and not afraid to take risks and to fail, not afraid that they’re going to have a negative consequence because they say something and so on so forth.
And I’m observing this in many companies around the world that this is a particularly hot topic and to me it comes down to, do you have an environment of psychological safety? So do you have an environment where people are not afraid to speak up, where they’re not afraid to fail and therefore you boost your innovation because people can speak freely, but it’s very hard to do. And of course there are some concrete things to do, but if I tell you an example, perhaps we’ll learn a bit more and share a bit more in a lighthearted way rather than going to theoretical.
I try not to be, but I’m a little bit of a geek. And during the COVID 19 I was at home, it was a February night in 2021 and I’m there on the SpaceX website and SpaceX is Elon Musk’s company to send rockets into space and basically is a private company, I’ve worked out the rocket is about 45 million dollars in parts and labor alone. And they were live streaming the Falcon Nine, which is one of their premier products being sent off into space and then coming back down to land. So you’ve got this fantastic YouTube like video on their website, the chief engineer of SpaceX is doing the voiceover and explaining everything. You see a beautiful rocket going up, you see all the fire and the flames and everything exciting. And as it’s coming down to land it explodes, 45 million dollars literally gone up in smoke just like that.
And I thought the chief engineer would be a bit upset, a bit angry and maybe I say he’s not going to start shouting but he’s not going to be happy. And his response and his voiceover took me by a surprise. He said, “Well we have a lot of good data, we’re going to improve the next time, we’ll learn from this mistake and this accident.” And lo and behold, one month later, SpaceX is sending the Falcon Nine up and down, landing it perfectly, no problems, no issues whatsoever. And it dawned upon me that there was a level of psychological safety within the company there where they wanted to learn, where they wanted to improve, where they were not finger pointing at one another and laying blame on who did what or who should have done something. And that was really interesting to me. And I compare and contrast it in the book to the case of Boeing, which is a fantastic example, very sad example of what happens when you don’t have psychological safety.
And we all know the 2737 Max plane crashes that happened, really 100s of fatalities, horrible tragedy that could have been avoided. And I say that it could have been avoided because the US Congress did a congressional report into the accidents to find out what were the learnings and how to stop that from happening in the future. And they cited the word culture no less than 60 times in their report as one of the main failings that contributed to the crash. And they found that the engineers within Boeing knew that there was a design floor on the planes but they couldn’t speak up, they couldn’t escalate the issues, the leadership didn’t want to hear problems with the plane and they suppressed people’s voices.
So two really distinct examples on a not dissimilar aviation theme of one where you can really learn and do great things and one where lack of speaking up, lack of psychological safety causes the monumental catastrophe. And I think the key for me, and as I see it in companies within the bank and other companies, people want to have psychological safety, people want to have their voices heard, but we need leaders to facilitate that and build the environment so that can happen.
Thierry:
And thank you for those really good examples of SpaceX and Boeing. It is so difficult to get that and I know pretty well the banking industry and for me it was few years ago, impossible mission to get this kind of speak up culture, psychological safety. How long does it take to get that in a very… I’m not speaking of Bank of Santander, not even about all banks, but many banks where there is extremely hierarchical, extremely power driven. And I would say probably one of the industries where it is most difficult to reach psychological safety, any magic solution? Is it just a question of time?
Daniel Strode:
It’s a question of time, but there are some very tactical things you can do straight away. So one of the ones I love doing is reassigning the seating plan at board meetings or different meetings because it’s often whoever sits next to the chairperson, is the trusted sidekick and ally and has a strong voice in the meeting. So try to move around the seats. Also try to have the most junior person speak first in a meeting. That’s a very important tactic that you can do tomorrow. Everybody listening can go away and do that. When you have the most junior person speak first, their voice is heard. Whereas what you typically see, especially in hierarchical cultures is you see the most senior person speak first and everyone say yes. And that of course suppresses innovation. So it’s very difficult of course to do this change on a big scale, but there’s some of the small things you can do as a leader within your team straight away.
Thierry:
A lot of tactical practices and demonstration. Yeah, cool. Yeah, one I’ve experimented is in this kind of feedback future where number one to ask for feedback and to share the feedback and to say this is the kind of behavior I want to change is chairman the CEO and then asking each member of the executive committee to do the same with their people where they show their vulnerability. And we use a lot the Patrick [inaudible 00:20:53] framework where the foundation of very effective leadership team, a high performing leadership team is all about trust based on vulnerability. And this is so true and it’s part of what you said, this culture where you can speak up and psychological safety. So another question, what recommendation do you have for leader going through the culture transformation process? Since we are talking about them, about those top.
Daniel Strode:
Actually probably this is my top advice when it comes to culture in general. It’s the one question everyone asks me because they’re struggling with, and I would say leaders, you must participate in culture, you cannot outsource it. So it is your responsibility. You do have to live the behaviors and the culture that you want every single day because people are watching you and they’re watching what you don’t do. So when you outsource the responsibility of culture to human resources or someone else in the organization, a chief operating officer, it proves not only do you not value and understand the culture, but your transformation will absolutely fail. So I think that’s my top advice. Leaders must participate and live the culture, walk the talk day in, day out. But Terry honestly, probably you know more on this than I do. What do you think?
Thierry:
I don’t know if I know more, but I would fully support what you just said. At Axialent we have a motto, a little bit provocative motto, but you will have to excuse my French. And this model is no bullshit culture. And when some people asking me what are you talking about when you talk about BS culture, BS for bullshit, not for Bank of Santander, sorry for that. And I always say it’s all about the fact that if the chairman, the CEO is not the leader of the culture transformation, just forget it. If the executive committee does not dedicate most of its time in culture transformation, which looks like very provocative but it is not, and consider that being a culture role model is an extra job, something in addition of their job, then forget it. Just forget it and stay silent, just don’t say anything because culture is something where the top leaders will have a kind of comment from their people, which is, you know what? Show me the culture you want, don’t tell me, please just don’t tell me.
And what you do speaks so loudly about you and the culture that I can’t hear what you are saying. And this is so true to the point, and this is why I like what you said. When you say it’s how you do when nobody’s listening to you, seeing you, it’s because you have to be the culture as a Mahatma Gandhi said, be the change you want to see in the world. He didn’t say behave or do the change, just be it. And it’s exactly the same. What does that mean? It means for both the chairman, the leader, the CEO and the executive committee, you have to change yourself. You really need to transform yourself. You will remain the same person obviously, but you will improve, you will know yourself much better, you will listen much better from the feedback you’re going to get and you’re going to have to change your mindsets, you’re going to have to change your behaviors and it takes time.
And by takes time, not talking about it takes long time. It takes a lot of dedication for you to do so. And once again, my point is being a culture carrier at the executive committee level is not another job. It’s your job as you said. And once again, the same way, I hate when I hear from CEOs, you know what? Culture is the key enabler of our business strategy. So wrong, so wrong for me. Culture is part of your business strategy. If you work on a business strategy without working on culture, it means that you are working on concepts, on plans without working on execution. Because culture as you say is how we do things around the year.
So how we going to implement without the business strategy? So if you don’t work on the execution, it can be a theory, so it’s not an extra job, it’s just about making it happen, making it happen, your business strategy, your purpose, your vision, your values, your mission, and so on so forth.
So that’s my perception. And to tell the truth, we had the opportunity to say no to some potential clients saying, we don’t think you’re ready for that. Just because they were not ready to invest the time, the dedication and the depth of change it will require for them anyway. So that’s a very strong conviction I have. But let’s go to another question. What kind of additional and final comment you will have about the book? Did you observe some specific choice? Because you don’t think about Bank of Santander, only you talk about a lot of companies experiences and facts and figures and so on. So if you will have to share something specific from this book, what would it be?
Daniel Strode:
Well it is really interesting because I think fundamentally we are all facing the same kind of problems. So that digitalization and the need to innovate and the need to have a strong culture. So it was interesting because I’ve researched companies from… When I say researched, I’ve gone to the companies I’ve been there on campus, I’ve spoken to the chief HR officers, I’ve spoken to the founders, I’ve spoken to the CEOs, I’ve spoken to the people, I’ve been to visit their shops. I’ve gone very deep on this and it was interesting because I’ve gone all the way from Europe to South America to North America to Asia and there are common challenges. Everyone is facing the same problems and the best companies irrespective of industry, because I’ve gone across industry as well, have all got very common solutions culturally to the challenge of innovation. And that’s why I managed to boil the book down to eight principles because they come out very, very strongly time and time again.
The interesting one and the one I want to share with you now is perhaps running towards technology. So embracing technology, I find this one a really fascinating topic because you probably remember when the first ATM came out in the banking industry in the 1960s, everybody said this will take away jobs, this will be causing mass redundancies and chaos. And the opposite actually happened. What the technology did was it made the cost to serve the customer lower, which meant we could spend more time as cashiers and people in the branches helping customers with complex queries. And since the ATM came out, branches increased 57% globally, population only 21%. So ATMs didn’t destroy the planet, didn’t destroy the jobs, the same as the internet. We all know that happened with the internet as well. [inaudible 00:28:26] McKinsey did a study of web 1.0 and they found for every job it destroyed, 2.6 were created and GDP increased globally 10%.
So the key is here, when you think about technology, are you digitalizing your value? And that’s my question to companies and that’s what I see innovative world class companies doing every day. They’re partnering with technology, they’re understanding that a transformation is not just throw technology and you become digital and you’ve changed your business. They understand that you have to partner with it, which means you have the technology and then you have the culture that supports it. So you have the career paths, you have the job descriptions, you have people in new profiles, you’re actively using the technology together, you’re trying to enhance the customer experience, so on so forth. And it’s the culture and how you use the technology rather than being scared of it or just throwing it a problem and saying we’re going to solve. So I’ve noticed the most innovative companies doing that.
And there’s one great example of a company in China called [inaudible 00:29:33] and they digitalized their value in a wonderful way. It’s a cosmetics company. And COVID hit them hard, they lost 98% of their revenue overnight because they were just in stores in China. And of course China had the most severe lockdown of anywhere in the world and their stores were closed overnight, they lost 98% of revenue and their chairman and chief executive said, what the heck can we do? And they said, we’re going to embrace technology. So they turned their shops assistance into online sales people and they decided to hold two our, I don’t know how to say it, sales [inaudible 00:30:15], two our meetings online where they would sell the products, they would show the consumers how to use the makeup, how to apply the cosmetics, how to remove it, what to use in this and that, and really go in depth in the product.
And they became online influencers and ambassadors. And what they actually did was so successful that they managed to sell more units in that two hour period than four of their stores did in an entire month. So they really changed the game. They were using the Chinese equivalent of WhatsApp to do this and Instagram to do the live streams and the sales and they digitalized their value and of course that was them being pushed into technology because of COVID but same as the banks or same as the internet, you can sometimes pull the technology to help you as well. So really embrace technology I would say.
Thierry:
Great, thank you. And you remember as usual in these kind of webinars I prepared some questions for you because just in case we will not have the first question quickly, but I have already two, so I will not ask you the question we prepared, you and I, sorry for that. I have a question from [inaudible 00:31:25], from McGill, which is, what is your view on different subcultures? How do you cater for local differences and still be Santander Worldwide? And by the way, I think I can describe that because it’s official, your next CEO will not be Spanish, would be Mexican?
Daniel Strode:
Absolutely. So the best thing about working in the bank is definitely that we are diverse with 200,000 people from so many different places, so many different countries. And that’s really good. You have me being a Brit abroad as they say, a British person living in Spain and that’s fantastic and it’s nice that, that’s truly embraced. And it’s true, what you do need is you need a global vision, a global aim, a global culture in the sense of, this is where we are going as a team and you can respect the local cultures at the same time. So what you never want to do is you’d never want to suppress people’s voice because you notice they speak up in a different way.
And of course let me talk of my reflection because British people, we make a plan of a plan and Spanish people, they fix it tomorrow, manana and tomorrow never comes. And British people, I don’t know if we start anything because we’re so busy planning. So there’s a funny anecdote of two different types of culture. Of course we are both Santander and there we’re both working in the same direction, but we bring our own flavor to the table I would say.
Thierry:
Yeah, and I have the experience for the past 30 years, that obviously there are national subcultures in any global organization, but the point is that an organizational culture is the bridge across those national cultures and it does transcend the national cultures. And this is what I lived in my former company, Hewitt Associates, which were really a global firm, but in many clients’ situation too. The other point is, based on different business units or over time, we are talking about, I want to have an innovation culture or [inaudible 00:33:33] culture or customer-centric culture or operational excellence kind of culture or one team globally in the matrix organization culture or people oriented culture, all those archetypes of what we call culture applications, but not the foundational culture.
And those subcultures can live together always if you have the foundation and the culture is not about necessarily those kind of business strategies, it’s about the kind of mindsets. We talk a lot about being player versus victim, being learner versus not, kind of culture, which are the foundation of something that you will use for being customer centric or applying it to innovation, agility, operational excellence and so on and so forth.
So my perception to complement what you said is, you can accept and need subcultures always as if you continue to bridge them with a foundational culture that does transcend those differences. I have a second question from Norma Ramirez Is there… I love this question. Is there any chance to change the culture from HR area and push to the CEO to change? Any suggestion to get that? That’s a tricky one.
Daniel Strode:
Well Terry, I’m going to ask you how do you manage that with the client? So be ready, but I’ll give it a step first. So I think yes absolutely you can push the CEO to change, but you will need the CEO then to be receptive. And I think HR teams have been doing this for some time. We’ve been coming, saying this is important, here’s some results, this is why it looks good, this is what we need to do, it improves the brand, it makes us positioned better in the market and so on and so forth.
And I would say it’s one of the most difficult things about doing this transformation, which is measuring culture is not easy and most companies can do it through employee surveys. Many have very good partners helping them with in depth questions and knowing what the drivers are and so on. But it’s always been tricky to link it to business performance. And only in the last few years we’ve started to see those correlations be proven by some of the consulting partners who’ve done work on this. So that’s some good news and you can start to convince the CEO, let’s go down this path, let’s change. But I think we’ve touched upon it before, which is, if the CEO doesn’t agree or align to it, then it’s going to be awfully difficult, near impossible. But Terry, you I’m sure have experience of this.
Thierry:
Okay, thank you. Actually Norma, thank you for asking this question. As Daniel said, it’s not an easy one, but the response is definitely yes. And how? Following what Daniel said, I think HR can do a couple of things. First to send a kind of awareness call to the CEO and his or her executive committee by measuring, what is the current culture and what could be the design culture just to make the executive committee and the CEO aware, but what the culture is really within the company. Because I cannot tell you that every time we measure the current culture at the executive level and then at the second level, third level and the lowest level of the organization, it’s a shock. It’s a shock because there are different perceptions and what we use to measure that is with our friends of Huma Synergetics it’s the OCI, the organizational culture inventory, which is from our perspective the best one.
And we love it because we can also link into a leadership assessment, which is the lifestyle adventure of the other side, which can help you make the connection between A, what are the current material we have and what are the leadership types we have. But the point is, when you just share that with your CEO and with the executive committee, then say, “Wow, Houston, we’ve got a problem. We need to wake up and there is something we must do.” So that could be a very first step. And then it’s by maybe asking the CEO and each leader of any region or business around the world, business unit, say, okay, just could you please work on what would be the business and people case for change. So what do you want to achieve as a business? What do you think are the challenges? What will be the enablers and the blockers, the barriers to what you want to achieve?
And very quickly they will talk about culture, they will maybe not name the culture, but everything they’re going to say is about share. How do we think? We work or act and how do we interact to make that happen? And then we tell you, this will be the enablers that we would love to have and we don’t have. Those are the barriers, the brokers that we have and that we need to remove and so on and so forth. So maybe those solutions Daniel shared and those solutions measure what you need to change and what you change and make your leadership team aware about where you are and where you want to be or what they want to be and just make them work on the business and people case for change. It’s the awareness you were mentioning Daniel.
Daniel Strode:
Yeah, I’m very…
Thierry:
Yeah, please go ahead. I’m looking for the following questions.
Daniel Strode:
Yeah, just to say I’m very aligned with what you said and I think we need to chip away at the CEOs and convince the people, this is part of our job in human resources. Now we are living in a more data driven function, hopefully that can help us as well.
Thierry:
Good. I have a question from Patrice [inaudible 00:39:30] I haven’t seen you for years my friend, I know that you are in the US now. The question is, how and who should define the targeted culture, the design culture, let’s say. Very good question. I have some kind of answers for that.
Daniel Strode:
So I’ll give it a shot and then I’ll pass you Terry, because if Patrice is your friend, I’m sure that he’ll like to hear from you. So I think in my perspective on this, I have a very clear opinion on this. So companies have four stakeholder groups typically. So you have your people, your employees that are in the company, you have your customers, you have your shareholders or stakeholders, so the interested financial parties and the communities that you serve or operate in as a company. And I like to think of those four stakeholder groups as a virtuous circle. So as to say, if you improve one of those areas, you improve all of them. So if you have more profit, you can invest more into your communities. If you have happier communities, maybe they’re going to become customers and so on and so forth.
So those four stakeholder groups are intrinsically linked to one another and they’re the foundation of the success of your business. And to that end, when you do your cultural transformation and design your culture, all of them should be involved. Of course the employees often have the loudest and the outsized voice and that’s fine because they probably make up the majority of what happens day to day in the company. When I think about employees, it’s not only the senior executives, not only the leaders or the managers, but it’s the team as well. And that’s very important. So cover all of it. And typically I like to ask three questions. I like to ask them, what does it feel like today in the company? So that’s the first question, What does it feel like today in the company? The second question is what do you want it to feel like in the company?
So how do you see the future? What do you want that to be like? And the third question is, therefore how do we get there? What are the things that we need to change? How do we go on that journey? What do we need to do? So what does it feel like today? What do you want it to feel like? And then how do we get there? And typically when you ask those three questions, and you can do that either in an online survey, in a face-to-face meeting, in a round table discussion, in a town hall anyway, and all of the ways, preferably, you’ll start to get some very, very rich data on what’s working, what’s not working. And that ultimately leads you to where you need to focus your culture on. So that’s my approach. And Terry, what would you consider?
Thierry:
Oh, very much in line with you, but I’m learning something here. When you talk about all the stakeholders, I am a marketing guy by background. And my passion is to see how when we transform culture, at the end of the day, the end of the day for me, the last judge is the customer, the end customer who is capable to say, I love this company because of their culture, because they do this and this is the way they think, this is the way they act, this is the way they interact with us. This is the kind of experience I have with them. And this is… I don’t know if you get got there at bank of Santander, but it’s probably one of the… It’s a never ended story, obviously the culture transformation, but it’s one of the milestone to take the customer as early stage insights from them.
I love it. To say the truth, I never had a client who did it, never. But I’m going to try to change that. So I love it. But to the question to Patrice, how and who should define the targeted cultures, what I used to say when we use for example, the quantitative analysis from humans about organizational culture inventory, we do that with all employees just to show that hey guys, the perception of what is the reward and current culture might be different from country to country, from business unit to business unit, from function to function and from level of the organization. And that’s very important to know, that we might have those different perceptions, meaning that sometimes we don’t have any culture, by the way. When we talk about what should be the design culture, so in addition of integrating all the stakeholders you mentioned, we are used to say this is what we do with the top leaders.
It might be the executive committee, the extended leadership team or the extended, extended leadership team with the direct reports of each EXCOM of each country or business unit, but not asking to employees. But the truth is, the truth is different. The truth is, when we do what you said, town halls, focus groups, et cetera, the qualitative analysis of what the current culture is, we always ask, okay, so first we ask some questions about how do you perceive the current culture? It’s three or four attributes, what is its impact on you? What do you think is an impact on your team and the organization? And so on. But then we say, okay, let’s imagine that I have a magic wand and that I can change three things from the current culture. What would you like to happen? What would you like this magic wand to change?
And then we talk about the design culture and then the question is, because this is the most important thing when we do measure things, we don’t only measure what is the design culture, what is the current culture, but since we are transforming this culture, what is the impact it has on people, on the business and on me? And it’s part of the change management process. So we always ask the question and how does it impact you? How does it impact you working with others? And how do you think it impacts your effectiveness at work in terms of results? So this is what we do. I have a message. So there were some more questions. Okay, yes, it’s five minutes left said, and there’s another question is, so we covered how to ensure transformation. Could we share a bit about why these changes need to happen?
Daniel Strode:
I think from my perspective and sounding like a broken record, 75% of the top companies in the world will not be here in five years time. That’s why we need to change. But to put it into a bit of perspective, you all know the case studies because they’re very famous business case studies of Blockbuster, Kodak and Nokia, and you can learn from each one of them. Blockbuster thought that what they did today would make them successful in the future as well. So they didn’t change, they continued having physical stores, renting out videos to people. And then Netflix obviously came along and ate their lunch. Kodak was more or less the same. They were scared of technology, they didn’t embrace technology, which is one of the points I mentioned earlier. They actually invented the first digital camera and they didn’t want to release it because they were scared that it might cannibalize and hurt their business.
And then Nokia, they fell into… Well they had many problems, but they were the dominant phone leader of the world and they had the fallacy cost, the sunk fallacy cost that they’d invested loads of money into new products, they’d spent more money on research and development than Apple and Samsung combined. And they still didn’t get the outcomes they wanted because they couldn’t see that the world was changing. So the key for me is you need to change and you need to be alert to this. And many of us don’t have that mental state of being alert to what’s happening because we like to think that we’re all geniuses. We like to think that our good business performance is because we are fantastic people. We are operating the company in a great way. And actually we’ve probably had a slice of luck along the way and we should be more humble and reflect that what got us this far may not get us that far in the future. So being aware of that is the first step.
Thierry:
Yeah, I have the expert. why do we need to change culture? Because once again, it’s the way we think, the way we do things, the way we act and interact with people and the way we did, unfortunately, I’m 62 years old and everything that made me successful in the past doesn’t work anymore. And I have the experience of, for example, being asked to be the coach of a very famous guy, experienced worldwide in innovation. And the guy say, “Could you please coach me on this specific issue of innovation?” I said, “Are you kidding? I don’t know anything compared to you about innovation.” He said, “Yeah, let me explain you. I wrote books about that and my books were about how to innovate in a way that when we get the decide the go or no go for this new innovation, might be a process or product or whatever.
All my processes, all my methodologies and so forth, were based on, we will mitigate the risk, the minimum possible. So we will have studied, analyzed everything. So then we could say, ‘go on a go’ with the minimum risk.” I say, “Yeah, it makes sense.” And he said, “No, it doesn’t make sense anymore. If you do that, you’re dead today. And that’s why I need to renew completely my mindset and my way of doing things.” Because today it’s exactly the opposite. With the kind of design thinking approach, it’s how can I make as many mistakes as possible that are very low cost, a whole lot of learnings, minimum impact on my effectiveness and that will make me very quickly find the right solution, satisfying the customers and so on so forth.
And he say, “I just can’t do that. I mean, I can’t imagine me accepting mistakes. I can’t imagine me not fearing to feel incompetent by not finding the right solution immediately. I am a kind of protectionist kind of guy and all of this is playing against me today, so I need to transfer myself.” So that’s why I think culture is the same for everybody, not only for this person, no?
Daniel Strode:
You were lucky to find someone so willing to change Terry.
Thierry:
Yeah, the guy I have to say, is really, really unbelievable because he did it. So humble and actually humility is part of this. So I think we are getting to the end. So thank you so much Daniel, thank you so much the audience for all those questions. So I could not ask the two questions I had prepared before, but your questions were much better. So we will send you all the recording of this webinar by next week and even more we going to do if you want to use them in the future and share it with some of your people in your companies, short clips, videos of the best moment, what we think is the best moment of this webinar.
I think Daniel offered also to share with you one of the great chapter of his book. So thank you Daniel. And once again, please everyone, when you’re going to receive all those images, do not hesitate to share any comment, any question, and we will be pleased to respond to your question. With that, Daniel, I will let you have the last word, but I wish you all a very lovely day. Daniel.
Daniel Strode:
Well, thank you so much Terry for being a wonderful host and thank you to everyone for attending and honestly sharing better questions than we had prepared and thought about ourselves. So thank you so much. Have a good day.
Thierry:
Thank you. Bye.
