We have all heard that culture eats strategy for breakfast (Peter Drucker). What we may not have heard is that the same holds true when it comes to compliance tools and measures.
Organizational culture also determines which tools and measures will work and which ones won’t. In fact, without the right culture you will never be able to benefit from the tools you need most to meet all your obligations and keep all your promises.
Let’s take a closer look.
In a study published by The International Association of Oil and Gas Producers (OGP) in 2010 an evaluation was conducted of 53 Health, Safety, and Environmental (HSE) tools against organizational culture. In this study HSE tools range from processes (i.e. measures) to commercial products across the following 15 categories:
Reporting and Recording
Incident Investigation and Analysis
Human Factors In Design
Work Practices and Procedures
HSE Risk Management
HSE Management Systems
HSE Training and Competence
Questionnaires and Surveys
Observation / Intervention
Organizational culture was assessed using these classifications:
Pathological - Who cares as long as we’re not caught
Reactive - Safety is important; we do it along every time we have an accident
Calculative - We have systems in place to manage hazards
Proactive - Safety leadership and values drive continuous improvement
Generative - HSE is how we do business around here
Each tool was judged as appropriate for the level of organizational culture when it meets these criteria:
It is likely to be accepted and actively used;
Its use serves a required purpose; and
It should improve HSE performance.
An excerpt from the study is shown below (see link at the end of this post to download the full study):
According to the study, a tool no matter how good it is will not provide the intended improvement unless an organization is ready for it.
As a result, this study shows that the majority of HSE tools needed for an effective HSE program will not be helpful without higher levels of cultural maturity. For example, risk management tools will not be effective unless a culture is proactive.
Another insight can be inferred from the study by considering organizational coupling. When this is considered we noticed that many HSE tools require higher levels of integration to be effective. For example, Management of Change (MoC) processes require engagement across multiple areas of responsibility to effectively contend with risk due to planned changes. In other words, MoC is not effective as a stand alone tool conducted by one person – an example of low coupling.
The following chart combines these two insights:
What Does This All Mean?
The majority of tools needed by a compliance program cannot be used without sufficient pro-activity and organizational coupling.
This is a big deal for organizations trying to improve HSE performance that are mostly reactive and operate in functional siloes. They will face an up hill battle which will be the case for many, perhaps the majority, of organizations.
What do you do when your organization is not ready to benefit from tools that you need to achieve program performance goals and advance outcomes?
Let's consider three options:
Big Bang Transformation
1. No Transformation
This option recognizes that the organization is not ready to take advantage of the majority of tools needed by a program. It accepts the culture that exists and uses it as a place to start. Understanding that it will not be enough to meet performance objectives or advance program outcomes.
The outcome of this approach is a partial, and most likely not operational, program managed by a few resources working independently, mostly reactive, and focused on reporting. Engagement with internal stakeholders will be limited to collecting data needed to feed basic tools of the program.
Taking the program to the next level will require organizational transformation. However, many that start here never transition to the next level – their culture prevents them from doing so.
2. Big Bang Transformation
This option recognizes that becoming more proactive and integrative is necessary and fundamentally a change management problem requiring strong leadership and stakeholder support.
Change management will among other things introduce proactive behaviours along side of greater levels of stakeholder engagement needed to drive organizational coupling. This if successful should enable a larger set of program tools (perhaps 3 times) to better meet program objectives and realize benefits.
Transforming culture and implementing new technology all at once is a high-stakes, high-risk endeavour. Sustaining focus and effort across multiple years is possible but very organizations have the patience. It usually takes new leadership or a serious incident for those organizations to change.
Organizations, that do not sustain their efforts using this approach will end up with partial and non-operational programs and often end up starting over.
3. Progressive Transformation
The previous option is similar to a "waterfall" approach where benefits are realized only at the very end. This approach makes sense when:
The organization has had prior success with this kind of transformation in the past,
A high degree of certainty exists with what and how things need to be done,
All program capabilities (behaviours, skills, tools, capacity, etc.) need to be present to realize the majority of the benefits.
However, when these conditions do not exist the organization will need to learn new behaviours as they implement technology. This requires a change management approach of a different kind.
An approach designed to do this is, "Lean Startup." This methodology uses a BUILD-MEASURE-LEARN cycle to achieve greater levels of program capabilities.This is different than phased implementations or continuous improvement strategies.
Not all behaviours and not all parts of the organization need to be integrated at the onset or all at once. Instead, what is needed is for every version of the program (minimal viable program) to have essential behaviours and properties operational for a targeted level of effectiveness (measure of progress).
Lean Startup takes advantage of this and provides organizations the opportunity to learn new behaviours over time while improving program performance and effectiveness at every stage of system development.
Lean Startup aligns change management with implementation to produce intermediate / instrumental transformations in culture, coupling, and program effectiveness.
This approach is still high-stakes but a lower-risk endeavour.
If and when priorities change, organizations are left with a program that is operational but may not be fully effective.
This is better than nothing, or a partial inoperable system, or having to start over in the future. As benefits are realized at every iteration rather than at the end they can help fund further program development. In essence, every iteration of the program generates a return on investment (ROI).
Many organizations invest significant amounts in tools and technologies to support compliance programs. These have the potential to improve program performance and outcomes but only when reinforced by particular levels of organizational maturity specifically associated with culture and coupling.
When organizations are not ready for the tools they need organizational transformation must occur which is a risky endeavour. However, this is not as risky as implementing tools that will never realize the intended benefits.
Effective change management is critical to address the people-side of change. This can be improved further by implementing technology in ways that reinforce learning of new behaviours and integrative practices.
1. "A guide to selecting appropriate tools to improve HSE Culture (2010)", OGP: