Leaders can shift company culture, but it’s not easy. 3M’s experience with Six Sigma shows a path.
Business sustainability often requires changing a company’s culture. Culture is the taken-for-granted beliefs that create a common understanding about how the company works, what it stands for, and the fundamental goals it pursues. For example, which stakeholders are important? Which metrics show success?
In the sustainability context, a leader might ask a company rooted in the fossil fuel industry to expand to renewable energy. That can work against a company culture that includes pride in its history and ties to the land.
Or perhaps, as a leader, you want your company to engage with different stakeholders. At many companies, the culture has focused on responding primarily to customers and shareholders. Prioritizing new groups, such as community members or non-profits, can be a big shift.
Cultural beliefs are deeply held and emotional, and challenging them can trigger an intense response. They can be changed, report a team of researchers who studied an effort to change company culture. But it’s not an easy process.
Davide Ravasi (University College London), Anna Canato (European Investment Bank) and Nelson Phillips (Imperial College London) studied the introduction of a new management system at international conglomerate 3M.
While the change at 3M wasn’t focused on sustainability specifically, its outcome is relevant to any leader looking to undertake change.
The researchers found that change is difficult, necessary, and possible. Leaders may have to drive it top down, but they can smooth the process by getting personally involved, working with supportive subcultures, and recognizing people’s emotional needs.
3M’s story: A new management system clashes with the culture
At 3M, the culture traditionally revolved around collaboration, individual initiative, tolerance for mistakes and the absence of pressure for short-term results. These cultural traits created an environment of entrepreneurialism and original thought — factors crucial to 3M’s success.
In 2001, low profits prompted a change in senior leadership. 3M brought in Jim McNerney, a former vice president of General Electric (GE), as its new CEO. McNerney brought Six Sigma, a workplace methodology popularized by Jack Welch, McNerney’s former boss at GE.
Six Sigma is a process management methodology designed to enhance efficiency. In McNerney’s first three years (2001-2003), he introduced Six Sigma to the entire organization.
Six Sigma temporarily improved 3M’s performance. Stronger emphasis on productivity and large cost savings improved financial results, and the share price almost doubled between 2001 and 2004.
Employees resisted change
At the same time, Six Sigma clashed with 3M’s existing culture of serendipitous discovery and tolerance for mistakes. 3M had promoted mistakes as a method of discovery and learning. But under Six Sigma, mistakes had to be recorded and were viewed as threats to productivity.
By 2005, Six Sigma’s financial outcomes also seemed less promising, with stagnant revenues and lower new product sales. Six Sigma seemed to be harming growth and innovation, which employees saw as the ultimate goals of the organization.
Employees were frustrated. They complained — vocally — that metrics seemed to matter more than performance. Many believed Six Sigma was getting in the way of real invention.
A new leader relaxed Six Sigma’s implementation
When McNerney unexpectedly left his position at 3M in 2005, new hire George Buckley stepped in and had to handle the cultural tensions.
Buckley kept Six Sigma practices, but dismantled some of the strict, formal obligations, including the emphasis on extreme precision. Essentially, he dropped elements employees considered less useful or that interfered with 3M operations.
Employees supported this hybrid approach. “We need to identify where Six Sigma works best and then increase the intensity,” a 3M executive told the researchers. “But where Six Sigma might not be the best approach, we need to find a better one.”
Six Sigma and 3M’s culture shifted together
It might seem that 3M’s culture beat back Six Sigma. But in fact, 3M’s culture and Six Sigma evolved together. 3M dropped many of the Six Sigma rules and procedures. But some of the ideas and language remained.
“People had actively practiced this, so they kept some of the content in their toolbox and occasionally drew on it,” explained researcher Ravasi. For example, Six Sigma made 3M employees’ language more uniform, aiding facilitation and innovation. By 2008, employees also had greater concern for risk management, performance measurement, accountability, and control. Some employees described these emphases as the “legacy of Six Sigma.”
Change is difficult, necessary, and possible
3M’s experience shows both the difficulty and the possibility of culture change, say the researchers. “People in an organization may be quite willing to consider new practices,” explained Ravasi, “but not if they threaten the fundamental values that shape their understanding of their workplace reality.”
At the same time, as we all know, change is necessary. Change exposes employees to new values and approaches. In a turbulent world, companies need to adapt.
Change is also possible: Six Sigma’s introduction at 3M had lasting impacts.
Leaders can drive culture change — top down
Organizational change recommendations often emphasize employee participation and buy in. But top-down efforts, like those at 3M, may sometimes be necessary. Top-down efforts can get people to try out a behavior they would otherwise resist.
“It is only when forced to behave in different ways that people realise the actual implications of these changes,” Ravasi explained. “Behaviour that they would have otherwise rejected as unacceptable is eventually embraced enduringly, even after coercion lifts.”
Four ways to make culture change easier
Here are four ways that leaders can smooth the change process, especially with sustainability issues.
Get personally involved. At 3M, CEO McNerney’s enthusiasm for Six Sigma and personal involvement boosted acceptance. His involvement was “energizing,” a marketing manager told the researchers; it made it clear that Six Sigma “was not something to forget in a couple of months, but it was central to his way of running 3M.”
Work with supportive subcultures. At 3M, support for Six Sigma varied depending on team structure and team subculture. Engineers and manufacturers at the company demonstrated the most acceptance for the process, as they were already accustomed to assurance processes and data analysis.
Leaders can involve supportive subgroups to give a new approach a toehold in the system. If you’re shifting an organization toward sustainability, supportive subcultures might be more outward-facing departments, or perhaps individuals throughout the organization, drawn together in a ‘green team.’
Ground a vision for change in core values. 3M leader McNerney tried to do this, connecting Six Sigma’s expected efficiency gains to 3M’s traditional concern for growth. But the fit was an uncomfortable one: once it became clear that Six Sigma was damaging research and new product development, support quickly fell.
Sustainability efforts can make natural links between new and old values. For example, if a fossil fuel company pivots to renewables, it’s still playing an essential societal role of providing power.
Offer a new and attractive self-image. Culture is closely tied to identity. Beliefs aren’t just rational abstractions; they’re very personal. At 3M, employees were deeply invested in an identity as innovative risk-takers; Six Sigma’s emphasis on standardization and control contradicted this powerful self-image.
When you shift an organization, help people see themselves in a new and positive light. You might bring in respected leaders who can provide models and norms. Branding and other messaging can also be useful tools.
Ultimate, being a leader is about balancing push and pull: providing direction and encouragement as you bring your company and your employees into the future.
About the Research
The researchers studied 3M between 2005 and 2008. They spent time at the organization (both a subsidiary and headquarters), reviewed internal and external documents, and conducted 75 interviews with employees across the organization, including senior managers and those responsible for Six Sigma training and methodologies. They published their research in 2013, but have provided a 2020 update.
Read the paper: Canato, A., Ravasi, D., and Phillips, N. 2013. “Coerced practice implementation in cases of low cultural fit: Cultural change and practice adaptation during the implementation of Six Sigma at 3M.” Academy of Management Journal. 56.6: 1724-1753.
More about culture change: NBS’s project, Embedding Sustainability in Organizational Culture, led by Stephanie Bertels, dives into practices shaping sustainability in organizational culture.