Episode 229: Gaurav Bhatnagar on how to lead a cultural transformation
February 17, 2020
Our guest today is McKinsey alum Gaurav Bhatnagar.
Gaurav is the Founding Partner of Co-Creation Partners, where he leads cultural transformations for his clients. In this episode, Gaurav explains to me what a cultural transformation is, what you actually look at during a cultural diagnostic, and what sort of tools his firm uses to drive change in an organization’s culture.
To learn more about his firm, visit http://www.cocreationpartners.com/
Guarav Bhatnagar: The employees themselves have come up with over 400 ideas to improve performance, not because their bosses are ordering them to, but because they got engaged much deeper and they took ownership of their site and they figured out what needed to happen so that the organization could perform at a much higher level.
Will Bachman: Hey, welcome to Unleashed, the show that explores how to thrive as an independent professional. I’m your host Will Bachman. Unleashed is produced by Umbrex, the first global community connecting top tier independent management consultants with one another.
We just heard from today’s guest, McKinsey alum, Guarav Bhatnagar. Guarav is the founding partner of Co-Creation Partners where he leads cultural transformations for his clients.
In this episode, Guarav explains to me what a cultural transformation is, what you actually look at during a cultural diagnostic, and the tools his firm uses to drive change in an organization’s culture. To learn more about Guarav’s firm, visit cocreationpartners.com, that’s one word. And the link is in the show notes.
Hello Guarav. Welcome to the show.
Guarav Bhatnagar: Thank you. I’m really excited about having a conversation with you about my work.
Will Bachman: So Guarav, I’ve always thought when I was at McKinsey and subsequently it always seemed to me that the culture change kind of work was this very spongy concept and hard for me to get a hold of. But you do a lot of this kind of work and you’ve developed some real frameworks around it and some real approaches. Could you talk to me about sort of how you think about doing a diagnostic of a company’s culture? And then walk me through how you think about actually structuring and engagement to transform it.
Guarav Bhatnagar: So just, by the way, I’m not surprised that you had that experience because before I got into this space, I used to think about this stuff as being super touchy feely and not at all having any impact on business performance. So for a lot of my clients, the first time I meet them, they have the same kind of sense. But my experience the way it has been that this work, the culture transformation work is at the essence of truly creating sustained, high-performance. So it’s been a passion of mine for the last 18 years.
And fundamentally, the discipline that you have to go through to do culture transformation is just as much as any other consulting engagement that people would engage in. And as you mentioned, it starts with a diagnostic and the diagnostic fundamentally has two parts to it, the quantitative part and a qualitative part. And the quantitative part of it is trying to assess what is the current culture in the organization, versus what is the desired culture?
And there are one or two methodologies that I often use. One is called the organization culture index, which tries to understand current organization culture on 12 dimensions of culture. Which then plugged together into build three around how passive defensive an organization is, how aggressive defensive an organization is, and how constructive an organization is. And basically that gives me assessment of whether the organization when faced with challenges collapses into being nice to each other and doesn’t really address the big issues that are going on in the organization. Versus when faced with challenges that your organization get into an aggressive mode of finger pointing and doing reactive behaviors which are knee jerk and can have significant longterm impacts and not thought through. Or is it very constructive in terms of really, really addressing the issues without overreacting to anything and neither overdoing it or under doing things.
And it’s a really powerful tool to specify what exactly is the from, and the to, that the organization needs to go in terms of culture. And you get very specific numbers on it. And you get pretty much out the organization very quickly. So that’s one approach.
The other approach is slightly more soft but it leads to much deeper conversations, which is called a value survey. And then what we do is we supplement it with a lot of interviews that we do with organizations where we are trying to understand the why, behind the what of the survey. And then what you’re really trying to go into is what are the mindsets, what’s the current belief system that leaders and employees in the organization have that leads to the behaviors and the culture that currently exists?
And that is really, really critical because if you don’t have that then you can’t really drive performance. And what we do is we take all of that and then we put it into a something we call a mirror section where we are mirroring back the findings of the old form from the survey and from the diagnostic to the organization, where then the organization has to really, really, really think about what are the key priorities they need to work on.
And the way we do it is through a framework which we’ve developed for high performance culture, which was basically looks at culture in three dimensions, the it, of an organization, the we, of an organization, and the I, of an organization. The it, of the organization is basically the purpose, the strategy, the vision as well as the processes of the organization, which if you do not have really, really high effectiveness on, then the organization cannot be high-performing. The interesting thing is that most organizations focus on that and that’s where organizations tend to spend most of their time. What they forget is that the it, is driven by the we, and the I.
And the we, is all about how effective is the trust in the organization, how effective is the communication of the organization? And perhaps most importantly, something that organizations don’t nearly spend enough time on, is the ability of the organization to engage in difficult conversations effectively. And if the we of the organization is not strong than the it, of the organization cannot be strong because you’re not having the conversations needed to drive performance.
And finally the last piece we need to reflect on is the I of the organization, which is what are the level of self awareness of the leader in the organization and how much are the leaders behaving in a place of victim hood, versus a place of mastery? How much are people blaming other people? How much are people saying, “Hey, this is just the way it is.” Versus really, really getting to the point of learning and saying, what can I do about it and what choices can I make to be different?
And the diagnostic provides a comprehensive framework and that allows us to then engage with the organization in terms of the work that we need to do with them. And one of the things we believe is that every engagement is different because of the challenges that come out are going to be different based on the diagnostic.
Will Bachman: Can you talk about some of the, just give us some specific examples of the type of change, the type of from, to, that you encounter.
Guarav Bhatnagar: There are three or four which come out quite often. So let me play around with one or maybe let’s say two. So the one is around silos, right? The from, is that people operate in silos. And quite honestly, even though people say customer is really important, most of the time what happens in silos is the only person that matters is the immediate manager. And within the silo there’s high effectiveness but across silos there isn’t. So how do you go from siloed thinking to collaborative across the organization thinking, becomes one of the big problem tools that that needs to be worked on. Because it’s often the biggest challenges in organizations happen at the point of handover from one department to another or from one function to another. So that’s one of them.
The other one is hierarchy/bureaucracy to a culture of meritocracy. So what often happens inadvertently is that organizations tend to become very, very hierarchical and bureaucratic in their decision making. And what happens therefore is that every decision is waiting for approvals from someone above. And often in organizations instead of things moving quickly across the organization, they have to go up the hierarchy and down the hierarchy which leads to a lot of wasted time and wasted energy. We often describe that as entropy. And how do you move into a meritocracy where decisions are being made right up close to the point where actions need to happen?
And there are all kinds of things in an organization that cue that. Parking spots for the CEO right next to the entrance. People waiting around and not willing to make decisions because someone has been slapped on their wrist for taking a risk and not being encouraged to actually make a mistake and learn from it. So there’s a whole lot of aspects like that. Another one, which is often there is mistrust and mistrust to trust. So then there’s a whole lot of dimensions that you can work on. Innovation can be another one. Lack of innovation to innovation.
Will Bachman: All right. Let’s take one of those and talk to me about how you would actually structure an approach to address it. So maybe that siloed organization. So you encounter this siloed organization. People maybe agree with you. “Yeah, we all know that we’re siloed. Yeah, that’s not a big surprise to us.” But then what do you actually do to kind of break down those silos and to get information to flow and get departments to work more collaboratively?
Guarav Bhatnagar: I mean then again, it’s a multi dimensional approach that is taken, but let’s start with the work that needs to happen at a leadership level first. And then let’s talk about much lower down in the organization because you need to work both those levers.
So at the senior most layer level, there’s typically two or three things that need to happen. So the first thing that happens is often with organizations that are siloed, even though there is supposedly a strategy that is there that everyone says, yeah, yeah, yeah, we have a strategy. When you bring the leadership together, you realize that there is no common alignment on the vision and the mission of the organization. So one of the first things we do with leaders is to get them to do an exercise which is around what is called a future retrospective, where you have to imagine the organization into the future and what would the organization look like, feel like and achieve in order to be successful.
And every individual leader in the organization has to individually write down what their perspective is. And the moment they write down their individual perspective and share it with each other, it becomes pretty obvious that there is quite … That at the highest level there is some agreement, but they’re actually quite dramatic differences across them. So what we then do is get people to pair up and work in groups to now work with each other to break through some of those differences and align on a common aspiration that they can all hang their hat on.
And we typically end exercise with the entire team together coming up with six words to define what is the overall vision and aspiration that they will work with. The next thing we do is we actually work with these leaders on trust because often what happens with siloed organizations is the reason people hold information within their silo is because they don’t trust that the other person is going to work in a common interest, but rather try and project their function or their department as higher.
And what we do at a real level therefore is we actually make these leaders do speed dating on trust. And talk to each other about what is it in the past that has build trust and what is it that has broken trust. And we use that to then create some norms in that leadership team to figure out how do you actually work through the trust issues and the communication issues that exist.
And then the last thing we do is give them skills in difficult conversations. Just one segment. So we work with these people on difficult conversations and give them skills in difficult conversations to learn how can you be honest and respectful at the same time in your conversation with other people. And then we use all of those skills to work on a real problem that needs cross silo collaboration. So that’s what happens at the leadership level.
Lower down in the organization what we do is we create a program which is a multi-day program which is work we do with change agents. Where people from across the organization, irrespective of hierarchy come together in community to go through a very deep journey at an I, we, level and then finally at an it, level, they develop programs and plans of how they’re going to bring the organization together across silos so that they can actually start creating communication, which currently is missing.
And these change agents finally feel they have voice to actually make things happen and really, really start impacting the organization bottom up rather than waiting for someone from the top to give them permission to make things happen.
Will Bachman: Can you talk about some of the other exercises that you use? I love this idea of the future retrospective exercise. When you go through these multi-day programs and this deep journey, could you tell us a little bit more about some of the other types of exercises that you found really work well?
Guarav Bhatnagar: Sure. I think probably the first exercise that we do, which is a really challenging exercise, is, especially with change agents, is when they come into a room, we basically said, allocate four spots in a room. And we say here’s one spot where you go, if you feel super excited about coming to work every day, you can’t just wait to come to work every day. The second spot is “Yes, it’s okay. It’s a good job. It pays good money and it’s better than other organizations.” And the third one is, “Nah, I have to because it is.” And the fourth spot is, “I hate coming to this place, but I have to because I have to survive.” And you actually get people to be placed in those four quadrants. And then they have a dialogue with each other about why is it that they have placed themselves there?
And what is the pain that they’re experiencing and feeling in the organization that makes them be wherever they are. And then we get into a conversation of so why haven’t you done anything about it? And people get super angry and super irritated because they basically want to blame the organization for it. And our push to them is, this is not something which is new and this has been going on for a long time. So either you’re part of the problem or you’re part of the solution.
And we call this the storming energy, which we are creating at the beginning of a workshop, which makes people extremely unsettled, but it is at the core of then getting people to realize how incredibly powerful they can be if they are in a place of choice.
So a lot of the work we do is to go to places where most consultants would hate to go to. And to really generate the uncomfortable issues that people have fitting inside of them and getting them to realize that they have been for a long time been part of the problem. And now we will empower them and make them realize the power they have to make changes happen within that.
Another exercise is an exercise around communication quadrants, which is a modern version of the classic NBTI exercise. Where in a room you get people to understand what communication styles they have versus other communication styles in the organization and how you can completely misinterpret what someone is saying or what you are saying based on your communication style relative to another person’s communication style. And to learn how do you engage effectively across communication styles. Because effective communication is not what you say. Effective communication is what the other person hears. And if you haven’t made the other person hear your point of view, you can have sent out the memo, you can have said something 20 times, you have not effectively communicated.
So there are many, many exercises. Our playbook is probably about 200 exercises that we work with depending on what we need, what are the issue we are dealing with.
Will Bachman: Wow. Look, what sort of exercises would you use around building trust? You mentioned that is often an issue.
Guarav Bhatnagar: Yeah. So one I mentioned is trust speed dating that happens, but fundamentally we have a model for trust. And the model for trust is basically four dimensions of trust, reliability, acceptance, openness and congruence. And what we do is we get people to come into a conversation and what they do is they read descriptions of each of those aspects and then they self rate themselves in terms of reliability. How reliable are you at work? How reliable are you at home? How reliable are you with yourself?
And then you engage in a conversation with other people in the room around those aspects to help understand those deeper on those dimensions. Why is it you’re rating yourself the way you are? And then we challenge them to help to give them a new perspective on those aspects. And then we talk about across those four dimensions, what needs to happen in the organization to shift behavior that they individually are doing, as well as what the organization needs to do to build reliability, to build acceptance and to build openness.
We find that the most difficult one in organizations, which actually is at the core of breakdown in trust, is acceptance. Where you can separate the behavior of a person from the person itself. And often we are a lot of us operate in organizations, in judgment of other people. And so there’s a huge reflection exercise that people go through on that around judgment and how do you shift out of judgment and what are the belief systems that drive our judgment and our cultural context that drives our judgment, which people self discover, and then understand how to break through.
Will Bachman: This sounds like kind of very difficult work. Can you give me some examples of the types of change in the way a organization works that you’ve been able to accomplish.
Guarav Bhatnagar: Sure. So let me give you an example, which is quite public because we’ve been given permission to share this. I’ve been working with DSM for a long time, the chemical manufacturing organization. And we were working with a specific site which is there in Michigan, which was their site in Michigan. And they had initially wanted to do some operational excellence work. And the consultant came in and said, “You guys, here are the 14 opportunities that you have and you’re going to get $14 million out of it and that’s what’s going to happen.”
When I got pulled into this work, we decided to do the culture work rather than try and focus on the operational excellence work first, which was all about shifting the way people engage with opportunities in the organization because most people were into, there’s no opportunity. We are okay. Anything that’s a problem is the organization. There’s nothing wrong with what we do.
By the time we ended, we finished the work, in a period of four years, this organization has unlocked over $300 million of opportunities. And the employees themselves, have come up with over 400 ideas to improve performance. Not because their bosses are ordering them to, but because they got engaged much deeper and they took ownership of their site and they figured out what needed to happen so that the organization could perform at a much higher level. And there they don’t have a formal operational excellence team. There’s one guy who’s responsible for operational excellence and the employees run everything on their own.
Will Bachman: And what did you do to help make that happen?
Guarav Bhatnagar: So it’s basically the same thing, right? We took the leadership team on a journey or of the I, we, and it, where they were reflecting on how are they showing up, which is not supporting the organization’s performance. And getting them to a place of role modeling and not to a place of where they are coming up with all the ideas. But the role of the leadership needed to play was that of what we call servant leadership, which is leading from behind and giving permission and enabling the employees to lead the work.
And then we went through a series of change agent workshops where we created a group of a 100 change agents in a site of about 800 people where these 100 change agents basically took, went through the same I, we, journey on their own and the it, piece started generating the idea. And they realized that the leader of the organization were not there to find fault in their ideas, but were there to support them in implementing the ideas and running with it.
So we basically turned the whole work on it’s head and rather than starting with what strategy we are going to come up with, we started with what is it that we need to do differently as human beings, how do we engage differently with each other as human beings and therefore now, what is it that we are going to create for the site?
Interesting story is that I was one day flying out of Detroit to go back home and I ran into one of the change agents who was actually a 64 year old guy who was a really crabby guy prior to the engagement. And he was there with his wife. And he just mentioned to his wife that, I was a guy who had been working with them. And the wife came up to me and said, “Thank you so much, you’ve changed my husband and he’s so much better human being at home. And I hear that he’s doing brilliant things at work as well.”
Will Bachman: Wow.
Guarav Bhatnagar: The fundamental core value of our work organizations don’t transform. Individuals do. And when a critical mass of individuals transform, the organization transforms by itself. So for us, transformation is not an organizational thing. It’s an individual thing.
Will Bachman: How do you sustain these kinds of changes? So I’ve been to some workshops or some weekends or some training sessions and you come out of it, you’re all pumped up and you’re like, “Okay, yeah, I’m personally going to be different.” Or even New Year’s resolution or “I’m going to exercise every day.” And you’re fired up and you do the first day. But then a week later, a month later, you kind of reverted back to normal. How do you, when you’re doing this kind of work, get an organization and the individuals to actually sustain those new behaviors?
Guarav Bhatnagar: Sure. So there’s multiple factors to that. So one is in the workshop. So the reason why we start with the I dimension work is because most of the time when people go to workshops like this, the focus is on behavior. And when you work on that behavior level, what happens is that the transformation is not sustained because people are just saying, I used to behave like this now and I need to behave like that. The place where we work is at the level of beliefs because it’s our beliefs that make us behave in a certain way. So the fundamental work in the workshop is helping people shift their beliefs. And in developing discipline and giving people discipline practice that they need to do so that they can work on their belief level, not just at the behavior level. So that’s what happens in the workshop. That you go in much deeper rather than working superficially at a behavior level, which is what most other programs do.
The second thing is that the program the way it’s designed is it’s called a field and forums approach where you’re having three touch points in a forum, but you’re getting people to do fieldwork in between the forums. So it’s not that everything happens in one go and then as you said, you go to a weekend, you come back for one week, you want to do it and then you go away and then it all just disappears.
What we are doing is we are having three separate engagements with people over a period of four months and we are staying connected with them between the sessions so that we are making sure that whatever commitments they made in the workshop, they’re adhering to. Because the only way you make it stick is through practice.
And what we’d also make people do is buddy up with other people and they coach each other regularly and we create discipline in their diaries so that they’re meeting up to coach each other and constantly work with each other to ensure that they’re doing the work they need to do. And what you’re doing is you’re doing double loop learning so that people are actually not just having one exposure to it, but every time they come back into the workshop, once they practice and learn and struggle with things, now we’re reinforcing the work with them.
And then finally what we do is we bring it all together in a real business project. So people are made to sign up to work to shift something in the business which they are made responsible for. And they are committing to the senior leadership of the organization for to turn it around and actually demonstrate improvement.
And what you do is when they succeed with that, you celebrate it like crazy because one of the key things to change in system shifts is you want to celebrate like crazy whatever people are doing because celebration is what creates momentum. So what we create in the system is a lot of celebration as a way of building momentum so people stick with it. Versus you will go into a workshop doing something on your own, trying it. No one seeing you do it. There’s no recognition going on. There is no loops, so that there’s feedback going on for you. There’s no way of you going through discipline practice.
So we’re building all of that in between the workshops. In fact, one of the things we say is that the real work is actually what happens outside the workshop. The workshop is just the start of all the work.
Will Bachman: Amazing. Guarav, I know, just kind of switching gears, I know that you have been involved with kind of a weekend retreat for executives, kind of this sort of thinking about the next 10 years. Could you talk about that a little bit?
Guarav Bhatnagar: So the work with the executives on the weekend retreat is, basically a lot of successful executives have gone through their life with one specific game, which is how do I be successful? But what I find is, and I’ve done this work a lot in Europe and a little bit in the US, where leaders get to early 40s, mid 40s, late 40s, and now they are asking now what? Now what do I do? I’m a VP, I’m the head of a business unit and now what do I do? And they are struggling with this question, but they have no idea how to resolve it. So this weekend, the retreat we do is a retreat all around helping people find purpose for their life for the next 10 years and then translate it into practical actions.
And the way the workshop happens is you start people right from the beginning, it’s almost like a journey through your life. And you start at birth and you go all the way to your death, literally, in a very facilitated process. Where you reflect on what has been true about you in the past. What are the challenges and opportunity that you are seeing in the current moment? And what is the legacy you want to be remembered for when you’re no longer here?
And it’s a really deep, powerful process that when leaders go through, they start realizing what are the gaps in opportunities in their life. And then the last exercise we do is we get people to think about, okay, given this is where you want to go, what is it that you want to accomplish in the next 10 years? And if you had to come up with a business plan for your next 10 years of your life that you had to pitch to an investor, what business plan would you come up with? And how would you go and talk to the investor about it? And it’s a business plan, not just for your professional life, but also for your personal life.
And what I find is that when leaders go through this exercise, they realize how much more they have in them and how much more they have to offer. And often it leads to dramatic shifts in how these leaders show up in their current job, but often it leads to the next phase of their life in terms of figuring out what is the next big step that they want to do with their lives. It’s very similar to, I don’t know if you read the article or the book by, I think David Brooks, called The Second Mountain, but it’s really what is the second mountain that you need to climb in your life so that you feel that you’ve led a purposeful life?
Will Bachman: Give us some examples of elements of these 10 year plans that people come up with.
Guarav Bhatnagar: So I worked with this guy who was a McKinsey consultant for most of his life. And what he realized was, even though he had achieved quite a bit, he was senior director in McKinsey. The one thing that he had always been very passionate about was sports management. But it’s something that he completely suppressed because he couldn’t figure out how he could make any money in it. And he actually as a result of this work and then some subsequent coaching with me, is now leading … this is in Europe, so he’s leading a football club in Europe now. Which he finds so much meaning and purpose in. So he’s now the director of this football club in Germany and he’s done that performance around the football club and really, really feels so much more excitement and energy in himself and in what he’s done in the last four years.
Will Bachman: Do people come up with and have new purpose on the more personal side, do people make transformations in kind of how they’re interacting with their family or with nonprofits or, talk to me about that side.
Guarav Bhatnagar: Sure, sure. I mean, I’ve seen people’s relationship with their families fundamentally change. There are people who’ve had very challenging relationships with their children and they have fundamentally shifted that. A lot of people end up joining boards of nonprofits, which, and historically they’ve not been engaged. So there’s a lot of things that happen in that session. And, there are some where people don’t change their roles at all, but they just change how they show up at work. And just by doing that, they fundamentally change the trajectory of their organization.
Will Bachman: And can you share any more about the types of exercises that you’ll walk people through? You talked about getting people to reflect on what’s been true in their life. What are some of the other, kind of reflective exercises that you have people work on?
Guarav Bhatnagar: So there’s one exercise which is basically which is the eulogy exercise, which I’m not sure whether you, but basically what you say is, hey, let’s imagine that you passed on, but you have an ability to hear what people are saying about you. And there are five people who you want to come and give a eulogy when you pass on, who are those five people? And at least one of them has to be from your workplace. And one has to be someone who’s a child. What would you want those people to say about you? Not what they would say, but what would you want them to say about you? And you get people to write that down and share and reflect on it.
And then the next part of the exercise is to say, what if you were to pass away today, what would those same five people say about you today? And what’s the gap?
Will Bachman: Yeah, I can see how powerful that would be. I’m already thinking about who my five people would be.
Guarav Bhatnagar: Yeah. Another one which is interesting is which is more about communication in a way. It’s a really simple exercise, which is imagine you’re on an airplane and the pilot comes on and says, ladies and gentlemen, unfortunately we’ve developed significant problems. The plane is going to go down in the next three minutes. Somehow we’ve been able to turn on your telephone connectivity and you can make one phone call to someone special to you. Who would that person be and what would you tell them in those two minutes? And you ask people to write it down. And that’s just before a break. And then we say, by the way, why are you waiting for the plane to go down, pick up the phone and call them? And it just, in that I have seen people’s relationships with some very special people in their life, profoundly change.
Will Bachman: Are you planning to do any of these sessions in the near future?
Guarav Bhatnagar: Yeah. So we are planning to in the middle of this year towards the … Yeah. So third quarter or second quarter of this year, we’re planning to run a session like this in the US and then we’ll most likely we are going to do it in Colorado because I’ve found a venue there. But the idea is you want to take people away from their normal circumstances into nature because nature has a different way of getting people to a different state to do this kind of work. And we are hoping that we can get this done either in the second quarter, the third quarter of this year.
So if anyone is interested and maybe they can reach out to you Will, or to me because we would love to have people in there. And again, it’s a small group thing. So we typically don’t want more than 12 people. So it gets filled out pretty quickly.
Will Bachman: Great. Yeah, I was going to ask you Guarav, to share what’s the best place for people to find you online and to connect with you?
Guarav Bhatnagar: Sure. So online, the best way would be go onto LinkedIn or go to our website, which is cocreationpartners.com. Or send me an email at: firstname.lastname@example.org. And then I’d be happy to come back to you with availability and I really, as well, you know this work around culture and around human potential is my passion. And if any one of you at an individual level or at a collective organizational level have some challenges, you don’t need to hire me. I’m just here to talk about it because this is a passion and I believe organizations and individuals in business positions, senior business positions essential to transforming the world. So I’m available to engage with you in a conversation anytime.
Will Bachman: That’s very, very generous of you Guarav. And I know examples where you’ve done that in the past. Thank you so much for joining. This was a really fascinating conversation. Great to have you on the show.
Guarav Bhatnagar: Thanks a lot. I look forward to hearing the reaction to the show.
Will Bachman: Thanks for listening to this episode of Unleashed. The show that explores how to thrive as an independent professional. Unleashed is sponsored by Umbrex, the world’s first global community of top tier independent management consultants. The mission of Umbrex is to create opportunities for independent management consultants to meet, share lessons learned and collaborate.
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