Habits as Change Levers - Denison Consulting
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Habits as
Change
Levers
By Daniel Denison and Levi Nieminen
Lasting changes must be embedded
deeply within the fabric of an organization.
Changes that don’t “stick” won’t improve
O
ver 30 years of scholarship has shown
the performance or effectiveness of an that culture can be either a potential
springboard or a potential barrier to
organization. A useful framework for change within organizations, and that ultimate-
ly, culture is a key driver of business performance
understanding the deeper human and social (Sackmann, 2011). Recent advancements in
elements of organization change is the practice now allow change professionals to use a
well-researched set of tools to diagnose organiza-
organizational culture perspective. tions and to plan interventions to create change. ➤
VOLUME 37/ISSUE 1 — 2014 23
Embedding Change in chological” in nature. In a practical context,
this frames the intervention in a way that
For the individual, habits are both functional
and, sometimes, problematic. Personal habits
“the Deep Levels of might either be construed as ‘off limits’ (i.e., provide structure and constancy, reduce
not modifiable) or “off putting” to business uncertainty, and free up cognitive resources
Culture” leaders (i.e., generating skepticism or nega- for a select number of complex tasks. Habits
tive stereotypes).More importantly, we can also be dysfunctional, such as when they
The “iceberg model” is the dominant way of think it misses an opportunity to address the are expressed rigidly despite a context mis-
representing the multiple layers of culture targets of change that span across these three match (i.e., mindlessness) or when individuals
(Schein, 1985).Above the water’s surface, levels emphasized by the iceberg model. fail to appropriately switch between auto-
artifacts are the visible, tangible manifesta- matic and effortful behavior (Luis & Sutton,
tions of culture in various attributes of the The habits and routines that span these three 1991). The powerful effect of personal habits
physical workplace. Just below the surface, levels of culture guide much of what happens has been studied in a wide range of situations,
espoused values characterize the preferences within organizations, yet they have received from healthcare to the workplace and com-
and aspirations that are shared within the little attention from organizational scholars petitive sports (e.g., Grant & Schempp, 2013).
organization and which contribute to a
shared sense of identity and meaning. Behav-
ioral norms and work practices also reside
at this level, constituting “the way things are
done around here.” And in the deeper water,
Organizations, too, have habits and routines (i.e.,
far below the surface, lie the beliefs and larger, sequenced bundles of habits) which set them
assumptions—the underlying mindsets—
which shape the culture at a fundamental apart and provide internal structure.
level and influence its manifestation at all
other layers. Together, these visible and
invisible layers comprise the culture of an
organization (see Exhibit 1). and practitioners. It is here, in these “auto- Habits also appear and are enacted with
matic” and repetitious behaviors that practi- consistency among and within groups of
As a conceptual model, the iceberg creates tioners can find a powerful point of leverage people, from families to societies. Organiza-
an awareness of depth for practitioners, rein- to affect the change process, deep within tions, too, have habits and routines (i.e.,
forcing the idea that much of what drives organizations. larger, sequenced bundles of habits) which
behavior in the organization is hidden from set them apart and provide internal structure
plain view. This, of course, encourages us all (Pentland & Feldman, 2003). Habits are
to look for those deeper factors, making nec- Habits: Old and New, inherently cultural. They reflect all three
essary a set of diagnostic tools and method-
ologies that are up to the task. The iceberg
Good and Bad levels; the underlying assumptions about
“the way we do things around here,” the
also focuses the point of change intervention values that those assumption represent, and
Drawing on neuroscience, Graybiel (2008)
at the deepest level, at the layer of underlying the visible behavior and artifacts that we can
provides a technical definition of habits as the:
beliefs and assumptions. According to the see in action. Functionally, they capture the
theory, it is this deepest layer that is the most organization’s specific knowledge that has
sequential, repetitive, motor, or cog-
consequential for the organization—this is been created over time and then translate
nitive behaviors elicited by external or
the part of the iceberg that “sinks the ship”— that knowledge into action in an efficient
internal triggers that, once released, way that conserves energy and resources.
and hence where the most crucial action
can go to completion without con- Denison, Hooijberg, Lane, and Lief (2012)
needs to be focused. Accordingly, change
stant conscious oversight (p. 361). developed a useful framework (see Exhibit
needs to be embedded at this same depth to
have a lasting impact within the organiza- 2) that puts habits and routines into one of
Decades of research has shown that habits four categories based on two aspects: good
tion.
are: or bad and old or new. Each combination
The iceberg model has had a profound influ- calls for a different set of possible actions.
ence on both the academic study of culture r predominantly acquired through experi-
and the way in which practitioners affect ence and interaction with the environment; Bad, Old Habits: Unlearn and Leave Behind.
culture change in organizations. This three- r are repetitious and can become resistant to Bad habits are “like chains that are too light to
level model has often been interpreted to change, such as in addiction; feel until they are too heavy to carry,” as War-
suggest that changes must be targeted at one ren Buffett said. Often, we are too late to
of the three different levels. Interventions at r are performed with little conscious thought realize how restrictive our old habits have
the levels of visible behaviors or values are or effort; become and miss the opportunity to do some-
sometimes downplayed in favor of the points t h i ng about t hem. Un lea r n i ng t hese
r can be elicited by environmental or inter-
of leverage that exist in “the deeper levels of well-established habits can be very difficult,
nal cues; and finally, but that is exactly what needs to happen. To
culture.” Because beliefs and assumptions
are cognitive, in that they reside in the mind- r the expression of habits can be behavioral leave behind bad, old habits, organizations
sets of people, this suggests the most or cognitive, such as in habits of thought need a clear focus on the areas of consensus
impactful interventions ought to be “psy- (Graybiel, 2008). about these targets for change. With a clear
24 PEOPLE & STRATEGYfocus, organizations can start building prog-
ress and momentum and develop the experience
and conviction to take on bigger challenges.
Often, we are too late to realize how restrictive our
old habits have become and miss the opportunity to
Good, Old Habits: Preserve and Strength-
en. In the midst of organizational change, do something about them. Unlearning these well-
it can be easy to forget to protect those ele-
ment s of t he c u lt u re t h at m ade t he established habits can be very difficult, but that is
organization great. Some of the old and
well-established habits and routines from
exactly what needs to happen.
an organization’s past are still essential to
the organization’s success in the future.
They are clearly understood by the organi-
zational members, make up a key part of Good, New Habits: Invent and Perfect. The When driving successful changes, leaders
the organization’s mindset, and are closely opportunity to create new habits might be the choose the “keystone habits” that can have
linked to other aspects of the organization’s most exciting part of the culture change pro- the biggest impact on the organization.
functioning. Therefore, it is vital for orga- cess. However, creating new habits and Below are three real case examples that illus-
nizations to clarify the core habits and routines is difficult, as there are several pieces trate the role of keystone habits in creating
routines that they need to preserve and to the puzzle. Mindset, behavior, and systems successful and sweeping change in organiza-
strengthen. must all change together to reinforce the tions.
adaptation process for the organization.
Bad, New Habits: Rethink and Try Again.
During the time of change initiatives, orga-
Organizations cannot simply change people’s
mindsets, prescribe a new set of behaviors to Identifying Keystone
nizations attempt to create various new
habits and routines. However, culture
follow, or mandate a new system. Instead,
organizations need to persistently push hard-
Habits: Three Case
change requires a lot of trial and error. Cre- er and harder on all three of those levers at Examples
ating a new set of habits and routines does once, until signs of success manifest and
not always mean that they are going to work encourage others to join in to help build the One of the inspirations for our attempts to
as intended the first time and fit the situation momentum. understand how organizations identify the
well. The culture of every organization rep- keystone habits that are the most promising
resents its wisdom accumulated through Analyzing an organization’s culture as a targets of intervention comes from Charles
years of experimentation. Enlightened trial- bundle of habits that fit into these four cat- Duhigg’s best-selling book, The Power of
and-error is critical when trying to create the egories serves to focus the discussion on key Habit (2012). In this book, Duhigg tells the
new habits and routines to transform an areas of consensus that reveal a targeted and story of the early days of Paul O’Neill’s term
organization’s culture. practical agenda for change. as CEO at Alcoa. After a long struggle to find
some targets for improvement that would be
supported by both the management and the
EXHIBIT 1. ICEBERG MODEL OF ORGANIZATIONAL CULTURE workers at Alcoa, O’Neill decided to put his
emphasis on safety. During a time when
there was little alignment between manage-
ment and the workers, this was the area that
he saw as being most likely to build collabo-
ration. The organization set the goal of
having zero injuries, and the main point of
intervention was that all injuries, world-
wide, must be reported to the CEO’s office
within 24 hours. The best way to solve this
problem, or course, would be to have no
injuries. Though the goal of zero injuries was
not achieved, both management and the
unions learned to move fast with a level of
transparency that was unprecedented.
This safety effort took serious commitment
by everyone involved, but in the end it was
very effective. The unexpected impact was
that changing this single set of habits and
routines concerning the way that the organi-
zation managed safety incidents created a
level of transparency that was new to the
organization. The company discovered that ➤
VOLUME 37/ISSUE 1 — 2014 25it could share information about perfor-
mance, about best practices, about business EXHIBIT 2. CHANGING CULTURE BY CHANGING HABITS AND ROUTINES
opportunities to a much greater degree than
it had in the past. So, these underlying beliefs Preserve Invent
Good
about transparency and collaboration spread & &
broadly throughout the organization. Strengthen Perfect
O’Neill credits this process with leading
Alcoa to a dynamic, new level of perfor-
mance that lasted for most of the decade. Unlearn Rethink
Bad
& &
A second habit change example involves the
Leave Behind Try Again
Metropolitan Transit Authority (MTA) of
New York City, which manages all public
transportation in and out of the city. This
includes a high-volume subway system, Old New
which carries an average of 5.4 million pas-
sengers per day (1.6 billion per year)!
Servicing the 820 miles of track comprising
the subway system is a major and ongoing
task, one of several maintenance functions small strategic and operating feat, but at the a deeper appreciation and understanding of
that are crucial to keeping the trains moving core, the MTA achieved a shift in one fairly the specific needs of multiple end users,
and the people on them safe. In the past, all simple keystone habit: they can stop the including the patients, the doctors and nurs-
maintenance to the tracks was done on the trains. es, and the hospitals and insurers. Over time,
weekends, late at night when the train vol- this keystone habit did help to restore qual-
ume was lowest. With the crews repairing A final example involves GE Healthcare Chi- it y and customer reputation. It also
the tracks in the short windows between broadened the role and skill set of the engi-
na.1 GE entered an emerging Chinese market
oncoming trains, the maintenance work was neers and became a focal point for talent
in the early 1990s. In the decade that fol-
slow, expensive, and quite dangerous. How- recruitment and retention. Moreover, it
lowed, GE expanded its anesthesia business
ever, the old strategy was deeply engrained opened up new insights and new product
through the acquisition of two companies,
in one of the MTA’s strong points of pride: innovations, and by 2010, one of these new
Datex-Ohmeda and Zymed, both of which
keeping the trains moving, no matter what products was shipping to emerging markets
were strong global brands with a presence in
and at all costs! The keystone habit in this all over the world!
China. Zymed became the center-point of a
case directly challenged this point.
new and growing business, Clinical Systems
Wuxi (CSW) in Wuxi, China. CSW was From these case examples we can begin to
In 2010, the subway system experienced a learn some useful principles for targeting key-
responsible for the design, engineering, and
number of high-profile safety incidents, cul- stone habits as high impact areas of action.
production of anesthesia equipment. The
minating in a worker fatality in April and Below, we outline three principles for change
then a blizzard in December that left some rapid growth of this business exposed
increasing weaknesses in quality and declin- management professionals to consider.
passengers stranded in train cars for over 12
hours without food, water, or heat. Follow- ing customer reputation, eventually resulting
ing these incidents, an unprecedented in the business halting distribution of prod- Principles for
ucts for a period of time.
decision was made to stop the trains. The
president of the Department of Subways,
Intervening on
Carmen Bianco, architected a program In 2007, a new general manager was appoint- Keystone Habits
called FastTrack to identify and shut down ed, Matti Lehtonen. It was clear to Lehtonen
whole sections of track for maintenance that restoring quality and customer service Principle 1: The diagnostic process
beginning at 10 p.m. and reopening the fol- should be the top strategic priorities moving should differentiate keystone habits
lowing day at 5 a.m. For the first time, this forward. Lehtonen and his senior team from ordinary habits by looking for
allowed service workers uninterrupted implemented a simple yet extremely power- impact and interconnectedness.
access to the tracks, signals, cables, and ful intervention by requiring their engineers
other rail components. Initially, the public to visit operating rooms and witness their Like most change efforts, the process begins
reaction was a widespread outcry. Subway anesthesia equipment being used in live sur- with diagnosis. The cascading effect seen in
passengers, like MTA workers, were unac- gical procedures. In this case, a single Alcoa was described by Duhigg as seren-
customed to any interruption to service. habit—sending people out to where the cus- dipitous, but acting intentionally to modify
Over time, however, the sweeping, positive tomers are—had a profound set of cascading or build keystone habits calls for a reliable
effects were staggering! FastTrack improved effects. Seeing the equipment in use added diagnostic process that pays attention to the
productivity, saved money (estimated sav- new meaning and clarity about the purpose right factors. Practitioners need to develop
ings of $16.7 million in 2012), cut accident of the work and provided the engineers with the skills (and methodologies) to identify
rates nearly in half, and increased train reli- and distinguish keystone habits from ordi-
abilit y by nearly 5%. T he successful 1
For more on this case, see Denison, Hooijberg, Lane, & nary habits. Each of the case examples above
implementation of this program was no Lief (2012). highlights two interrelated factors that can
26 PEOPLE & STRATEGYGraybiel, A. M. (2008). Habits, rituals, and
the evaluative brain. Annual Review of Neu-
New habits are unlikely to take hold in organizations roscience, 31, 359-387.
without diligent and concerted efforts for socializing
Louis, M. R., & Sutton, R. I. (1991). Switch-
and embedding them. ing cognitive gears: From habits of mind to
active thinking. Human Relations, 44, 55-76.
help to focus the diagnostic process: key- efforts for socializing and embedding them. Feldman, M. S., & Pentland, B. T. (2003).
stone habits are linked to the organization’s We think that finding ways to reinforce key-
Reconceptualizing organizational routines
effectiveness (impact), and keystone habits stone habits and make their performance
rituals within the organization is an important as a source of flexibility and change. Admin-
are tightly interwoven with other habits,
routines, and processes in the organization part of the solution, so that the desired behav- istrative Science Quarterly, 48, 94-118.
(interconnectedness). This means that iors take on greater symbolic and psychological
intervening on keystone habits is likely to meaning over time. The meaning of rituals is Mallidou, A. A., Cummings, G. G., Schalm,
have a cascading effect, so that change often created and reinforced through storytell- C., Estabrooks, C. A. (2012). Health care aides
started in one place leads to many other ing and celebrations, or as Durkheim use of time in a residential long-term care unit:
changes in many other places. For example, suggested, through the communication of
A time and motion study. International Jour-
the act of eating together strengthens the social norms that distinguish the “sacred from
the profane” (as cited by Boyce, Jensen, James, nal of Nursing Studies, 50, 1229-1239.
social bonds within the family but also
aligns a number of the habits and routines & Peacock, 1983). These are opportunities for
leading up to and following the mealtime. the organization, often leaders, to clarify the Sackmann, S. A. (2011). Culture and perfor-
value of the new, good habits and the need to mance. In N. Ashkanasy, C. Wilderom, & M.
Principle 2: Keep the scope of inter- extinguish the bad, old ones. Peterson (Eds.), The handbook of organiza-
vention small by tapping into the tional culture and climate, 2nd ed., 188-224.
right habit(s) and affecting scalabil-
ity through the repetition of this
Conclusion Thousand Oaks, CA: Sage Publications.
habit.
Viewing organizational cultures as bundles Schein, E. (1985). Organizational culture and
of habits and routines, we believe that “key- leadership. San Francisco, CA: Jossey-Bass
When it comes to intervening on keystone
stone habits” in particular can serve as
habits, the “scalability” of impact is hardly
powerful leverage points for change manage-
determined by the size or scope of the inter-
ment professionals seeking to embed their
vention. Habits are repetitious. Some are Daniel Denison is Professor of
work deep within organizations. Daunting as
repeated on a daily or weekly basis and oth- Organization and Management
culture diagnosis and intervention may be,
ers moment to moment. This is a powerful at the International Institute
focusing on small habits with big implications
reminder that the best interventions will for Management Development
might be the best place to start and a great
stay focused and tap into the right habits (IMD) in Lausanne, Switzerland
way to ensure that the change does far more
rather than attempting to “boil the ocean.” and Chairman of Denison Con-
than scratch the surface.
As one example of a small habit with large sulting. Since receiving his Ph.D.
i mpl ic at ion s , M a l l idou , C u m m i ng s , in Organizational Psychology
Schalm, and Estabrooks (2012) found that References from the University of Michigan,
minor interruptions in nurses’ interactions Dr. Denison has authored numer-
with patients, such as when called to assist Boyce, W. T., Jensen, E. W., James, S. A., & ous books and journal articles
another patient or staff member, have a Peacock, J. L. (1983). The family routines describing his research and con-
significant deleterious effect on patient care inventory: Theoretical origins. Social Sci- sulting linking organizational
and health outcomes. A simple but power- ence and Medicine, 17, 193-200. culture to bottom-line business
ful intervention in this context could performance.
redefine the keystone habit as “staying with Denison, D., Hooijberg, R., Lane, N., Lief,
your patient to completion of each interac- C. (2012). Leading culture change in global Levi Nieminen is the director of
tion.” Of course, this might also require organizations: Aligning culture and strate- the Research & Development
unlearning some bad old habits, such as gy. San Francisco, CA: Jossey-Bass. group at Denison Consulting in
responding to all requests, even the minor Ann Arbor, Michigan. He com-
and nonessential ones. Duhigg, C. (2012). The power of habit: Why pleted his doctorate in Industrial
we do what we do in life and business. New and Organizational Psychology
Principle 3: Use storytelling and York: Random House. from Wayne State University. His
celebration to “ritualize” the perfor- research focuses on the intersec-
mance of keystone habits. Grant, M. A., Schempp, P. G. (2013). Analy- tion of organizational culture and
sis and description of Olympic gold medalists’ leadership as interrelated drivers
New habits are unlikely to take hold in orga- competition-day routines. The Sport Psy- of organizational effectiveness.
nizations without diligent and concerted chologist, 27, 156-170.
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