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I'm a partner in the advanced analytics group at Bain & Company, the global management consulting firm. My primary focus is on marketing analytics (bio). I've been writing here (views my own) about marketing, technology, e-business, and analytics since 2003 (blog name explained).

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January 17, 2014

Culturelytics

I'm working on a book. It will be titled Marketing and Sales Analytics: Powerful Lessons from Leading Practitioners. My first book, Pragmalytics, described some lessons I'd learned; this book extends those lessons with interviews with more than a dozen senior executives grappling with building and applying analytics capabilities in their companies. Pearson's agreed to publish it, and it will be out this spring. Right now I'm in the middle of the agony of writing it. Thank you Stephen Pressfield (and thanks to my wife Nan for introducing us).

A common denominator in the conversations I've been having is the importance of culture. Culture makes building an analytics capability possible. In some cases, pressure for culture change comes outside-in: external conditions become so dire that a firm must embrace data-driven objectivity. In others, the pressure comes top-down: senior leadership embodies it, leads by example, and is willing to re-staff the firm in its image. But what do you do when the wolf's not quite at the door, or when it makes more sense (hopefully, your situation) to try to build the capability largely within the team you have than to make wholesale changes?

There are a lot of models for understanding culture and how to change it. Here's a caveman version (informed by behavioral psychology principles, and small enough to remember). Culture is a collection of values -- beliefs -- about what works, and doesn't: what behaviors lead to good outcomes for customers, shareholders, and employees; and, what behaviors are either ignored or punished.

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Values, in turn, are developed through chances individuals have to try target behaviors, the consequences of those experiences, and how effectively those chances and their consequences are communicated to other people working in the organization.

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Chances are to  culture change as reps (repetitions) are to sports. If you want to drive change, to get better, you need more of them. Remember that not all reps come in games. Test programs can support culture change the same way practices work for teams. Also, courage is a muscle: to bench press 500 pounds once, start with one pushup, then ten, and so on. If you want your marketing team to get comfortable conceiving and executing bigger and bolder bets, start by carving out, frequently, many small test cells in your programs. Then, add weight: define and bound dimensions and ranges for experimentation within those cells that don't just have limits, but also minimums for departure from the norm. If you can't agree on exactly what part of your marketing mix needs the most attention, don't study it forever. A few pushups won't hurt, even if it's your belly that needs the attention. A habit is easier to re-focus than it is to start.

Consequences need to be both visible and meaningful. Visible means good feedback loops to understand the outcome of the chance taken. Meaningful can run to more pay and promotion of course, but also to opportunity and recognition. And don't forget: a sense of impact and accomplishment -- of making a difference -- can be the most powerful reinforcer of all. For this reason, a high density of chances with short, visible feedback loops becomes really important to your change strategy.

Communication magnifies and sustains the impact of chances taken and their consequences. If you speak up at a sales meeting, the client says Good Point, and I later praise you for that, the culture change impact is X. If I then relate that story to everyone at the next sales team meeting, the impact is X * 10 others there. If we write down that behavior in the firm's sales training program as a good model to follow, the impact is X * 100 others who will go through that program.

Summing up, here's a simple set of questions to ask for managing culture change:

  • What specific values does our culture consist of?
  • How strongly held are these values: how well-reinforced have they been by chances, consequences, and communication?
  • What values do I need to keep / change / drop / add?
  • In light of the pre-existing value topology -- fancy way of saying, the values already out there and their relative strength -- what specific chances, consequences, communication program will I need to effect the necessary keeps / changes / drops / adds to the value set?
  • How can my marketing and sales programs incorporate a greater number of formal and informal tests? How quickly and frequently can we execute them?
  • What dimensions (for example, pricing, visual design, messaging style and content, etc.) and "min-max" ranges on those dimensions should I set? 
  • How clearly and quickly can we see the results of these tests?
  • What pay, promotion, opportunity, and recognition implications can I associate with each test?
  • What mechanisms are available / should I use to communicate tests and results?

Ask these questions daily, tote up the score -- chances taken, consequences realized, communications executed -- weekly or monthly. Track the trend, slice the numbers by the behaviors and people you're trying to influence, and the consequences and communications that apply. Don't forget to keep culture change in context: frame it with the business results culture is supposed to serve. Re-focus, then wash, rinse, repeat.  Very soon you'll have a clear view of and strong grip on culture change in your organization.

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