Question: Defining company culture of a newly divested company

Our company is a recent spinoff of a Fortune 10 organization, famous for its results-oriented culture. Our entire senior management team are veterans from that company, and our new investors have given us a a lot of flexibility in running operations as we see fit.

Some of the past corporate practices, like having a separate quality organization, require a higher cost base, may not be feasible in our leaner organization. So we will need to be differently organized.

Any pointers on how we should strike a balance in carving out a new identity for ourselves, while retaining our DNA (a treasure trove of best practices and good messaging for external stakeholders.)

4 Expert Insights

Bully for you for being intentional about shaping your culture! You will have a culture whether you are strategic about it or not, so it's great to be aiming for the culture you want. This is a superb opportunity to determine the identity you want to have: what do you want to be known for by your best customers five years from now? With the high degree of transparency facilitated by social media, your identity = your culture, so what you say must = what you do and reward!

One way to proceed in shaping your desired culture is to facilitate dialogue about it. What do you want to retain from the parent company? What is it about your new company that led to its being spun off, and how will you distinguish yourselves? Can you embed quality management into everybody's job, rather than assign it to a department? What commitments are you ready to make to your employees, customers, and investors? This dialogue about your desired culture represents a wonderful opportunity to engage your people in getting their new company off to a resoundingly successful start.

Jon has some great points, and I agree that engaging the workforce (and possibly even the customers) in defining the new organization is a way to build and grow organically.  One thought - I worked with an organization that made a similar move  divesting from an organization that was the role model for every other organization in the US.  Three years after the move, they were still struggling with their identity, as the legacy leaders and those with new and different ideas never came to agreement.  

It makes sense to me to perhaps start with a clean slate in terms of vision, values and customer focus, bringing all of the leaders together to pretend that you are a start up.  Go through the exercises as if that were the case and see where you end up.  Then take the best from the former parent and see what fits your new identity.  This was a step that the organization I mentioned didn't take, and the legacy programs were adopted even though they didn't fit the new model, and weren't really aligned with the new vision.  

Once you've done the start up work, you have clarity on who you are, and you are better able to look at legacy programs critically, taking what works because you are clear about who you are.

This is a really exciting time for you, and I would encourage you to use the energy of your workforce as well to help define who you will be.  In addition to greater buy-in, this may unearth some ideas that leadership never thought of.

The best of luck to you!

Form follows function, structure needs to support the business plan/resources.  Operating leaner, while necessitating structural trade-offs, doesn't have to also mean losing'DNA sequences' if leaders focus on identifying desired capability and value; map this across current structure/capabilities/resources; determine how/where to best develop said value and develop  clear metrics to track progress/flag deviations & make adjustments as the company establishes its footing over the next 6-18 months.  Structure can take many forms - with intention (and some investment), DNA and culture can remain (mostly) congruent.  

I would also venture to guess there are, beyond structural solutions, effective ways to support desired value creation (like what a separate quality organization offers) through management, process and cultural development as well.  (Equifinality = there are many paths to the same goal -- . Being a 'leaner' organization, there are likely important trade offs to be considered, the negative effects of which can be minimized with good planning/intentional design, leadership awareness/consistency and well-targeted management/employee engagement & development.  

Culture is best defined as, "how we do things around here", is rooted in the assumptions, beliefs and values (values = what's most important) of the collective and is mostly influenced by leadership + customer environments.  You have high-talent/experienced leaders in place who are already in sync with customers/markets - the path to 'striking a balance carving out a new identity while retaining DNA' rests in engaging leaders (and others) in the right dialogues/assessments (grounded in systems thinking) and guiding a process for them to develop the right systemic capabilities/awareness, establish desired assumptions/beliefs and infuse/support desired values throughout the organization.  

You are in a great situation and Jon (above) highlights key questions that you would be well advised to explore together.

I would add another branch to this tree which may echo Carol to some degree - what do your veteran senior management team need to unlearn and/or not do any more? They may be really great at what they did but this new organization is going to make new demands on them and in such situations there is often a danger that senior managers will carry with them all sorts of assumptions about how things should be done which will not be positive or useful in the new environment.

You will benefit from loads of regular, challenging and open communication.