Organizational culture is a complex thing. It encompasses the shared values, beliefs, attitudes, and behaviors within a company. Culture affects nearly everything in an organization – from how decisions are made, to how employees interact with each other and customers. It can powerfully enable or obstruct progress and innovation.
For many companies, there comes a time when the existing culture is holding the organization back Perhaps the culture is outdated, overly bureaucratic, or misaligned with the company’s strategy When this happens, implementing cultural change becomes necessary for the organization to survive and thrive. However, culture change is notoriously difficult to achieve. Changing culture means influencing deeply ingrained mindsets and habits across large groups of people. It can be a years-long process fraught with challenges and resistance.
In this article, we’ll break down what’s involved in successfully changing organizational culture. We’ll cover:
- What culture change is and why it’s important
- The main challenges of culture change
- A step-by-step process for implementing culture change
- Tips for making culture change stick
What is Cultural Change and Why Does it Matter?
Organizational culture refers to the shared values, assumptions, beliefs, and behaviors that give an organization its distinct character. It’s the “unwritten rules” for how things are done in a company. Culture includes things like
- The organization’s values and work ethic
- Common attitudes held by employees
- Leadership and management styles
- The level of innovation, collaboration, and transparency
- How employees interact with each other and customers
- How decisions get made
- The level of responsiveness to external change
A company’s culture develops gradually over time, often shaped heavily by founders and top leaders. It is reinforced daily through the actions, communications, policies, and procedures that make up “life” in the organization.
Culture has a profound influence on everything in an organization. It directly impacts employee motivation, retention, productivity, and satisfaction. Culture also shapes a company’s brand, reputation, and ability to attract talent. Research shows that organizations with adaptive, customer-focused cultures consistently outperform the competition.
For these reasons, when an organization’s culture becomes misaligned with its strategy or needs, change is required. Culture change might be necessary if:
- The culture has become too bureaucratic or resistant to new ideas
- The workforce is disengaged and unmotivated
- Innovation and productivity are declining
- Customers are unsatisfied
- Unethical behaviors are emerging or being rewarded
- Key talent is leaving the company
In these cases, culture change helps realign the organization for optimal performance and competitiveness.
The Challenges of Culture Change
While culture change is sometimes necessary, it is extremely difficult to accomplish. Culture is intangible, complex, and deeply ingrained. Changing culture means influencing individual beliefs and habits across large groups. Leaders must convince employees to abandon comfortable, familiar ways of operating and adopt new mindsets and behaviors better aligned with strategy and needs.
Some of the major challenges faced when trying to change organizational culture include:
Employee resistance to change: People inherently resist forces that try to shift their mindsets and daily habits. Many will actively or passively fight changes that make them uncomfortable, creating significant drag on culture change efforts.
Leadership misalignment: Attempts to change culture easily stall if leaders do not fully commit to supporting and reinforcing the change. Mixed signals from leaders create confusion and breed cynicism and resistance among employees.
Lack of skills/understanding: Employees may lack the skills needed to adapt to the new cultural vision, or they may misunderstand what changes are expected of them. This slows adoption of new behaviors.
Entrenched legacy culture: The more established a culture is, the harder it is to reshape it. Deeply entrenched legacy cultures contain strongly held assumptions that are hard to identify and influence.
Measurement difficulties: Unlike other business initiatives, culture change is hard to quantify. It’s difficult to set targets, track progress, and measure success. This complicates efforts.
Impatience: Given the gradual pace of culture change, some leaders or employees may become frustrated with the speed of progress and give up. Culture change requires persistent commitment over many years.
These challenges underscore why effecting successful, sustainable culture change requires careful planning, communication, and a multi-pronged approach.
A Step-by-Step Process for Culture Change
Changing culture is a marathon, not a sprint. While every culture change initiative will be unique, most follow a similar high-level process:
1. Define and Diagnose the Current Culture
To cultivate change, you must first understand the existing culture. This requires identifying current cultural strengths and dysfunctions, and pinpointing areas needing realignment. Key questions to answer include:
- What are our current cultural values and norms? What behaviors are rewarded and discouraged?
- How well is our culture aligned to our strategy and needs? What specific misalignments exist?
- What pain points is our culture causing (low engagement, high turnover, stagnant growth etc.)?
- What cultural traits do we need to preserve or enhance? Which need to change?
A cultural audit can uncover this understanding through surveys, interviews, focus groups and workplace observations.
2. Determine the Ideal Culture
Once you understand the present culture, define the optimal culture you want to develop – your cultural “north star.” The ideal culture should align to strategy and needs. Key questions here include:
- What cultural traits and behaviors will allow us to execute our strategy and meet needs?
- What values must the culture embody? How must norms and mindsets shift?
- How can we preserve existing cultural strengths while making necessary changes?
Involve leaders and employees from across the company in shaping the cultural vision.
3. Develop a Detailed Change Strategy
With the current and future state cultures defined, craft a detailed strategy for bridging the gap between the two. This should outline specific changes in behaviors, initiatives, policies, processes, and incentives required to influence culture in the right direction.
- Identify key behaviors that need to shift among leaders and employees
- Map out communication initiatives to convey the vision and urgency of change
- Redesign workplace policies, processes, and incentives to prompt new behaviors
- Plan initiatives to build critical skills and mindsets aligned to desired culture
- Develop ways to measure progress and gather feedback
4. Communicate and Engage
With the strategy set, begin activating culture change through robust communication and employee engagement:
- Communicate the reasons for change, the risks of not changing, and the exciting future state vision
- Involve employees in shaping and socializing change initiatives
- Encourage conversations about the changes and how they impact jobs
- Leverage your employee influencers and champions to model desired behaviors and communicate informally
Two-way communication is critical to surfacing employee concerns so they can be addressed.
5. Implement Changes Aligned to Culture Vision
With employees informed and supportive, begin rolling out the planned changes designed to influence culture:
- Roll out new policies, processes, training programs, metrics etc. aligned to culture vision
- Model new norms through changes in leadership style and behaviors
- Reward and incentivize cultural alignment
- Modify office layouts and workflows to prompt new interactions and behaviors
- Identify “quick wins” to build momentum and reinforcement
6. Continue Reinforcing Change
Culture change requires relentless, long-term focus to take hold. To achieve sustainable change:
- Continuously communicate progress and success stories
- Address any pockets of resistance
- Keep pressing forward with further cultural initiatives and modifications
- Track progress through surveys and observation
- Adapt strategies based on feedback and issues
By maintaining focus, the new culture will gradually become the norm.
Tips for Making Culture Change Stick
Beyond the process above, there are some key principles and practices that can boost the chances of successfully implementing and sustaining culture change.
Secure senior management commitment: The most critical factor in culture change is an authentic commitment from senior leaders. Their mindsets and behaviors must exemplify the desired culture.
Involve employees throughout: Engaging employees as partners in shaping and activating culture change is crucial for overcoming resistance. Make two-way communication a priority.
Start with small “bright spots”: Identify pockets where the desired cultural traits already exist. Nurture and expand these bright spots through incentives and recognition to catalyze grassroots change.
Leverage employee networks: Peer influence can help desired behaviors cascade. Identify and empower respected employees to become informal change champions within their networks.
Use training: Where needed, training helps employees gain the skills and mindsets required to adapt to culture change. It also signals company commitment.
Modify policies and processes: Tweak internal systems and processes to align with and reinforce desired behaviors. Make it easy and rewarding for employees to support the culture shift.
Measure progress: Track quantitative and qualitative metrics on culture to identify what’s working, what’s not, and where to adjust. Anonymous employee surveys can provide valuable ongoing feedback.
Keep iterating: View culture change as an ongoing process, not a one-time event. As some changes take hold, press forward with new initiatives and adjustments to drive culture in the right direction.
The Rewards of Successful Culture Change
Though difficult
What Is Organizational Culture?
We define culture as a shared set of values (what we care about), beliefs (what we believe to be true), and norms of behavior (how we do things). Cultures exist to align effort, engender shared sensemaking, increase predictability, and encode organizational lessons about what does and doesn’t work.
Intuitively, we know that a strong culture is essential for a company’s overall health and competitiveness. As the famous phrase attributed to Peter Drucker points out, “Culture eats strategy for breakfast.” Having the wrong culture undermines the best-laid strategy and organizational development plans. While leaders have been reminded repeatedly that people and culture are essential determinants of success and failure, they haven’t necessarily accepted the need to be proactive in building the types of culture required for their strategies to succeed.
It can be challenging for leaders to “see” culture up close. Like fish unaware of water, senior leaders may become too accustomed to their own perspectives regarding culture. Here, newcomers and front-line employees can help identify cultural beliefs and behaviors that are deeply woven into the organization’s social fabric.
To make transformation a reality in their businesses post-pandemic, leaders must build a strong culture to support it.
As the global community emerges from the COVID-19 pandemic, business leaders must lay the foundation for their organizations to thrive in a very different world. The pandemic accelerated three interlinked types of transformation affecting every industry: the adoption of digital technologies, the development of new business models, and the implementation of new ways of working. Most companies are now engaged in one or more of these types of transformation. Businesses that aren’t — whether because they have ignored the signals or have failed to adapt quickly enough — risk becoming obsolete.
While most executives recognize the transformation imperative, far fewer understand the essential connection between business transformation and culture change. Companies cannot realize the true potential of digital transformation, embrace new business models, or implement new ways of working without supporting changes in organizational behaviors and norms. A recent study by Boston Consulting Group found that companies that focused on culture were five times more likely to achieve breakthrough results in their digital transformation initiatives than those that didn’t.
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Focusing on culture change also can help companies that have not yet embarked on transformation journeys. An adaptive culture provides a foundation for transformation. It also helps organizations overcome cultural fragmentation due to the incomplete integration of acquisitions or a legacy of growth across multiple geographies.
Leaders also need to understand that culture is dynamic and that change will happen in their organizations even if they do nothing to guide it. Employee values, mindset, and behaviors have evolved rapidly in the past year. These changes may or may not be the ones your organization needs, or necessary changes may not be progressing at the right pace.
For these reasons, leaders must take a proactive approach to build the right culture now and avoid the need to reshape culture in parallel with large-scale organizational transformation.
Creating Sustainable Organizational Culture Change in 80 Days | Arthur Carmazzi | TEDxMaitighar
How do you change organizational culture?
The process of culture change begins by targeting one of the three layers of organizational culture. It is important to consider the extent to which the current culture is aligned with the organization’s vision and strategic plans before attempting to change any aspect of organizational culture.
What is organizational culture?
B) Organizational culture is not something that can be physically touched or seen, but employees perceive it on the basis of what they experience within the organization. C) The original source of the culture of an organization reflects the vision of the organizaton’s founders.
How do you define culture and change?
To define culture and change it is hard, and cultures can persist over a long time. By working backward from observed outcomes to behaviors and beliefs, you can hypothesize and begin to validate key cultural attributes and understand their value and origins.
