Changing corporate culture is the ultimate test of any leader. In fact, no business will survive over a long term period if it can’t reinvent itself. And human nature being what it has always been, it will resisted this change. This makes us believe that leading change is very essential, yet the most difficult task of all.
Overview of Changing Corporate Culture
A retired Harvard Business School Professor named John P. Kotter understood the concept of changing corporate culture. He published a book in the year 1996 called ”Leading Change”. In his book, he outlined 8 critical factors that determined success where change was concerned in an organization or business setting.
He talked about creating an extraordinary sense of urgency, creating short term goals, to changing corporate culture as a whole. What makes his book so special is that it contains some truths that will hit you hard the moment you read them — you end up feeling like you’ve always known them but you’re just not implementing them. And now a decade later, his good work of leading change still stands out.
Therefore, in this article, we have summarized the key points of the book, and we’ve rounded them into 4 solid steps to leading change successfully. We couldn’t refer to any other credible source than this.
1. Recognizing the Problem With a Matter of Urgency
At some point, a good leader will look at a company’s competitive situation, technological trends, market position, as well as financial performance. Obviously they can’t ignore the likelihood of losing a large part of company revenue if an important patent expires. Likewise, they can’t keep ignoring the promising market that everyone else seems to ignore.
Once they have this data handy, they find ways of communicating it to other employees broadly and dramatically. They talk about potential crises or opportunities that need to be explored in a timely manner.
You see, to get the transformation process rolling, it requires the corporation of many individuals. And without motivation in their part, they won’t contribute, and so their morale will go down.
This is the first step that companies mostly fail at. The reason being; they tend to underestimate the amount of effort needed to get people out of their comfort zones. The managers involved worry about many things, thus asking many what ifs questions.
This phase only requires setting up a new change system, and this needs leadership with a renewed mind. The people leading their respective departments need to approach it with a renewed mind, plus they shouldn’t under-estimate this process, thinking it’s a walk in the park.
2. The Goal
Many transformation efforts must start with a goal — or a common picture of the future that everyone seems to be pleased with. A vision is critical because it clarifies the direction in which the organization should be taking.
It usually starts with a single person, then the whole team adapts it. The results could take months, or even years. As a result of some analytical thinking, a plan is hatched, and this plan will lead the way to achieving this vision.
However, forming a vision needs a number of things to be considered. For instance, in a mid-sized company whose main job is to manufacturer products, the initial vision mostly contains 2/3 of the basic ideas that make the final product. Another part of the vision deals with steps the business will take to get out of low-value activities.
This step is crucial because without it, the company could easily steer into the wrong direction. The human resources department, the sales force department and other sectors of the company in question will not achieve anything despite their efforts. So there has to be a sense of direction, and it has to be clear for all people to understand and follow it.
3. Eliminating Obstacles in the Process
This step involves motivating employees to try new approaches, develop new ideas and provide leadership in their respective fields. There’s an element of good communication of values and ideas — but it is never sufficient to only communicate. Even with a renewed mind, there has to be a path that is free from obstacles in order for business processes to flow well.
In many cases, an employee will understand the new vision, and they will try working hard to achieve it. However, an elephant will keep blocking their way.
However, sometimes this elephant is only in their mind, and so a leader needs to change their mind by telling them that no external constraint exists.
In other cases, this elephant is the organization’s culture. Sometimes it’s the performance appraisal or compensation system that is making them choose between the new vision and their personal interest. And the worst of all is where a boss refuses to change. So all they do is to make demands which are not consistent with the new vision.
4. Short Term Accomplishments
Transformation is a process that takes time. This means that if the system lacks short term goals to meet and celebrate about, the effort applied is bound to lose momentum.
You see, this is human nature. Most people won’t be compelled to do what they are doing unless they can see results within the first 1 or 2 years. So without short term wins, they give up or join the group that is resistant to change.
In a period of 1 to 2 years, a successful transformation process (even if the company hasn’t reached its ultimate goal) will begin yielding short term results. For instance, quality will go up, and loss in the net income will stop. You also find evidence in form of statistics that say there is an increased rate of customer satisfaction, or that the market share has gone up.
However, creating these short term goals are different from hoping to achieve them sooner. In a short term transformation effort, the leader will constantly look at ways to establish goals and achieve them in a short term. They will even recognize employees who are putting in effort. Well-performing employees may be promoted or rewarded with tangible benefits.
Change is a consistent phase that should involve all people working together towards achieving some common goal. It requires constant awareness and effort from both the management and the employee side. That is the only way to changing corporate culture that is retardant to business goals.