Change is inevitable, and when embraced, it can benefit companies in ways they would have never imagined. In our article “ The CEO’s Guide to Successful Change Management, ” we discussed how CEOs should approach change management, but one aspect of change that often gets overlooked—is organizational culture.
Organizational culture is the shared beliefs, values, and behaviors of a company’s employees. It determines how people interact, how decisions are made, and whether or not certain initiatives get adopted. As such, it has a direct and significant impact on the success or failure of any organization.
According to Gartner, shifting from a people-focused culture to a process-focused culture can increase performance by 22%. This data shows how important organizational culture is in driving success in any business.
Therefore, it is essential to assess and modify an organization’s culture in order to ensure that it is conducive to success. This can include creating a positive work environment, encouraging open communication between employees and management, implementing systems that allow for feedback, incentivizing desired behaviors, and fostering creativity.
Organizational culture change should be embraced and encouraged. It can help businesses stay competitive, attract top talent, develop innovative products or services, and create a workplace conducive to collaboration and progress.
Whether it’s a minor adjustment, or a total overhaul of your business’ infrastructure, redesigning the way your business works is a great decision.
But how should you instigate an organizational culture change, and how will you benefit from doing so?
This article will provide you with a comprehensive overview of how to effectively change your organization’s culture and the many benefits that come along with it.
How To Begin Organizational Culture Change
Organizational culture change requires a conscious effort on the part of leadership. It’s important to remember that this is not an overnight process and needs to be methodically planned and executed.
We’ve outlined the most crucial steps to help you get started:
Leadership
Your organization should have a clear purpose and vision. This should be communicated from the top down and be embraced company-wide.
Your leaders will drive organizational culture change and, as firm advocates, can persuade staff to act favorably.
Your culture should facilitate progression with elite leadership that maintains important values.
Leaders should set an example through their measures and actions. Positive values are one thing, but an organization’s culture is defined by implementation.
Invest in Culture
Organizational culture change is well worth investing in. Values like team learning should be treasured, where advancing your team’s skills will boost productivity and enhance growth.
Strong business cultures have teeth derived from more than broken promises and slogans.
Some organizations adopt a cut-throat culture, where drastic measures are implemented to
force out those who don’t adhere to the correct behaviors.
What’s more beneficial is when companies offer a reward system that incentivizes employees for positive behavior. This acts as reinforcement, which helps companies align the interests of employees with what’s best for the company.
You can further align your team with company culture by teaching them tools and techniques.
Recognize those who work in line with company culture and celebrate their success. By proving how much you value your team, staff will be incentivized to do great things.
Those who don’t live up to expectations will soon get the message and probably want a piece of the action themselves.
Employee Attitudes
Your employee’s attitudes are a key determinant of success. Implementing a progressive company culture is centered on the mindset of your team.
Employees who embrace the culture will thrive in the work environment, but ideological clashes can inhibit growth. Organizational change can be difficult for employees to accept, so they must be on board.
Organizational culture change needs the support of your team. Employees notice changes firsthand and will validate the culture with their actions.
Your staff are judgemental creatures. They’ll judge every reward, promotion, hire, and fire.
Their reactions to these decisions are a vital component of company culture. They might make comments surrounding their boss’s fairness, and the themes of these conversations play a role in shaping company culture and making the change management process easier for employees.
An appropriate, strong company culture will involve a team of staff who support management decisions. If you’re looking for a fun way to boost employee attitudes, why not try fun games and activities?
Labor Cost Advantages
You can enjoy labor cost advantages with a clearly defined and structured organizational culture.
Why, you might ask? Take a look at this list for clarification:
- Your company will gain a firm reputation among prospective employees
- High level of ownership
- You’ll create a great environment to work
- A more simplified screening process
- A greater yield of prospective employees
- A self-selecting employment process is created
Reaffirm Core Values
Organizations must have a level of flexibility and adaptability woven into their culture as an indispensable trait. This is because the philosophy of thinking that your technique of accomplishing things is the best, with no room for improvement, can weigh down the development and expansion of the business. Such a static mindset will invariably limit the capacity of the company to scale up, and the organization may soon be dislodged by its competition.
Therefore, to breed a culture of innovation and progressiveness, a company culture that is forward-thinking, contemporary, and dynamic must consistently be emphasized. To prevent team members from getting stuck in old habits, it’s important to regularly revisit the organization’s core values and behaviors. This will help embed these values in their minds and avoid potential problems.
It is crucial to benchmark positive actions and find the best ways to apply them in the business. If an organization constantly strives for excellence, it will stay updated with current trends and remain at the forefront.
Reasons for Changing Organisational Culture
There are four primary reasons a business might want or need to alter its organizational culture:
Business Performance
If a business experiences a substantial decrease in sales and profits or is in danger of shutting down, it indicates the need for change in the culture. Although the culture may not directly cause the business’s low performance, it can significantly indicate the need to make changes.
Maybe a business lost competitiveness because it became too comfortable with its existing methods and didn’t prioritize innovation.
Alternatively, a rigid bureaucratic culture could have made it difficult for the business to keep up with competitors who could adapt more quickly and efficiently.
New Leadership/Strategy
When new leaders implement a new strategy, they often believe that a change in culture is necessary because the current culture could hinder the success of the change (Lewin Change Management Model). This was seen in the examples of Satya Nadella at Microsoft, who recognized the need for a cultural shift when implementing new strategic plans.
Satya Nadella introduced a more innovative and collaborative culture, which enabled Microsoft to be at the forefront of the technology world.
External Environment Change
When major unexpected events happen from outside a culture, they can bring about significant changes in that culture. An example of this could be the COVID-19 pandemic, which has caused companies to shift their strategies and focus on digital transformation.
For example, senior management at RBS had created a culture that promoted and rewarded taking excessive risks. However, a different culture was necessary when new leadership took over, especially for businesses that required government assistance, like RBS.
To Support Effective Change Management
An attempt to change culture is often part of major (step) change projects. These may include new leadership, but not always. It is perfectly possible for existing management to identify the need for culture change as part of change initiatives designed to improve the competitiveness of a business.
For example, new processes and/or incentives to encourage innovation might be introduced. Similarly, a business might change from a centralized to a decentralized approach to decision-making – with the need for changes in how the business communicated identified as a key part of the required culture change.
Organizational Culture Change: Taking Care of What Matters
Organizational culture is the foundation of a successful business. If a company neglects its culture, it will become stagnant and unable to keep up with the demands of a changing environment. Therefore, staying on top of culture change should be an ongoing priority for any business.
The key to effective culture change is identifying and prioritizing the areas that matter most and prioritize them. This includes strengthening core values, introducing new incentives and processes, re-evaluating the communication strategy, and ensuring that current trends are consistently reflected in business practices.
With the right focus on culture, businesses can stay ahead of the competition and create an environment that encourages enhanced creativity, enriched collaboration, and cross-sector innovation.
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