Transformational leadership and organizational culture are two must-have keys for executing and managing successful change in an organization.
In this article, we’ll explore these concepts in detail, covering:
- Organizational culture – what it is and why it matters
- Transformational leadership – how change leadership differs from change management, and why both are critical for success
- The role that leadership and culture play in transformations
- When and how to lead cultural change
Today, the business world is evolving faster than ever, making this knowledge more relevant than ever.
Executives, change managers, and any other business professional involved with managing organizational transformation should thoroughly understand these concepts before embarking on any change project.
What Organizational Culture Is and How It Affects a Business
Organizational culture refers to a company’s values, beliefs, and assumptions.
A company’s culture is originally created by the founders of the business. However, other factors also affect the culture over time, such as the influence of new hires and the collective experiences of the workforce.
Company cultures can have a number of describable traits, just as an individual can have personality traits.
For instance, cultures can be:
- Open to change
- Averse to change
In some cases, traits such as these can have a big impact on organizational changes.
In others, they may be neutral and have no effect at all.
However, when a business engages in full-scale organizational transformation, cultural changes may be very desirable – or even necessary.
Organizational Change vs. Organizational Transformation
Though some people use these terms interchangeably, others assert that they are very different.
According to this school of thought, an organizational change is a change to a certain dimension of the business.
For instance, a company undergoing digital transformation may adopt a new SaaS platform.
This change would involve processes such as:
- Software implementation
- Employee training
- Optimizing software utilization
- Planning for and mitigating impacts to services
In this scenario, culture may or may not play a role, depending on the scale of the implementation, which traits the culture has, and so forth.
However, if an organization’s very survival is threatened by digital disruption, then it may require a full transformation of the business.
Reinventing the business from the ground up, in other words, may be the only choice.
In such a situation, the organization may have to reevaluate and alter every aspect of its business, including the culture.
As one might imagine, organizational transformations can be very difficult, which is why strong change leadership is so essential.
Change Leadership vs. Change Management
Change management professionals plan, strategize, execute, and manage organizational change projects.
They will also work closely with business leaders to design and plan organizational transformations, when necessary.
However, change management should always be accompanied by strong leadership.
Change leaders are professionals who actually spearhead and drive a change forward.
They are responsible for duties such as:
- Acting as a role model for change, by embodying the change and setting an example for others to follow
- Envisioning the change and communicating that vision to other stakeholders and participants
- Working with change managers and senior managers to develop cohesive strategies for change
The duties of a change leader will often depend on the leader in question – some leaders may adopt more duties than others.
Generally, the more involved the change leader, the better the results of the change program.
In organizational transformation, which involves everything from cultural changes to process changes, effective change leadership becomes even more important.
The Role of Transformational Leadership and Organizational Culture in Large-Scale Transformations
Cultural changes, as mentioned, are often inherent with organizational transformations.
After all, a business is reinventing itself from the ground up – it should be no surprise that this reinvention includes a reformulation of existing assumptions, beliefs, and values.
Cultural change is discussed frequently, because many professionals recognize that culture can affect organizational performance, change, and transformation.
For instance, certain traits are more conducive to change: innovation, learning, and adaptability are desirable traits to have during times of change.
For that reason, leaders certainly should manage organizational culture changes during any transformation.
That is, they should:
- Understand the role that culture plays
- Envision and embody the desired culture
- Communicate this culture to employees and lead cultural shifts
However, transformation leaders should balance their priorities carefully and focus on the primary aims of the transformation.
If leaders focus too much on culture, then they can end up losing sight of the true objectives behind a transformation, such as performance improvements.
Organizational culture is certainly important and can influence the outcome of a transformation project.
However, cultural change should never be a primary objective.
If cultural change is on the agenda, then it should always be secondary to the primary aims that it supports.