Culture Transformation… the Holy Grail or Unholy Fail?
In 2014, ‘culture’ was Merriam-Webster’s ‘Word of the Year’. Since then the momentum around culture as a significant business management concern has continued to grow.
A short browse through Harvard Business Review, Forbes, or any business journal yields articles examining the influences, effects and importance of culture in organisational life.
A recent study from academics at Duke and Columbia Universities interviewd 1,384 senior executives. Over 50% believe corporate culture is a top three driver of firm value, 92% believe improving their culture would improve their firm’s value, only 16% belive their culture is where it should be and 69% blame under investment in culture for lack of an effective culture. 1
Culture is increasingly being identified as an important attribute of organisational success. Elite sporting teams spruik their culture to lure talented recruits. Education providers from Early Learning through to Tertiary Institutions promote themselves based on their culture, often drawing a direct link between their culture and academic results. Smart businesses do the same thing. They recognise that their culture becomes a critical part of the value proposition that keeps good people committed and engaged.
In an effort to create competitive advantage, build engagement, lift performance, or simply address unacceptable behavior in the workplace, many organisations embark on culture change activities. The results are often underwhelming. Initial visions of a flourishing utopia give in to the reality that change is hard. As energy wanes, the transformation effort stalls and culture change is relgated along with other management fads as something we tried once.
Other companies however, have great success and triumphantly proclaim, “Culture is everything! Without the right culture you won’t be successful.” 2 In other words… Organisational Culture is the Holy Grail of competitive advantage.
Change is hard. And, culture transformation is possible. If you’d prefer to be celebrating successful culture change rather than frustratingly stuck in an organisational slump, here are five key mistakes you’ll need to avoid so your culture change project can succeed…
1. Ignoring your culture’s historic roots
Your history matters. Just as our personal experience shapes many of our views, so our collective history shapes the stories and beliefs embeded in our organisations. The successes, the failures, the significant moments – none more important than the organisation’s beginnings – all contribute to the construction of an identity which shapes culture. Initiatives to drive change often fail by trying to oppose rather than utilize the organisation’s corporate history.
This is particularly difficult for leaders who are new to the organisation and attempt to drive cultural change (often times aiming to replicate the culture from their previous organisations). It is a great, and necessary skill, to be able to weave the organisation’s history into the vision for the future.
2. Attacking behaviour rather than addressing belief
For all its importance, defining an organisation’s culture is remarkably tricky. Survey instruments may provide statistical comparisons between organisations and provide helpful categories and frameworks for deeper analysis, but defining culture is a much more nuanced task than finding an appropriate label.
Instead of thinking of simple labels and categories to define culture, we need to understand that organisational culture is the normalized behavioral expression of a set underlying, common beliefs. The behaviors are what we observe, but it’s the beliefs that shape what is accepted or unaccepted, rewarded or rebuked in a cultural system. Real and lasting change won’t be achieved until the belief structures are understood, evaluated and remade in alignment with the vision of the preferred future.
3. Fatally misaligning strategy and culture
“Culture eats strategy for breakfast.” This popular business axiom is often quoted to illustrate the power of culture to derail strategy efforts. The issue however is not the relative strength of each aspect of the organisational dynamics. The primary issue is whether there is alignment between the culture and the strategy.
Importantly, culture should serve the strategy. Sometimes the strategic aspirations of organisations are simply too grand to be supported by the current culture. At other times, preferred cultural changes are ill-advised and fundamentally incompatible with the organisation’s objectives, at least in the short term. Cultural ambitions may be couched in vague and idealistic terms – ‘innovative’, ‘collaborative’, ‘agile’, ‘risk-taking’, ‘flexibility’ – yet the organisation cannot either fully utilize or support such an approach. Planning and managing culture can’t be done in isolation from strategy and the idealism and imagining phase of the culture planning process must be tempered with clear pragmatism around the organisation’s needs and resources.
4. Failing to identify and address Covert Values
There’s a difference between Overt and Covert Values. While an organisation may make a concerted effort to describe and highlight their values, these ‘Overt Values’ will always be subjugated to a set of ‘Covert Values’. Covert values can also be thought of as the ‘unwritten rules’ that guide and influence behavior. No team, group or organisation is a blank canvas and listening and observing to understand and identify the underlying Covert Values – and address them – is an essential part of managing culture.
5. Leadership failing to pay the price of change
Of the five reasons listed, this is the most critical. Too often, leaders see themselves as beyond the culture rather than integral pieces of the culture. Leading a culture change process is difficult, relentless work. The very nature of culture change involves challenging beliefs and asking people to change their view of the world and their habits. It is not enough for leadership to merely model the new culture – they also need to demonstrate they are willing to pay the price of change. The leaders also need to examine and have their beliefs challenged. They too, need to demonstrate a willingness to behave differently.
The commitment required for leading a culture change can’t be outsourced. External consultants and coaches can be invaluable partners for directing and managing the change, but the champions and drivers of the change must be the C-suite team. If their will isn’t in it, culture change is defeated before it even starts.
Understanding the system that drives your culture
Organisations operate via a complex and dynamic web of tasks and rules, relationships and beliefs, structures and systems. They are influenced by external forces such as market conditions and regulatory frameworks but ultimately they are shaped by internal leadership.
Effective culture change occurs when alignment between the dynamic elements of organisational life is reached. An honest and comprehensive assessment of both the current and desired organisational culture is required. This takes insightful diagnosis, wise navigation to avoid the five key mistakes and courageous leadership.
Too often, culture is only discussed as an obstacle in organisational life. Yet managing the culture should be a central part of the brief for leaders at every level, including the Board. Building and sustaining an effective culture at team, department, organisational and governance levels takes courageous leaders who will embrace the opportunity to create a better organisation and brighter future. Such leaders will always be in demand as will the teams and organisations they lead.
Establishing a strong Corporate Culture will align and govern your organisation for sustained success. Virtuity Consulting Group can help you make it happen.
Contact Virtuity Consulting Group today to start your journey towards a transformed Corporate Culture for sustained success.
- John R. Graham et al., “Corporate Culture: Evidence from the Field” (2017).
- Tess Bennett and Andrew Birmingham, “Change Is Hard. Here’s How to Build a Culture That Delivers Your Digital Transformation,” Which-50, April 16, 2018, Online edition, accessed May 29, 2018, which-50.com/cover-story-change-is-hard-heres-how-to-build-a-culture-that-delivers-your-digital-transformation