Why culture change in organisations might be necessary.
Sometimes culture change in organisations is inevitable. There can be many reasons why an organisation might need to change its culture.
Often it’s due to business growth, where there are periods of rapid hiring, with companies doubling in size in little more than a year or perhaps there’s been an investment round which has enabled the business to expand its capabilities or perhaps pivot its offering.
Inorganic growth is another reason for culture change in organisations, in particular a merger or acquisition. It might be that two companies have merged, a parent company has acquired a smaller brand, or perhaps a parent company is expanding into new markets and setting up a specialist division. These are often tense times for businesses due to the high ‘failure’ rate – but getting culture right can actually be a recipe for success.
A company may always wish to address its culture ahead of an IPO, as an enormous amount of due diligence is enacted across the business. Culture has big impact on employees, their experience, and performance which may all be taken into consideration by prospective shareholders.
And a problem that’s been more evident in recent years is that the culture has never been properly defined. Many start-ups are set with a few values or a strong mission, but often these get neglected in the early years as attention is firmly placed on efficiently running the business, securing investment, and getting product market fit right.
Getting culture right has never been more important. Organisations that succeed in connecting employees to their culture can increase employee performance by up to 37% and retention by up to 36%.
Who is involved in company culture change?
An organisation can change its culture unless the right people are actively involved. You’ll need to get your employees bought in early to bring them along the journey. Their input is absolutely vital in understanding the strengths and weaknesses of your current culture, and where you want it to go. They are going to be the people who will bring the new culture to life.
Middle managers are often unsung heroes, and culture change is no different. They can have an incredible, transformative impact on their team if they can empower them to illicit the right behaviours and ways of working that you want your culture to have, and ultimately have a positive impact on performance too.
Many have tried and failed at a ‘bottom-up’ approach to company-wide transformations. 32% of employees believe the behaviour of senior leaders influences company culture the most, closely followed by managers.
Without leadership, the change will lack intention and direction. Having leadership bought in will also ensure you’re able to get a sense of how culture is currently affecting the bottom line, and how it could have a more positive impact in future.
Not every CEO understands the value of culture, and at times they need convincing. But get them bought in as early as possible. It can make a real difference in aligning both the board and leadership team if the CEO can see the value of a culture change and the potential it can have…..
How to change an organisation’s culture.
Changing an organisation’s culture doesn’t happen overnight. It can take from a few months to up to a year for the change to be successfully implemented, embedded and be having the desired impact. There are varying culture change models that an organisation can use, but the most effective is a three-stage methodology:
Insight – this is the first and most critical step in the process, it’s about working out what your culture is today, what the culture of the future needs to be, and what changes you need to make to get there. This stage involves a heady mix of data points and really getting under the skin of the inhibitors and enablers of your culture and business performance.
Design – once you know where you’re going, you need to work out how to get there. Designing the future culture the business requires is a highly collaborative process, that needs to involve every corner and level of the business. This isn’t just about an internal rebrand either, you’ll want to consider tools, process, compliance, ways of working, performance metrics, and behaviours too.
Embed – you’re going to need a lot more than a shiny launch event to embed your culture. You want the change to stick, and be sustainable so that it has a lasting impact and sets you in good stead for the future. This means you need to consider how your people can engage with the culture on a day-to-day basis through things such as working practices, tools, and communication through to compliant ways of working and thinking about individual and team contribution too. Team-based embedding is a great way to do this.
What you need to change culture in the workplace.
Oh, and before you go about changing your culture, there are a few more things you need to know…
Get comfortable with being uncomfortable. The insight phase of the change will highlight some home truths around what is and isn’t working and the general sentiment of your workforce. Whilst this is all done anonymously and constructively, it’ll be an eye-opening experience for the business and it will ultimately bring about accelerated change in some areas, for the better.
Bring people on the journey. It’s difficult for people to buy into something if they feel excluded. Getting them to understand why you’re going on this journey, and what it will mean for the business and to them personally will get them on side.
Be prepared to flex your creative muscles. Some of the most impressive and impactful culture changes come about by using the creativity of the existing team (particularly in house design and brand teams). Everyone has the ability to come up with creative ideas, they just might need a little nudge or inspiration.
Don’t even think about changing if you’re trying to tick a box. Culture isn’t a tick box exercise.
Toxic work culture was found to be the number one predictor of attrition. It’s 10.4 times more likely than low compensation to contribute to employee turnover. Meaningful culture change creates a meaningful impact and a legacy for business.
Are you ready to change the culture in your organisation?