Everyone seems to have a perspective on how organizations need to respond to the rapid change we are witnessing today. Forbes contributor Jacob Morgan, for example, believes that companies need to act more like laboratories and less like factories: “Factories are notorious for being linear and process centric,” he argues, whereas laboratories “use data to make informed decisions, and they are continuously experimenting.”

Or the influential UK business owner John Timpson, who writes in his column in the Telegraph that large businesses build in too many layers of management, “which can become remote from the main front line purpose of the company… The major challenge of a big company is to keep the original culture.”

Timpson comments on seeing a map of Peterborough from 1967 with the active businesses of that time, and noting that only one company remained operating today: Marks & Spencer. All the other famous names such as John Collier, Woolworths, and Freeman, Hardy and Willis, had moved on.

In fact, you don’t need to go as far back as 1967. More than 50% of the Fortune 500 companies from the year 2000 don’t exist anymore. [1]

In our recent cultural transformation series of executive interviews, BNP Paribas — the global investment bank — explained that the secret to longevity is continual transformation. A recent annual BNP Paribas engagement survey gave some cause for concern.

“Our organization was perceived as being too hierarchical, and too centralized,” explained Hans Vanbets, Head of HR at BNP Paribas International Retail Banking. “If we wanted to move forward and keep our strong position in the market, then we needed to adapt.”

A successful cultural transformation journey — which now needs to incorporate digitalization, talent development, and sharing best practices across global borders — should not be limited to only a bottom-up or a top-down approach, Vanbets said.

Instead he sees it as “an elevator” approach: “On one hand, you move things up from the floor and different management levels of the organization, and on the other hand you move things down from the executive committee.”

 

Innovation in Cultural Transformation

The lesson from BNP Paribas is that to identify your challenges, issues, and solutions, “You need to slice your organization in such a way as you want to bring the right people around the table.” Vanbets added.

Cultural transformation still needs to be initiated from the top, but a broad range of talents need to be very quickly involved.

Cultural transformation needs to drive innovation, too — it’s the holy grail for all modern businesses.

Peter Alkema, CIO of the South African business FNB, for example, writes in praise of start-ups who are “disrupting the way industries operate… They explore and use new technologies to disrupt while traditional enterprises are defending market share by adopting innovative practices to drive new business models.”

Innovation within large organizations, he contends, “requires employees to understand the business, and at the same time embrace the organizations culture, values and ethos. Leadership needs to drive this.”

Our Leading Insights Study finds that rapid organizational change is the No. 2 leadership development challenge in the next 2 to 5 years. But if you try to instill culture change as a quick fix, Vanbets warned that “a couple of weeks later it is forgotten.”

“If you do it over a longer period, in a very recurrent and consistent way, with people who are the ambassadors of change and innovation, then it drills down much more profoundly in your organization,” he said.

Strengthening the connection between junior talented employees and senior leaders has undoubtedly been key to BNP Paribas’s transformation.

“It is extremely important that your senior team is a platform for change and innovation, but it is also important that you boost their solutions by bringing in youngsters and talent into their thinking process,” Vanbets said. “Again, it’s the elevator — it is up and down.”

[1] When Digital Disruption Strikes – Capgemini Consulting, 2014

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