Corporate culture is the self-reinforcing web of beliefs, practices, patterns, and behaviors that become “the way things are done around here.” Leaders’ own conscious and unconscious beliefs drive behaviors, and repeated behaviors become cultural norms.
That’s why changing a long-established organizational culture is so tough. But when the business landscape radically changes, culture must change, too.
In an effort to better understand when and how corporate cultures change, CCL and corporate leaders surveyed a group of global VPs and directors in HR, Learning & Development, Leadership, and Talent Management.
The results were telling. As organizations adapt in the face of change, employees need strong leaders who can clearly communicate the new direction, align the company’s resources, and get commitment from everyone involved.
Why do companies change their culture? According to the survey results, the 3 biggest drivers of cultural transformation are:
- Internal redefinition of the company’s business model, goals, or performance levels;
- Maintaining a market position under intense pressure; and
- Technology trends.
Almost half of respondents point to their CEO’s new business model as a cultural transformation driver. “When we work with C-suite executives and with senior teams in our organizational practice, we often hear concerns about the disconnections between the current organizational culture and the needed culture to implement the future-proof strategy,” our COO David Altman says.
“Owners” Versus “Renters”
As organizations seek to adapt to changing times, senior executives realize they can’t rely on change through simple restructuring and re-engineering. Instead, they need strong corporate cultures that support efficiency, innovation, and agility to navigate the turbulent business landscape.
And for those corporate cultures to take effect, they need buy-in from employees willing to assume ownership.
“While developing a future-proof strategy is challenging, it’s even more challenging to build an organization-wide leadership culture that can quickly and effectively implement and adapt the strategy in a rapidly changing business climate,” Altman says.
‘’You potentially have an organization filled with ‘renters’ who don’t see themselves as responsible for the success of the organization, as opposed to ‘owners.’ If you have people throughout the organization with an ownership mentality, the odds of success go up dramatically.”
“Owners” take responsibility for their team and organization, signaling to colleagues and stakeholders their commitment. And all it takes to be an owner is to act like one.
Leading Through Change Fatigue
One of the biggest challenges blocking culture change is often a general feeling of resistance to organizational change — a.k.a. “change fatigue.” Similarly, it is not unusual to see similar resistance from managers, the senior team, and staff, especially when the business climate is changing rapidly and organizations are launching many change efforts in response, because change has a cumulative effect and can drain your reserves.
Leaders often have their heads down and worry about the changes that are constantly buffeting their organization, but they aren’t conveying it to their employees in a way that would allow them to be more resilient.
The importance and value of leadership training and coaching came out clearly in the survey results. A resounding 81% rated “leadership coaching and mentoring” as highly-to-somewhat effective in implementing cultural transformation; 84% also rated “leadership and staff training” as highly to-somewhat-effective. The message is clear: Leadership matters most.
Our perspective is that leadership takes direction, alignment, and commitment (DAC).
“Whether you’re in a command-and-control, hierarchical organization or one that is decentralized, if you see evidence of direction, alignment, and commitment, then leadership is happening,” Altman explains. “When you don’t have high levels of either of those 3 things, then there’s a leadership gap, and many organizations struggle with that. An organization might have direction and commitment — everyone knows where they are going and are pulling together to achieve it — but the processes and the systems and the way the organization is set up is chaotic.”
According to Altman, in that instance, it doesn’t matter how clear the direction and commitment are if a lack of alignment is preventing you from getting there.
To Change Corporate Culture, Start With Baby Steps
Cultural transformation is most easily achieved through small, incremental behavioral changes. That’s because bold, audacious goals are often perceived as daunting and unachievable. They can also be viewed as overly simplistic and too broad to guide day-to-day goal achievement behaviors.
For most organizations, this type of gradual change is the norm. When respondents were asked to best describe their cultural transformation initiatives, 57% reported initiatives strengthening, deepening, or refining the organization’s existing culture.
“When leaders focus only on large-scale, transformational change, they run the risk of paralyzing people from taking any action,” says Altman. “Instead, if they create opportunities for small wins, in which tangible progress is made day-by-day and month-by-month, the accumulation of such progress ends up being large-scale change.”
Altman uses a military strategy analogy to explain: “Avoid always displaying a frontal assault on transformational change. Consider flanking maneuvers as a way around the obstacles of pushing through transformational change in one fell swoop.”
Breaking down bold goals into component parts in which the sum of the parts is greater than the whole can be a more sustainable way to consistently address transformational changes.
Learn more about rebooting your culture in our Trends Report, Talent Reimagined: 7 Emerging Trends for Transformative Leaders.
And build a culture that makes strategy happen with our Organizational Leadership Culture Change service.