Culture’s Role in Enabling Organisational Change

For all the money and effort that go into corporate change initiatives, they have a decidedly mixed success rate. Among the biggest obstacles to successful change are “change fatigue” (which occurs when workers are asked to follow through on too many changes at once) and a lack of the capabilities needed to make major changes last. Another problem is the tendency for management to exclude lower level employees in developing and executing the change plan.

Companies need to take a more holistic approach to change and to find ways to work with and within the organisation’s culture during change initiatives. This is not to say that culture-enabled transformation removes the need for formal change management processes or techniques. It doesn’t. But it does mean that leaders need to rethink how to drive and sustain change if they want to materially increase the success of their transformation programs.

WHY TRANSFORMATIONS TYPICALLY FALL SHORT

When they embark on transformation efforts, companies put their credibility and reputations on the line, not to mention a lot of financial capital. Are the effort and money well spent? A wide body of literature suggests that many change initiatives fail, typically in areas such as process improvement, cost reduction, digitization, and quality improvement. Even when they initially succeed, their benefits may not last.

Transformation efforts face three major obstacles. The first is “change fatigue,” adynamic that comes into play when employees feel they are being asked to make too many changes at once. The second obstacle relates to companies’ skill atdriving transformation and the third issue is the way transformation initiatives are selected, planned, and implemented by senior managers, without much input from lower level employees. This limits understanding and buy-in.

When employees are faced with too many change priorities, aren’t sure how to proceed, and aren’t even sure that an initiative is good for the organisation, they take a wait and see attitude, looking to their bosses for direction and to their co-workers for clues about which aspects matter the most. This sort of uncertainty, deep down in an organization, can keep a change initiative from gainingmomentum. (A later-stage obstacle to change comes in the form of the “boomerang effect,” in which initial changes start to fade when leadership stops paying attention and moves on to other priorities.)

Turning to culture, it is clear that people understand its importance. Still, culture doesn’t seem to be a priority when companies are trying to drive change, pinpointing culture’s place in successful change programs and its place in unsuccessful change programs reveals some striking correlations.

As an enabler of change, culture remains stubbornly under leveraged. Most business transformations are at least loosely based on an eight- step process first codified by John Kotter of Harvard Business School. In practice, many change programs disproportionately emphasise two of the levers he cites—communications and leadership alignment. Culture is the last step in Kotter’s formula, something that can be addressed only after new practices have taken hold and proven their value. These priorities need to be rethought. This is not to denigrate traditional change levers, including top-level diagnostics, organisational design, performance management, metrics, and incentives. Depending on the change initiative, these may all be crucial. But a change effort needs to lead with culture as part of a more holistic approach if a transformation program is to have the best possible chance of success. In particular, the change needs to draw on whatever positive cultural attributes are embedded in the organisation. It also needs to minimise any negative cultural attributes that might get in the way.

There are several levers that companies should employ as they use culture to lead transformation, or when they are trying to transform their own cultures. Among the most important are the following:

• Culture diagnostic: Before you can use culture in a transformation or change your culture, you need to know your culture’s strengths and weaknesses. Effectively tapping into the strengths can give your change initiative the momentum it needs to overcome obstacles.

• The “critical few” behaviours: Setting a small number of clear behavioural change goals, which we call the critical few, is a crucial way of showing workers what you want them to do differently. By focusing on only a few behaviours, you avoid a situation in which workers become overwhelmed and as a result do nothing, hoping the new requirements will just go away

• Employee pride and commitment: The odds of a successful transformation plummet when morale is bad. Companies must find ways to connect workers to something larger that they can believe in, including customer benefits or the satisfaction of beating a benchmark.

• Informal peer networks and motivators: Culture might start at the top, but it is reinforced at every level. Having a peer point out the benefits of change, instead of an executive or manager, is very powerful and leads to improved behaviours that continue even when nobody is looking.

Culture is not a shortcut to successful corporate change. Nor is culture led transformation less rigorous than more conventional types of transformation, it involves just as much time and effort. Culture led transformations require a fundamentally sound set of change objectives and discipline in the sense of setting priorities. Performing a culture diagnostic, identifying a critical few behaviours, capitalising on employee pride and commitment, and leveraging informal peer net- works are just a few of the ingredients in the change recipe.