The need for cultural change is often neglected in transformation initiatives, and this is one of the factors known to contribute to the high rates of transformation project failures. Achieving sustained changes in organizational culture requires a holistic approach targeted at employees as well the organizational systems that shape the ways they act and behave at work.

At employee level, a two-stage process is needed. First, the new business strategy or other changes must be communicated clearly to staff throughout the organization using a range of formal and informal methods and in ways that are tailored to their information needs and perspectives. Second, team meetings, staff workshops or other forums should be used to involve employees directly in translating the new strategy or goals to their own areas of work. This two-stage approach will help promote the development of new norms that will drive the types of behaviours necessary to achieve the new direction.

However, individual-level initiatives are not enough to promote sustainable culture change; over time, culture becomes institutionalized and ingrained in the fabric of the organization, shaping its structure and systems and in turn being reinforced by these. In particular, seven important “change shaping” levers need to be realigned with the desired business objectives in order to promote the necessary cultural changes: leadership; organizational structure; staffing and deployment; competencies; performance management; compensation, benefits and rewards and communications.

Cultural change, like other forms of transformation, requires both art and science. The science of transformation, such as project management tools and techniques and specialist expertise of functional areas of work, is important when “diagnosing” the organization to identify what cultural changes are necessary, and in the design and development of specific initiatives and plans for achieving these. But the successful implementation of a culture change initiative requires the ability to effectively engage and involve a variety of stakeholders using art skills such as leadership, communication skills and interpersonal communications. A preliminary readiness assessment can be helpful for identifying whether the organization has the right art and science skills necessary to successfully complete a cultural transformation initiative so that steps can be taken to fill any gaps.

The Importance of Culture Change in Organizational Transformation

One of the main barriers to successful organizational transformation is the culture of the workplace; the need for cultural change is often neglected in transformation initiatives, and this is one of the factors known to contribute to the high rates of transformation project failures.

Over time, organizational cultures generally evolve along with business strategy, and they become mutually reinforcing. The problem comes when the organizational leadership decides to implement a new strategy or change of direction that requires changes to the way people think and act at work.

While a new strategy can in principle be adopted overnight, culture change takes considerably more time and effort and the continued existence of older attitudes and behaviour patterns can seriously weaken the ability to implement the desired new direction.

What is Organizational Culture?

Organizational culture basically consists of the core values, norms and acceptable or expected behaviours that influence how people go about their jobs and interact with one another in that particular workplace. While core values represent the essence of an organization’s being, and ideally remain constant over time, norms and behaviours are the aspects of organizational culture that must be reviewed and reshaped as necessary to ensure they support the desired strategy and goals.

Norms can be defined as the informal “rules” which govern patterns of behaviours and interaction between organizational members. Behaviours are the outward manifestation of organizational culture, through which values and norms are expressed in actions that have a direct impact on the achievement of goals. The objective of cultural change is to adapt norms and behaviours, within the scope of the organization’s core values, to bring these into alignment with a new business strategy or direction.

Employee Level Culture Change

There is a common tendency for people to resist change; overcoming this resistance and achieving sustained changes in organizational culture requires a holistic approach targeted at employees as well the organizational systems that shape the ways they act and behave at work.

At employee level, a two-stage process is needed. First, the new business strategy or other changes must be communicated clearly to staff throughout the organization using a range of formal and informal methods and in ways that are tailored to their information needs and perspectives.

Second, team meetings, staff workshops or other forums should be used to involve employees directly in translating the new strategy or goals to their own areas of work. This two-stage approach will help promote the development of new norms that will drive the types of behaviours necessary to achieve the new direction.

Organizational Level Culture Change

However, individual-level initiatives are not enough to promote sustainable culture change; over time, culture becomes institutionalized and ingrained in the very fabric of the organization, shaping its structure and systems and in turn being reinforced by these. In particular, seven “change shaping” levers can be identified which reinforce organizational culture, and which need to be realigned with a new strategy in order to promote positive cultural changes:

Leadership System: The organization must be able to select, recruit or develop leaders who consistently model the desired new norms and behaviours and are effective in managing the people-related aspects of change.

Organizational Structure: To promote effective cultural change, authorities and accountabilities must be consistent and aligned with each other, and with the desired behaviours and norms.

Staffing and Deployment: There is a need to ensure that job roles are occupied by individuals with the right skill sets and behaviours to bring about the required changes.

Organizational Competencies: Since employees and managers will often need to learn new skills when an organization is transformed, a new competency development strategy will often be needed.

Performance Management: This provides the framework within which employees can be guided towards the “right” behaviours through a system involving performance planning and goal setting, regular appraisal, and coaching.

Compensation, Benefits and Rewards: This system plays rewarding the desired behaviours or alternatively penalizing individuals who do not demonstrate this by withholding associated rewards and benefits.

Communications: A systematic communications system tailored to employees in different functional or other areas of the organization will help promote and sustain group-level changes in norms and behaviours.

The Art and Science of Cultural Transformation

Cultural change, like other forms of transformation, requires both art and science. Many transformation projects fail because of an over-emphasis on the “science”, and a lack of attention to the “art”

The science of transformation, such as project management tools and techniques and specialist expertise of functional areas of work, is important when “diagnosing” the organization to identify what cultural changes are necessary, and in the design and development of specific initiatives and plans for achieving these changes.

But the successful implementation of a culture change initiative requires the ability to effectively engage and involve a variety of stakeholders such as employees, customers and suppliers, and this requires art, such as leadership, communication skills and interpersonal skills.

Stages of Cultural Transformation

At both employee and organizational levels, a cultural transformation initiative involves three distinct stages, requiring different types of art and science skills.

1. Organizational Readiness Assessment: This is an important for identifying whether the organization is adequately prepared to embark on a cultural transformation initiative. For example, a project management assessment system can be used to explore change readiness in terms of an organization’s project management art and science skills. Measures can then be taken as necessary to develop existing staff or acquire additional expertise through recruitment or other strategies such as sub-contracting areas of work.

2. Diagnosis: At this stage, there is a need to review the existing organizational culture to identify and understand how it influences strategy, and to identify what changes are needed to norms, behaviours and organizational systems to support the new strategy. Tools are available, for example, for use in assessing the current cultural impact of the seven systemic change-shaping levers and identifying what needs to be done to realign these with the desired new business strategy or goals.

3. Design: This stage involves determining the most appropriate methods and strategies for use in promoting new norms and behaviours and modifying organizational systems; developing an overall cultural transformation plan, and designing specific tools and initiatives for its implementation.

4. Implementation: This is the process of applying the tools, techniques and strategies developed in the design stage, in ways that secure the engagement and involvement of organizational members and reduce their resistance to the changes.

Assessing Organizational Readiness

This paper provides a recommended systematic and holistic model for approaching organizational culture change, based on the application of art and science. Since misaligned culture is one of the biggest risks to the successful achievement of organizational transformations, most firms that are embarking on a major change initiative will benefit considerably from an initial investment in an organizational change readiness assessment and cultural change initiative.