Culture is critically important to business success worldwide, however, there is a clear disparity between the way companies view culture and the way they treat it, and many executives believe a major overhaul of their organisational culture is required, according to recent research.
While 60 per cent of executives globally believe culture is more important than the company’s strategy or operating model, 51 per cent believe their organisation is in need of a major culture overhaul and 96 per cent said some form of culture change is needed within their organisation.
The survey, which was conducted by the Katzenbach Center at Booz & Company and took in more than 2200 executives around the world, also found that 45 per cent do not think their culture is being effectively managed.
Sustaining culture change
“In my view, the most significant finding from the survey is that organisations aren’t leveraging elements of their existing culture to sustain change,” said DeAnne Aguirre, a senior partner at Booz & Company.
“We clearly saw that a much more holistic approach, one that leverages assets like informal networks and storytelling, is required if companies want to see the effects of their change programs stand the test of time.”
Survey findings also suggest strong correlations between the success of change programs and the leveraging (or lack of it) of culture as a driving force behind the efforts. Of those surveyed, only about half said the results of change programs were sustained over time.
In fact, the use of cultural levers, such as activation of informal peer networks and the linking of change to organisational pride, made for transformation initiatives that were twice as likely to succeed as those that left culture out of the equation.
The research found that 48 per cent of executives do not think they have the capabilities required to deliver lasting change, while scepticism due to past failed efforts (experienced by 57 per of survey participants) was the number one reason for resistance to change.
Overcoming culture change myths
Most business leaders know that a high-performing culture is critical to their organisation’s success, however, as the results above demonstrate, many executives struggle with culture change and find it an elusive and drawn-out process with hard-to-predict results.
When it comes to sustainable and meaningful culture change, this process is not only feasible but, when done right, also achievable in a reasonably short period of time, according to Boston Consulting Group (BCG).
This is significant because a focus on culture is imperative in a number of circumstances. Whether an organisation is undergoing a major transformation or simply needs to improve operating performance, addressing culture is critical in order to achieve and sustain success.
A recent BCG report, High Performance Culture: Getting It, Keeping It, debunked four common myths about culture and change and outlined a systematic approach to culture change based on the answers to four questions: What culture do we need? What culture do we have – and why? What aspects of the organisational context should we change to get the behaviours we seek? and How do we make change happen?
1. What culture do we need? One widespread myth is that there is one universally “good”. Certainly, there are common attributes that every organisation should seek, such as employees who care about their work. But in reality, a high-performance culture requires more than a standard set of such attributes.
Every high-performance shares two characteristics: employees who are fully engaged and individuals and teams that exhibit behaviours specifically aligned with the organisation’s strategy and goals. To identify what an organisation needs, leaders should analyse their strategy to determine the appropriate level of employee engagement and the behaviours that best support it.
2. What culture do we have – and why? Another myth is that culture is chiefly determined by mindsets. In reality, culture is primarily determined by organisational context – the environment in which people operate. This environment is shaped by a broad range of factors, from how the organisation is designed to the nature of performance reviews. To understand why it is the way it is, leaders should analyse the context to discover the roots of employee behaviour.
“No company can expect the desired behaviours to emerge when everything about the context encourages the opposite behaviours,” said Jim Hemerling, a BCG senior partner and co-author of the report.
3. What aspects of the organisational context should we change to get the behaviours we seek? Yet another myth is that it is hard to know how and where to intervene in order to change employees’ behaviour. In reality, learning what to change is logical and feasible.
With a sound culture diagnosis in hand (and techniques drawn from social and behavioural psychology), organisations can design interventions to activate seven context levers, among them: leadership practices, people and development processes, and informal interactions.
4. How do we make change happen? The fourth common myth is that changing behaviour and culture is a gamble. In reality, it is a predictable process that can be orchestrated to achieve the desired results.
Several practices can ensure that an organisation’s interventions will help achieve the intended results. These range from enlisting change champions and running pilot programs to developing coordinated communication plans and rigorously monitoring results.
Like any major change initiative, culture change requires a disciplined change-management effort. “A robust change-management program helps keep expectations fresh, communicate progress, and demonstrate that leaders are committed,” said Julie Kilmann, a senior knowledge expert at BCG and co-author of the report.