An organization’s main drivers are often profitability and longevity. Companies need both to produce excellent products and services to solve their clients’ problems. Established and rising companies alike undergo Cultural Transformation to achieve that goal.
Transforming an organization is the process that enables change from an organization’s current state to a better-defined, higher-performing future.
Transforming an organization’s culture involves changing employee mindset and behaviors to enable better performance and alignment with company values.
If done correctly, this change can drive talent retention and new talent acquisition. In this article, you will learn how your organization can benefit from Cultural Transformation.
This change can ultimately reshape your work environment to improve performance, improve talent retention, and create a workplace that facilitates innovation and collaboration.
What is Culture?
Our understanding of the word culture includes common elements such as flags, food, spoken languages, customs, and traditions shared among a particular group.
Although straightforward, we want to be more specific when discussing an organization’s culture.
Michael Watkins, professor at IMD business school, states: “[…] without a reasonable definition (or definitions) of culture, we cannot hope to understand its connection[s] to other key elements of the organization, such as structure and incentive systems.”
In his article “What is Organizational Culture? And Why Should We Care?” he uses seven crowd-sourced descriptions as parting points to explain this concept.
To keep this article short, we’ll use a concise definition.
Culture, in the context of companies and organizations, can be defined as the shared goals, values, principles, and ways of working practiced between its members.
Even if employees switch teams, these elements should remain constant.
To do so, the culture must be engrained in the mindset and behaviors of members across your organization and throughout hierarchical tiers.
Strong, positive organizational culture attributes include:
- Positive working environment
- Recognition of employee efforts and contributions
- Opportunities and challenges for growth and learning
- Respect for each other
- Ways and methods of communication and escalation
What is cultural transformation?
Organizations globally have grown in size and complexity; therefore, they can have both a primary culture and sub-cultures.
The subcultures can be present at a location level (contrasting between different departments and business units) and at a global level (contrasting between countries and even within regions of one country).
What happens when teams within your company have different cultures?
Or when your team’s behavior does not reflect the organization’s mission, vision, values, and expected behaviors? You probably need a Cultural Transformation.
A cultural transformation is a process of changing how an organization thinks and behaves to achieve specific goals. One constant goal is to pursue a culture where all employees emulate the company’s values and support the organization’s vision.
Cultural transformation at micro and macro
We can therefore look at Cultural Transformation in two scales.
At a micro-level within the context of teams and at the macro-level where leaders look at all aspects, locations, and members of the organization.
Organizational change is often needed to deal with new technologies, processes, mergers and acquisitions, restructuring, new strategies, and globalization, among others.
One use case for organizational transformation is companies transitioning from the startup stage to established organizations and R&D companies starting to commercially manufacture and ship products.
LaSalle Group CEO, Yolanda Lassalle, states that “if you change processes to become more agile and efficient, but the people still think in a complex way, the people will probably go back to the way they used to do things. A way that makes them feel safe and that is familiar- it’s how they usually perform. This is how they felt successful.”
Transforming an organization requires changed mindsets, behaviors, and ways of thinking. It also requires clearly defined processes and expectations.
While change occurs, individuals must adjust to new processes and ways of getting things done. It is essential that managers continuously discuss the ideal outcomes and benefits.
This small gesture will remind their teams how their new ways of thinking and working will improve organizational performance and benefit them and the business.
Cultural transformation from theory to practice
A cultural transformation can have a lasting effect on your company’s way of building and managing relationships among its members and with the outside world.
If “efficiency,” for example, becomes a new core value within the organization, the transformation process should define what that means for its people, processes, and systems.
With a precise definition, the organization can develop the mindset, and skills employees need to uphold this new value and way of thinking.
In a major long-term study , companies with the best corporate cultures, encouraging all-around leadership initiatives, and highly appreciated employees, customers, and owners grew 682 percent in revenue.
During the same evaluation period — 11 years — companies without a thriving company culture grew only 166 percent in revenue. A strongly defined, positive company culture can translate into up to 4x revenue growth.
Because managing change is always a sensitive topic, many organizations hire external consultants.
Subject matter experts with prior experience driving change help leaders and talent management teams throughout their transformation process and objectives.
A well-defined and managed change should positively impact all aspects of an organization, including the quality of products and services rendered to clients.
Transforming an organization’s culture requires a wide range of capabilities, including change management, organizational development, people development (i.e., Upskilling), organizational structure design, and communication design & deployment.
Does my organization need a cultural transformation?
In the same way, we design transformation processes to achieve a high-performing, healthy organizational culture; leaders with specific behaviors can slowly change your organization’s culture.
We have outlined five potential scenarios that can require a cultural transformation:
1. Toxic/Unhealthy work environment
A toxic work environment where people are unhappy, anxious and where “leaves of absence” are commonplace.
2. Multiple, contrasting organizational cultures
Though most common after mergers and acquisitions , this is also a common issue in multi-national organizations and organizations.
At a more micro level, this can even happen within departments. For example, your sales department is customer-centric, while your Customer Service team is more focused on following rules than helping clients and internal team members.
3. When you are not meeting business goals
If you have a team or business unit that continuously fails to deliver business goals, you might have a cultural challenge. Is top leadership disconnected from the team and setting unrealistic expectations? Or is there no accountability and your team needs to execute business strategies?
4. High Turnover
If people quit in dozens or scores, do not blame it on The Great Resignation or any of its other names. Though this can definitely be a factor, people will generally stay in teams where they feel comfortable and their work is acknowledged, granted they have a reasonable salary.
5. Leader decision-making not aligned with company vision, mission & goals
Could your business use a new outlook? Will a Cultural Transformation boost your company’s success?
Benefits of Cultural Transformation:
Transforming your organization’s culture will translate into many benefits specific to your organization, so we strongly suggest that you are intentional when outlining goals and methodologies.
1. Increased Productivity and Efficiency
When a company’s culture and objectives are aligned, activities and strategies begin to fall into place. People are more determined to work. People understand how the company should work and the importance of the work they do.
In return, employees understand the value of their tasks and find purpose in their work. This new direction also stresses the importance of performing quality work.
3. Increase employee satisfaction
A key driver of high-performance organizations is trust. Integrating “trust” as a core element of your cultural transformation can foster a sense of community and collaboration among employees. This translates into more effective and efficient teamwork and problem-solving.
4. Enhanced innovation:
Global competition and business challenges have affected virtually every organization’s strategic plan. A culture encouraging creativity, risk-taking, and experimentation can lead to increased innovation and creative problem-solving.
5. Better customer service
As we mentioned, transformations can be achieved at both a macro and micro level. Almost all teams have an internal or external client, so better customer service is something you will want to pursue.
Conclusion
Ultimately, people that get the job done are the foundation for a company’s success.
When an organization’s values, principles, and objectives are aligned, team members find the enthusiasm to move forward with their work.
The process of Cultural Transformation designs and creates a workplace environment where every individual is valued and focused on upholding a company’s vision, mission, and way of working.
Could you envision a positive workplace environment that attracts and retains the talent you need to succeed?
