• When to Change your Culture

    Every company has a culture. Your company’s culture is either helping you get the job done or holding you back. Culture matters.

    How is your culture working for your business? Is it time for a culture-shift?

    There are five situations in which you need to shift your culture.

    1. When you need to align your culture with strategy
    2. When your culture isn’t working (dysfunctional)
    3. When your core values become stale or out of date
    4. Continuous improvement
    5. After a merger or acquisition

    In previous blogs I have written about how to change your culture and how to build culture into your strategic planning cycle (the important place of culture in strategic planning). This blog is all about when to change your culture.

    Not Aligned with Vision & Strategy

    You should shift the culture of your organization when it is not aligned with ‎your mission, vision, strategy, or core values. Foster a culture that supports your strategic agenda.

    Culture is a true asset to your organization—part of your competitive advantage—when it’s aligned with your vision, strategy, and core values. Employee attitudes, behavior, values, focus, and mindset should pro-actively drive, reinforce, and sustain your vision and strategy.

    Obviously you will need to shift your culture whenever there is a significant change in ‎your mission, vision, strategy, or core values.

    Here is a simple example: If you are shifting your strategy from offering better service to being the low cost provider, you will need to shift your culture to support the new strategy. In this case, you will need to help your employees shift their daily focus: they need to spend less time thinking about improving customer service and more time thinking about efficiencies, costs, synergies, etc.

    Anytime you launch a major initiative, or shift your strategic emphasis, you can ask: Does our culture supports this? How can we anchor this in our culture to make it stick?

    Culture Not Working

    You should also shift the culture of your organization when it is not working, i.e., when it is toxic, dysfunctional, or simply ineffective—not adding value. Here are some dysfunctions we’ve all seen:

    • Lack of accountability, initiative, innovation, and continuous improvement
    • Poor communication, teamwork, and alignment
    • Low trust & respect; hidden agendas; egos, silos, and turf wars
    • Employees dependant and reactive versus empowered and proactive
    • Low employee morale, motivation, and effort
    • Employees careless, cynical, jaded, defensive, weary, or wary
    • Leaders not leading by example; poor ambassadors for the organization and its values

    These are very natural (human) responses to toxic culture—especially in large organizations in which people are treated like cogs in a machine.

    These dysfunctions escalate employee absenteeism and turnover, which are very expensive (see here). They are also devastating to productivity, work quality, and customer service (see the research cited in the Service Profit Chain and HR Champions).

    Core values

    Core values are the most common way organizations define, communicate, and manage their culture.

    Culture shift is crucial when your employees are not living the core values and when your core values have become stale, lifeless, meaningless, or irrelevant to your business.

    • If your core values are out of date, develop new values.
    • If they are stale, breathe new life into them by updating & redefining them.
    • If your employees are not living the core values, re-anchor your core values in culture (see here) and put culture back into strategic planning where it belongs (see here).

    My family company was in an extreme turnaround situation from 1996-2001. We often said we were changing every aspect of our business. I don’t think I have ever seen a situation in which a company had to make so many substantial changes in such a short period of time. But the reality is that we changed some aspects of culture but not others. Several of our core values stayed the same and helped us feel anchored. Wanting to improve how we lived some of those values (wanting to do them differently and better) was still an affirmation of their importance to our organization.

    Change versus maintenance

    It takes far more effort to change your culture than maintain it, but both take work.

    Large-scale change requires major OD work (see my blog Managing Your Core Values).

    Culture maintenance involves:

    • Verification: Regular debriefing and audits: How is our culture working for us? And how well are we managing it?
    • Leading by example: Leaders at all levels need to be leading by example, modeling desired behavior, and helping others do the same.
    • Pro-active support: Mentoring, coaching, and training, along with empowerment and resources. If customer-focus is part of your strategy, then help your employees get really good at it.
    • Continuous improvement: Pro-actively looking for opportunities for improvement. We should be striving to improve the way we live our values in exactly the same way we continually try to improve project management, budgeting, asset maintenance, and so on.

    You can look for opportunities for improvement from everyone and everywhere: new research, best practices, and as part of your continuous improvement efforts.

    I describe four drivers of authentic, sustainable culture here.

    Mergers & Acquisitions

    After a merger or acquisition, it is important to help your new employees adapt to your culture and live your core values as quickly and authentically as possible.

    Nevertheless, it is equally important to learn as much as you can from the acquired company’s culture. Try to absorb the best of what their culture had to offer.

    This can provide you with a wellspring of good ideas for improving your organizational effectiveness and culture. It can also be a huge sign of respect to your new employees that helps you earn their trust and loyalty. As you on-board your new employees, ask them:

    • What worked best in your old firm?
    • What did you like most about working there?
    • What made your organization effective?

    Asking these questions will also help you assess the ideas and skills of the people you are inheriting in the merger.

    Culture and the bottom line

    Think of the effort that goes into insuring, maintaining, and budgeting for our physical assets. Even more care and attention needs to go into our human assets—the people who are maintaining our machines, serving our customers, putting out the fires, and generating results for our shareholders. It’s good business.

    Brilliant idea: Treat your employees like human beings. Engage them in the problems and opportunities of your company. Make them part of the solution. Ask for their help. And help them be successful.

    Cultural dysfunction is so common that small improvements in your culture can generate huge results and give you a substantial competitive advantage. Culture matters.

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