7 Big Steps to Change Corporate Culture

A cartoon of a many trying to fly by trying to follow the Steps to Change Corporate Culture

Seven Big Steps to Change Corporate Culture
Just like a company’s strategy and people, workplace culture cannot remain stagnant.  A corporate culture needs to constantly shift and align with the business and people strategies.  Unfortunately, leadership teams often wait too long to take the big steps to change corporate culture to match their new strategies.

Underestimating the Performance Impact of Culture
We define culture as the collective stuff (values, beliefs, attitudes, knowledge, stories, communication and behaviors) that defines how things get done on a day-to-day basis.  Our organizational alignment research found company culture accounts for 40% of the difference between high and low performing teams and organizations in terms of revenue, profitability, customer retention and employee engagement.

Desired Culture and Conflicts
Unfortunately too many companies have an unclear definition of how they expect employees to behave or have conflicting performance measures and goals.

  • In low growth companies only 48% of employees report that the desired company culture is clearly explained to employees compared to 83% in high growth organizations.
  • In low growth companies only 44% of employees report a healthy balance of short- and long-term decisions compared to 84% in high growth organizations.

How can you expect to perform at your peak if behavior and performance expectations are unclear or if day-to-day decisions undermine long-term strategies to change?

Ways to Change Corporate Culture
There are several options for steps to change corporate culture available to companies.  You can hire new leadership, you can change your values, you can change how people are rewarded and held accountable or you can restructure the organization.   While all four options have some merit depending upon what you are trying to accomplish and why, here are the seven big steps to change corporate culture:

1. Ensure Strategic Clarity and Believability
Because strategy must go through culture and people to be fully implemented, smart leaders ensure strategic clarity at the company, division, team and individual levels before embarking on any cultural change initiatives.

A clear strategy sets the foundation for high levels of purpose, meaning and connection – three critical elements to set the stage for culture change.  Our organizational alignment research found Strategic Clarity accounts for 31% of the difference between high and low performing teams and organizations.  Is your strategy clear enough?

Do not make the mistake of trying to change your cultural norms unless your strategy is clear and up for the marketplace challenges you face.

2. Assess Your Current Culture
Be as objective as possible in assessing your current workplace culture. Don’t pull any punches. If you’re going to do it right, you need to assess your levels of cultural health, performance and strategic alignment so you know where you stand compared to where you want to go.

3. Define Your Desired Culture
Once you understand your current levels of cultural health, performance and strategic alignment, it is time to clearly define the desired culture necessary to execute your people and business strategies. Effective leaders align their organizational culture to their business strategy across ten cultural dimensions:

  • Market Approach – from adopter to leader
  • Customers – from transactional to intimate
  • Loyalty – from individual to company
  • Focus – from internal to external
  • Risk Tolerance – from low to high
  • Operational Approach – from low to high process variation
  • Decision Making – from centralized to decentralized
  • Information – from fact-based to intuition-based
  • Atmosphere – from social to disciplined
  • Results – from “the how” to “the what”

4. Identify the Culture Gaps
Once you understand the major differences between your current and desired organizational culture, your next step is to identify the critical one or two most impactful cultural shifts required to successfully execute your strategy.  Then define what cultural change will mean for the organization and how to take action.

5. Plan Steps to Change Corporate Culture
This is where you identify and train culture champions and prepare to support them with what they need to help align your culture to your strategy. You need an explicit road map for change that breaks down each key initiative into action steps that are tied to key performance indicators, objectives, deliverables and milestones.

6. Spread the Word of Culture Change
Each and every employee should become as familiar with the culture change plan as you are. They should be able to articulate what the specific culture changes are, why they are important and how they will help to accelerate the overall people and business strategies compared to the status quo. Everyone should understand their unique contribution to the effort and how culture change will benefit the organization, their team and them as an individual.

7. Lead by Example
Leaders, high performers and culture change champions must consistently model what it looks like to live the desired behaviors. This is your opportunity as a leader to behave in a way that is consistent with the cultural values you endorse. Those who “walk the talk” should be recognized and rewarded; those who don’t should face consequences.

8. Continuously Renew
Welcome suggestions from the workforce on how you can continue to improve the culture. Your employees are your experts. Their thoughts and ideas matter. As they participate more and more in the creation of positive vibes, the faster your culture will change in the right direction.

The Bottom Line
If you are determined, a winning and aligned culture need not be out of reach. Have the courage to tackle the problem…but do so with objectivity, careful planning, good and frequent communication, consistent modeling of the desired behaviors and readiness to refresh the plan as needed.

To learn more about the steps to change corporate culture, download The 3 Levels of a High Performance Culture

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