Lesson 1, Topic 1
In Progress

5.9 Organizational culture to support new strategies

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Your corporate culture has a significant impact on whether or not your company accomplishes its most significant goals. You may need to tweak the culture, or you may need a complete culture overhaul. Although changing your organizational culture can feel like rolling rocks uphill, it will likely result in increased growth and revenue.

Organizational cultures form over years of interaction among participants in an organization, department, or team. Usually, a significant event must take place for people to consider making a culture change. Significant happenings can include flirting with bankruptcy, a significant loss of sales and customers, a new CEO with a different outlook and agenda, or losing $1 million in a month.

Steps in Organizational Culture Change

Three major steps are involved in changing an organization’s culture:

  1. Understand your current culture.
  2. Decide where your organization wants to go, define its strategic direction, and decide what the organizational culture should look like. What vision does the organization have for its future, and how must the culture change to successfully accomplish that vision?
  3. The individuals in the organization must decide to change their behaviour to create the desired organizational culture. This is the hardest step in culture change.

Plan the Desired Organizational Culture

Develop a picture of your organization’s desired future. What does the organization want to create? How will this benefit your employees and the organization’s other stakeholders? What are the key facts you want to be true in your desired culture?

Examine your mission, vision, and values for both the strategic and the value-based components of the organization. Your management team needs to answer questions such as:

  • What are the five most important values you would like to see represented in your organizational culture?
  • Are these values compatible with your current organizational culture? Do they exist now? If not, why not? If they are so important, why aren’t you attaining these values now?
  • Are your mission, vision, and values clearly articulated and disseminated so that employees have a clear understanding of the organization’s direction and where they and their goals fit within it?
  • What cultural elements support the success of your organization, and what elements of the current organizational culture need to change?
  • Perhaps your team decides that you spend too much time agreeing with each other rather than challenging potentially incorrect forecasts and assumptions of fellow team members.
  • Or perhaps key management leaders spend most of their time with team members individually and promote individual agendas to the detriment of the cohesive functioning of the whole group. Consciously identify the cultural elements and decide to change them.

Change the Organizational Culture

Knowing what the desired organizational culture looks like is not enough. Organizations must create plans to ensure that the desired organizational culture becomes a reality. The two most important elements for creating organizational cultural change are executive support and training.

Executive Support

Executives must support cultural change in ways beyond verbal assent. They must show support for cultural change by changing their own behaviours.

Provide Training

Culture change depends on behaviour and belief change. Members of the organization must clearly understand what is expected of them and how to actually do the new behaviours. Use training to communicate expectations and new behaviours. Mentoring will also help employees learn and change.

Additional Ways to Change the Organizational Culture

Communication, employee involvement, and a willingness to learn and adapt are keys to keeping organizational change on track.

Create value and belief statements

Ask employee focus groups to put the company’s mission, vision, and values into words that state the impact on each employee’s job. For one job, the employee stated, “I live the value of quality patient care by listening attentively whenever a patient speaks.” This exercise gives all employees a common understanding of the desired culture that actually reflects the actions they must commit to on their jobs.

Practice effective communication

Keeping all employees informed about the organizational culture change process ensures commitment and success. Telling employees what is expected of them is critical for effective organizational culture change. Employees must be able to clearly articulate why you are seeking a culture change, their role in the process, and what your organization will look like following the change.

Review organizational structure

You may need to change the physical structure of the company to align with the desired organizational culture. For example, a small company with four distinct business units competing for a product, customers, and internal support resources may not support an effective organizational culture and the overall success of the business.

Consider moving employees and teams

You want to create a sense of cohesion and camaraderie among groups that must work together to serve customers. So, to accomplish this closeness, you will want to move people who must work closely together into the same space.

Redesign your approach to rewards and recognition

You will likely need to change the reward system to encourage behaviours vital to the desired organizational culture. For example, if you want to encourage employees to work as cohesive teams, you must reward them for their success as team players.

Review all work systems

Make sure systems such as employee promotions, pay practices, performance management, and employee selection align with the desired culture. For example, you cannot just reward individual performance if your new organizational culture values teamwork. A senior leader’s bonus should also be based on playing well with others on the leadership team to accomplish your organizational goals. It is more difficult to change the culture of an existing organization than to create a culture in a brand-new organization or team. When an organizational culture is already established, people must unlearn the old values, assumptions, and behaviours before they can learn the new ones.