Changing Organizational Culture Full Guide 2024

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Culture Change

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Organizational Culture lies at the root of what makes a company successful, and yet it can be hard to grasp or define, much less actively cultivate. In many ways, it is like the air we breathe, crucial to our survival, at the same time invisible. Changing organizational culture is a strategic imperative for businesses seeking to adapt to evolving landscapes, foster innovation, and navigate transformative changes successfully.

Changing organizational culture is a strategic imperative for businesses aiming to enhance adaptability, foster innovation, and create a workplace that attracts and retains top talent. Our Strategic Management Consulting helps businesses navigate the complexities of cultural change more effectively and ensures that our clients have plans in place that create genuine culture change for real results.

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One reason is that companies often think they need to change their entire organizational culture to one of innovation. But you actually do not want to create a uniform culture across the entire organization. Rather, you want to allow a new innovation-fostering culture to emerge when you are transforming your organization or doing entirely new things. The same culture cannot meet the very different requirements of error-free execution on a large scale and openness to experiment in the innovation team.

The widespread approach of trying to create organizational cultural change through a change in organizational structure alone is marked by many setbacks and is rarely successful in changing culture quickly and sustainably. Why? Because the root of culture, our collective mindset, is not included. If individuals understand their current mindset, why they need to transform it, and what they are as an organizational culture aiming for, they will be much more likely to “be the change they want to see.”

In this article, we discuss how you can begin changing organizational culture in order to inspire and encourage innovation. Organizational development is a medium- to long-term project that requires a dedication of many resources, but the rewards are great for the company that can match its organizational structure to its needs and its customers’ expectations.

What is Culture Change of the Organization

What are your business’s priorities, attitudes, and personality? These reflect your Organizational Culture.

Your Organizational Culture is going to play a pivotal role in any planned change because it impacts how your people will respond to new situations, roles, and expectations. Organizational Development nearly always includes an evolution of your Organizational Culture, as well, because your culture has so much impact on how you do business.

When we help organizations develop their Innovation Culture, we try to understand what makes that business unique. How are their priorities revealed by the way they do business? Some important key aspects of your Organizational Culture say a lot about what you value.

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Key Aspects of Organizational Culture

Your Organizational Culture has a tremendous impact on your business’s success. Culture drives business—it makes customers feel welcome, inspires employees’ best performances, and facilitates the kind of innovation that establishes your relevance for years to come.

Organizational Culture Canvas
The UNITE Culture Canvas
Designed by: Susanne M.Zaninelli & Stefan F.Dieffenbacher

But what is the shape of Organizational Culture? We think there are some key aspects to Organizational Culture that both influence and reflect the overall mission and approach a business is taking.

Leaders and their roles

From where does the organization draw its leadership, and how does it empower those leaders?

A top-down approach to management creates a certain kind of culture – often detached from the workforce, occasionally adversarial. While this has its point and its purpose, it cannot ever be anything more than what it is.

On the other hand, if management is pushed further down the hierarchy drawn from different ranks, and empowered to make decisions closer to where those decisions are put into motion, workers feel more connected and more responsible for carrying out the business’s mission. There are benefits here, but only if the highest levels of managers are willing to relinquish some of their perceived power.

Company values that matter

Writing and promoting a mission statement is important; ensuring your company is living up to the standards described there is even more important.

Claiming to be for doing business a certain way, while at the same time performing otherwise, erodes trust between you, your employees, and your customers.

Make sure your policies and HR directives align with how you portray your work in your values and mission statements. Build incentives into your performance evaluations and compensation structure to reward people who best embody your values. Those values have been articulated for a reason—don’t let them be just for show

A productive employee experience

While every job includes some aspects of work that we don’t love—or sometimes even like—a positive Organizational Culture allows for an overall productive employee experience in which workers feel useful, valuable, and appreciated.

An effective employee experience lets workers feel secure today and includes a vision for tomorrow.

How to Change Organizational Culture? Step By Step

Changing organizational culture is a complex and iterative process that requires commitment, strategic planning, and ongoing effort from leadership and employees. Here is a step-by-step guide to help you navigate the process of changing organizational culture:

1. Assessment and Understanding:

  • Objective: Understand the current culture.
  • Steps:
    • Conduct cultural assessments, surveys, and interviews to identify existing cultural traits.
    • Analyze employee feedback, turnover rates, and organizational performance.
    • Identify strengths and weaknesses of the current culture.

2. Define Desired Culture:

  • Objective: Clearly articulate the desired culture.
  • Steps:
    • Align the desired culture with the organization’s mission, vision, and values.
    • Define specific cultural attributes, behaviors, and values that support strategic objectives.
    • Ensure leadership alignment on the vision for the new culture.

3. Leadership Commitment:

  • Objective: Secure commitment from top leadership.
  • Steps:
    • Ensure leaders are committed to embodying and promoting the desired culture.
    • Communicate the importance of cultural change to all levels of leadership.
    • Provide leadership training and development focused on cultural transformation.

4. Communication Strategy:

  • Objective: Clearly communicate the change to the entire organization.
  • Steps:
    • Develop a comprehensive communication plan to articulate the need for cultural change.
    • Regularly communicate progress, milestones, and the impact of the new culture.
    • Foster open dialogue and address concerns transparently.

5. Employee Involvement:

  • Objective: Engage employees in the change process.
  • Steps:
    • Solicit feedback from employees about their views on the current culture and desired changes.
    • Create cross-functional teams to drive cultural initiatives.
    • Encourage employee participation in decision-making processes related to cultural change.

6. Align Policies and Practices:

  • Objective: Ensure organizational policies and practices support the desired culture.
  • Steps:
    • Review and update HR policies, performance management, and reward systems.
    • Align recruitment and onboarding processes with the new cultural values.
    • Incorporate cultural expectations into day-to-day practices.

7. Training and Development:

  • Objective: Build the skills and mindset required for the new culture.
  • Steps:
    • Provide training programs on cultural awareness, inclusion, and communication.
    • Develop leadership training focused on reinforcing cultural expectations.
    • Encourage continuous learning and development to support cultural evolution.

8. Recognition and Rewards:

  • Objective: Reinforce the desired behaviours through recognition and rewards.
  • Steps:
    • Establish a system for acknowledging and celebrating employees who embody the desired culture.
    • Align performance appraisal criteria with cultural values.
    • Consider implementing incentives that encourage cultural alignment.

9. Iterative Monitoring and Adjustment:

  • Objective: Regularly assess progress and make adjustments as needed.
  • Steps:
    • Monitor cultural indicators, employee engagement, and performance metrics.
    • Gather feedback through surveys and focus groups to identify areas for improvement.
    • Adjust strategies based on feedback and evolving organizational needs.

10. Sustain and Embed:

  • Objective: Institutionalize the new culture.
  • Steps:
    • Integrate cultural expectations into ongoing initiatives and practices.
    • Embed cultural values into performance management, leadership development, and hiring processes.
    • Foster a continuous improvement mindset to adapt to changing organizational dynamics.

11. Celebrate Successes:

  • Objective: Recognize achievements and milestones.
  • Steps:
    • Celebrate successes and communicate positive cultural changes.
    • Reinforce the link between cultural alignment and organizational achievements.
    • Use success stories to inspire and motivate employees.

12. Long-Term Monitoring:

  • Objective: Ensure cultural sustainability over the long term.
  • Steps:
    • Incorporate cultural assessments into regular organizational audits.
    • Continuously assess the impact of cultural changes on organizational performance.
    • Adapt strategies to maintain cultural relevance in a changing business environment.

Changing organizational culture is a journey that requires persistence, consistency, and a deep understanding of the organization’s unique dynamics. By following this step-by-step guide, organizations can lay the foundation for a positive and adaptive culture that aligns with their strategic objectives.

The UNITE Organizational Culture Canvas

Organizational Culture Canvas
The UNITE Culture Canvas
Designed by: Susanne M.Zaninelli & Stefan F.Dieffenbacher

We created the Culture Canvas in collaboration with more than 30 experts from academia and industry to identify and map the key aspects of an organization’s culture. When we set out to understand, describe, discuss, question, shape and renew our organizational culture, we need a tool that will render culture understandable, tangible, and actionable.

The Organizational Culture Canvas is such a tool. It enables a group to immediately understand the most important factors and how they interact. Although we will focus on applying the Organizational Culture Canvas to the field of innovation, you can apply this canvas to any type of organizational culture.

Identifying the gaps between your current culture and the culture you aspire to, using the color spectrum we will introduce, helps you focus and strategize your transition from one state to another. Gaining a solid understanding of how your organizational culture currently operates will be critical in that process. Habits of thinking and acting can be difficult to change; understanding their roots is critical for finding ways to transform them.

Organizational Culture Change Examples

Organizational culture change is a challenging but transformative process. Here are a few examples of organizations that successfully underwent significant cultural transformations:

1. IBM: From Traditional to Innovative

  • Challenge: IBM, once known for its rigid and traditional culture, faced challenges in adapting to the fast-paced tech industry.
  • Transformation: Under the leadership of CEO Ginni Rometty, IBM shifted its focus to innovation and embraced a more entrepreneurial culture. The company encouraged collaboration, introduced flexible work arrangements, and fostered a startup-like environment.

2. Microsoft: From Hierarchical to Agile

  • Challenge: Microsoft recognized the need to move from a hierarchical and bureaucratic culture to a more agile and innovative one.
  • Transformation: CEO Satya Nadella initiated a cultural shift by encouraging a growth mindset, emphasizing collaboration, and promoting diversity and inclusion. The “One Microsoft” philosophy aimed to break down silos and foster cross-functional teamwork.

3. Zappos: Creating a Culture of Happiness

  • Challenge: Zappos aimed to build a unique and customer-focused culture that aligned with its core values.
  • Transformation: CEO Tony Hsieh implemented a holacracy model, eliminating traditional management structures. Zappos prioritized employee happiness and customer satisfaction, encouraging creativity, autonomy, and a sense of ownership among employees.

4. Google: Maintaining a Culture of Innovation

  • Challenge: As Google grew, maintaining an innovative and entrepreneurial culture became a challenge.
  • Transformation: Google focused on preserving its startup culture by fostering a collaborative environment, allowing employees to spend a portion of their time on personal projects, and promoting transparency. The company continued to prioritize a culture that values experimentation and risk-taking.

5. General Electric (GE): Shifting from Bureaucracy to Agility

  • Challenge: GE faced challenges with its bureaucratic structure and the need to adapt to a rapidly changing business landscape.
  • Transformation: Under CEO Jack Welch, GE implemented the “Work-Out” initiative, aiming to streamline processes and eliminate bureaucracy. Subsequent CEOs continued the focus on agility and innovation, emphasizing digital transformation and the integration of technology into the company’s culture.

These examples demonstrate that successful organizational culture change involves aligning culture with business strategies, empowering employees, fostering innovation, and adapting to evolving market dynamics. Each organization’s journey is unique, reflecting its values, leadership, and commitment to continuous improvement.

Changing Organizational Culture Importance, and Why Do We Need a Culture Change?

Why does your organization need a culture change? Likely because the world on the outside of your business is changing quicker than the world inside of your business. In other words, if the change rate outside exceeds the change rate inside, you can bet the end of your business is coming, and soon. That’s why adopting an innovation culture as part of your daily business activities is so vital to ongoing success.

To evolve, we need to become aware of our own mindset, the window through which we view the world, and the unconscious filter we have acquired to decide what is right and wrong. Views and skills we acquired in earlier stages of mindset cannot be skipped or erased. As our abilities to understand and process expand with each mindset development, we are increasingly able to deal with complexity and better understand how different things relate to each other. We learn to sense, identify, and deal fruitfully with our own feelings and needs, and those of others. In this way, we integrate the qualities of previous mindsets, which makes the window through which we view the world wider and wider and our view more and more expansive.

This type of individual personal development is critical for the evolution of culture within organizations. Individuals are the foundation of culture. Our personal abilities stem mostly from what we subconsciously learned in our childhood and limit not only what we can do as individuals, but also what we can achieve as organizations. Changing the organizational culture thus requires personal internal work.

How does Organizational Culture Impact the Change Process

Organizational culture plays a significant role in influencing the change process within a company. The impact of organizational culture on change can be observed in various aspects, affecting how employees perceive, adapt to, and contribute to changes. Here’s how organizational culture influences the change process:

1. Resistance or Acceptance:

  • Culture Impact: In a culture that is resistant to change, employees may resist or be hesitant to embrace new initiatives. Conversely, in a culture that values innovation and adaptability, employees are more likely to accept and welcome change.

2. Communication and Transparency:

  • Culture Impact: The communication style and transparency levels embedded in the organizational culture influence how information about the change is shared. Open cultures with transparent communication tend to facilitate smoother change processes.

3. Leadership Style:

  • Culture Impact: The prevailing leadership style within the organizational culture shapes how change is led. In a culture that values participative leadership and collaboration, change efforts are likely to involve employees more actively.

4. Risk-Taking and Innovation:

  • Culture Impact: Cultures that encourage risk-taking and innovation foster a more dynamic environment, making employees more receptive to changes that align with these cultural values.

5. Employee Engagement:

  • Culture Impact: Cultures that prioritize employee engagement and involvement in decision-making tend to have more engaged and committed employees during the change process.

6. Adaptability and Flexibility:

  • Culture Impact: Cultures that value adaptability and flexibility are better equipped to handle change. Employees in such cultures are more likely to adjust quickly and find creative solutions during the change process.

7. Organizational Structure:

  • Culture Impact: The organizational structure influenced by culture can either facilitate or impede the change process. Hierarchical cultures may face challenges in implementing decentralized changes, while flatter, more agile cultures may adapt more easily.

8. Employee Collaboration:

  • Culture Impact: Collaborative cultures where teamwork is encouraged make it easier for employees to work together on change initiatives. In contrast, cultures that promote individualism may require specific strategies to encourage collaboration.

9. Cultural Norms and Values:

  • Culture Impact: The existing norms and values within the organizational culture can either align or conflict with the proposed changes. Change initiatives that align with existing cultural values are more likely to be embraced.

10. Learning Orientation:

  • Culture Impact: Cultures that foster a learning orientation and view failures as opportunities for improvement are more likely to support experimentation and learning during the change process.

11. Customer Focus:

  • Culture Impact: An organization with a strong customer-focused culture may find it easier to implement changes that enhance customer satisfaction, as employees are aligned with the organization’s customer-centric values.

12. Employee Well-Being:

  • Culture Impact: A culture that values employee well-being and work-life balance may be more sensitive to how changes impact employees’ daily lives, influencing the design and implementation of change initiatives.

13. Cultural Resilience:

  • Culture Impact: A resilient culture—one that has weathered previous changes successfully—may instil confidence in employees during new change initiatives.

Understanding the existing organizational culture and how it intersects with proposed changes is crucial for effective change management. Organizations often need to assess, align, or transform their culture to ensure it supports the desired changes and facilitates a positive change process.

When is it Time for an Organizational Culture Change?

How can you recognize the time for a change in Organizational Culture?

We believe leaders know it’s time for a change often earlier than they like to admit. Strong leaders recognize slowdowns in innovation, slips in quality, other organizations sliding past.

When your Organizational Culture is no longer contributing to a competitive advantage, it’s time to make a change.

When your business goes through a traumatic event—bankruptcy, change in leadership, a major shift in the business environment, significant event—it’s time for an Organizational Culture change.

It’s time for an Organizational Culture change if your major metrics fail to meet ongoing needs. When your workers feel like they can’t communicate, it’s time for a change in Organizational Culture.

Tips for Changing Organizational Culture Effectively

The keys to effectively changing your Organizational Culture are perhaps unsurprising, but they deserve articulation.

Changing Organizational Culture Tips
Changing Organizational Culture Tips

Incorporate The Whole Organization

It’s vital that all levels of your organization buy into your Culture change. Communicate the importance of the culture change and clearly state everyone’s role in the process.

Build a Healthy Workspace Environment & Build Connections Between Team Members

Your Business Model Environment and your Organizational Culture will always necessarily be connected. Acknowledging the influence they have on each other will make it much easier to bring them into alignment. A healthy workspace environment that encourages connections and collaboration creates a positive situation that will help Organizational Culture change effectively. After all, change can only occur when everyone feels seen, valued, and supported.

Help People Identify Their Own Reasons for Change

People adapt to change better when they understand how it will be helpful to them. Use your positive workplace environment to communicate the advantages people will experience as a result of the change you’re enacting.

Align your Organizational Culture with Strategy & Processes

Your Organizational Culture should be integrated into your overall Innovation Strategy and the processes you’re using to continue developing the ways you bring value to your customers.

If your culture doesn’t reflect how you value the development of innovation, then you should be enacting changes, clearly.

Effective Organizational Change is only possible when all your processes align with your overall plan.

Align Culture Change Within Your Organizational Values

Finally, you can help ensure successful Organizational Change by aligning your change efforts to your Organizational Values, and vice versa.

Without all of your objectives and attitudes correctly in line, it’s very difficult to guide your business at all, let alone through the turmoil of Organizational Culture change.

Changing Organizational Culture FAQs

What are the Advantages of Culture Change?

There are many advantages to Organizational Culture change, including finding ways to continuously leverage your competitive advantage in the marketplace and ensuring that you have the right approach to innovation.

What are the effects of change in culture?

A successful change in culture helps your business stay competitive and helps retain quality employees.

The UNITE Business Model Framework: A Framework for Innovation Success

Business Model framework
THE UNITE Business Model Framework
Designed By: Digital Leadership AG

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