After years of struggling with a culture that resisted change, executives at a major energy company considered their options. We had to make major changes to our infrastructure, technology, and customer service, but it was hard to imagine how to actually change employee behavior.
Management started by changing some of their own behaviors. One of the changes they made was to increase their priorities. The company needed to stop doing things that weren’t contributing in order to free up resources for important operational changes to be initiated. Management teams began saying “no” more often and challenging each other to provide a business rationale for different investments. Both were unpleasant departures from the company’s traditional culture. To maintain momentum, executives supported each other by holding weekly 20-minute retrospectives to share progress and challenges. Over time, these new behaviors were expected to ripple throughout the organization.
The definition of corporate culture is a system of visible behaviors that reflects an organization’s purpose, values, and beliefs. As this energy company knows, changing the culture requires changing the system. New behaviors are required from individuals and teams.
Company culture can be a headwind that hinders progress, or a tailwind that helps you achieve business results. As Bain & Company Partners Tracy Surkow and Mark Berman recently pointed out, companies with winning cultures generate, on average, 10 times more revenue and total revenue than their peers over a five-year period. It is said that shareholder returns have increased five times and pre-tax profits have increased five times. According to a 2020 Bain & Company study.
At the core of a winning company culture are three key characteristics:
it generates Inspiration. People have an emotional connection to the organization and are inspired by their leaders. Importantly, they have a clear idea of how their work contributes to the company’s broader objectives, and are motivated by that.
it nurtures performance. People are hungry to achieve ambitious goals that align with their purpose, and they align their behavior with operating models that are suited to achieving that goal.
comprehensive. Individuals feel like they belong to both the organization and the team, and are treated with dignity as unique individuals. (For more on this, see Building an Inclusive Workplace for Women and Others.)
As companies begin the process of redefining their culture, leaders need to focus on specific actions: what needs to change, how it will change, and who will do it. there is. Next he will help guide them by asking six questions.
what to change
To determine what needs to change, companies can ask themselves the following questions:
- How many of our existing cultural artifacts, such as purpose statements, values, and behaviors, need to be redefined?
- What are the existing elements of the culture that should never be touched?
How to change
To determine the best process for engaging people, leaders can start by asking:
- How clear is your organization about how its culture needs to change as you launch?
Once you understand that, the next question is:
- How much coordination is required between the leadership team?
To achieve the required level of specificity, executives often require a higher level of coordination than they originally thought was necessary.
who will do it
To identify who is important to changing the culture, executives should ponder the following key questions:
- What are the chances that employees will embrace this culture change?
If it is not a controversial change, leaders may simply focus on communicating the change and explaining the new culture. Techniques such as storytelling and creating new rituals that reflect the new culture can be helpful. If people are more receptive to change, management may further strengthen that inclination by soliciting their opinions through surveys and focus groups.
Another question to consider is:
- Will certain parts of the organization struggle with this change more than others?
For parts of the organization where buy-in is less likely, leaders can take a more collaborative approach, for example by having interactive conversations and workshops rather than meetings and one-way communication.
It has long been understood that company culture is important. It can enhance or hinder performance. But change can also be difficult. By adopting a structured analytical approach centered around specific behaviors and practical questions of “what, how, and who,” executives can build a stronger company culture while improving business performance. can be improved.
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