[This article is co-authored with Taival]

 

There are multiple business, technology, and organizational trends that are gaining traction. They will fundamentally change the way we work, sell, and consume today. While emerging trends are not new, the pace of change is increasing. Companies across all industries and geographies will need to prepare their organizations for this new change-centric world by establishing a new organizational model and culture that can support these trends to rapidly turn them into new products, services, and competitive advantages.

Is your culture change savvy?

New technologies such as AI, IoT, Blockchain, Analytics/Big Data, and AR/VR, to name only a few, are on the priority list of most companies. However, these companies often lack the organizational culture to deliver on their promises. Culture can hinder innovation and agility by setting wrong priorities, providing the wrong incentives, or by establishing the wrong leadership qualities.

Thus, a dysfunctional corporate culture can kill companies and hinder the realization of synergies in M&A initiatives. Furthermore, we see in recent examples of highly recognized companies, such as Uber, that a dysfunctional corporate culture can have devastating impacts on a company.

Kodak is today often used as an example of a failed company that missed the opportunities of digital technology. What’s little known is the fact that Kodak invented digital photography and a platform very similar to Instagram years back. Their organization just couldn’t transform itself to take advantage of these opportunities as the corporate culture centred on the traditional business model and products.

While executives may recognize the power of organizational culture, they very often go for a “quick fix” by establishing a cultural change program as a one-off activity. While such initiatives are often well intended, they show limited impact and seldom lead to long-term results.

Changing the corporate culture is not an easy task

While a one-time culture program can look like the right solution to change your organization towards a defined to-be state, it falls short when the environment keeps changing even more rapidly. As you are reaching the target of your cultural journey you might not be any closer to where you need to be as a successful player in the market place. Change is constant and requires active management of the corporate culture and an understanding that change readiness is a critical part of a functional organizational culture.

Therefore, instead of understanding cultural change as a one-off activity, it should rather be considered as a discipline anchored in the C-suite with a “seat at the board table”. Furthermore, it should be supported by the right metrics that are developed, managed, measured, and reviewed on a regular basis. These metrics should become part of the corporate scorecard and, even more importantly, used for the bonus schemes of the leadership team.

Understanding the importance of culture is a critical success factor for any company today, independent of the size, industry, or geography of an organization. Furthermore, understanding the need to differentiate between various sub-cultures within a large, complex organization is important in order to address the common misconception that companies have one unified culture across the organization.

Key elements of a successful culture capability

  • Executive KPI – Periodically measured and reported KPI on the culture of an organization along 8 culture dimensions as established by the Hofstede Organizational Culture Model
      • Means versus goal oriented
      • Internally versus externally driven
      • Easy going versus tight work control
      • Local versus professional
      • Open versus closed system
      • Employee versus task oriented
      • Degree of leadership acceptance
      • Degree to which people identify with the organization
  • Quarterly roadmap – derived from continuous measurements of the as-is organizational culture to inform the to-be organizational culture in line with your strategy, thus providing clear guidance for the cultural journey of your organization.
  • Chief Culture Officer (CCO) to be nominated – To ensure the right focus on the corporate culture, there needs to be a leadership role focused on the same that is empowered to take action as required.
  • C-level sponsorship – The C-level needs to understand the culture factor and be aware of its significance to a committed and engaged workforce. The C-level needs to actively shape the organizational culture through their own behaviors, the way they promote people, act, interact –in short “walk-the-talk”.

Conclusion

In today’s world, organizational culture is critical for keeping an organization on its course through disruption, growth, and change. While the importance of organizational culture is recognized by many executives today, decisive actions are not always taken to ensure that an organizational culture is in place that enables transformation in order to continuously morph and adjust to the latest changes. An organizational culture that is kept unchanged and static over years and even decades seldom works in a world where customers expect agility, innovation, and digitalization at the same pace as they are used to from start-ups. Corporate culture should enable an organization to change continuously and adapt accordingly. At the same time, it requires clear management and oversight to avoid dysfunctionality that could impact on a company’s ability to perform.
It’s time to verify the change savviness of your organizational culture and to act.

About the Authors

Michael Hanf

Michael Hanf

Executive Partner, Taival

With more than 17 years in business and technology consulting, Michael has deep experience in helping companies deliver and navigate disruptive change. He’s passionate about bringing together corporates, start-ups and senior experts into an open ecosystem to deliver impact and value for Taival’s customers.

Merita Vilen

Merita Vilen

Associate Partner, itim International

Having worked for over 20 years in different leadership and consulting roles, Merita has acquired a deep knowledge and understanding of organizational culture, culture change, and the importance of culture for the success of organizations. Merita is passionate about helping organizations and individuals shape their culture and align it with their strategy.