The Importance Of Cultural Transformation

The Importance Of Cultural Transformation
Katherine Canales/SweetRush
Summary: What is cultural transformation and why is it important? Ashley Munday, Director of Cultural Transformation at SweetRush, answers these questions and more offering 5 tips to get started on your own cultural transformation movement.

How To Convey The Importance Of Cultural Transformation To The Entire Organization

“Do not use the word ‘transformation’ with anyone in the company”, I was warned. The large, for-profit, health care company underwent a reorganization over the previous year that was heralded by executives as a “cultural transformation”. Much of their middle management positions were eliminated and many had to reapply and compete for jobs that had no clear upward trajectory. Information was scarce and fear spread throughout the organization.

eBook Release: Transforming Culture In Larger Organizations
eBook Release
Transforming Culture In Larger Organizations
Learn how to help implement cultural transformation in your organization.

Cultural transformation had a bad rap. Reorganizations in themselves are not bad. Executives today are faced with rapidly changing global market demands. We are seeing exponential developments in digital technologies and rapidly changing global landscapes, requiring that organizations iterate faster and faster to stay relevant. This requires adopting next-generation organizational structures; ones that are agile, creative, and can pivot based on real-time customer needs. Reorg and change, or become irrelevant. Calling a reorganization a “cultural transformation,” however, is a misnomer. Culture is the way things are done. It’s the beliefs, values, and unspoken rules for how the people in the organization interact. It’s based on what was important to leaders in recent history and how your current leaders act. It’s not what they say; it’s what they do. Changing the organizational structure and posting aspirational values, like agile, entrepreneurialism and accountability, does not shift a culture.

How To Transform Culture

Transforming culture takes intention, attention, and time. Anyone who has tried to lose weight, change patterns in personal relationships, or overcome poor habits knows that it doesn’t happen overnight. You need to get absolutely clear on why you want to change, create a plan for change, know your pitfalls, and anticipate when you will need support. And that’s just to change your habits… the ones you arguably control most. But before you get discouraged thinking about the ways that you or a family member have repeatedly failed at making a positive change, it’s actually easier to transform as part of a group than alone. We sense what those around us feel, and align around how they behave. Harvard social scientists Christakis and Fowler studied the data of nearly 5,000 people over 20 years and found that people’s happiness and health depend on the happiness and health of those who surround them. We’ve long known that we have the ability to empathize with what others are going through. Scientists have now discovered “mirror neurons”, which light up when we are empathizing with another person. In fact, research from Stanford University’s James Gross shows that even when people hide their anger, and we don’t consciously realize they are angry, our blood pressure will increase. So, clearly, social contagion and mirror neurons can work for us or against us. In the case of the health-care company, there was so much fear and uncertainty as a result of their “cultural transformation” that when a new initiative, called a “digital transformation”, was announced, people were terrified. After the announcement of this new transformation initiative, I was told that some groups locked themselves in conference rooms for up to 12 hours to develop strategies to politically align and protect themselves.

The Importance Of Top Team Commitment To Cultural Transformation

Fortunately, with clear intention and commitment from a top team, culture can be a powerful motivator. When Nedbank hired Tom Boardman as CEO, they were on the brink of bankruptcy. News media called the hire a nail in the coffin of the organization since Boardman did not come from the financial world. In the early days, Boardman declared he would turn the bank around by being a vision-guided, strategy-driven organization grounded in values. He conducted an enterprise-wide cultural values assessment to determine what employees experienced in the organization, and what they desired for the future. It was a voluntary survey and had low participation in the first year. Boardman, along with his executive and HR teams, identified areas of strength and areas for development. He was transparent with the path for transformation. And he was clear that they couldn’t fix everything but that he was committed to picking three to five cultural action areas each year. Over the seven years of Boardman’s tenure, Nedbank experienced a positive transformation, reflected in their employee engagement, customer satisfaction, and financials. As the years unfolded, the cultural values assessment grew to have the highest level of participation of any survey because employees knew that their voices and input were heard and acted upon. The culture of Nedbank completely transformed, as did their business. One of my favorite concepts in the work of culture is to “create a movement, not a mandate”. Anyone who has ever been or had a teenager knows that the phrase “because I said so” has motivated no one—ever. The same goes for organizational leadership: just telling people that a particular change is good for them is not enough to spark collective inspiration. Cultural transformation is both a science and an art.

5 Tips For Starting Your Cultural Transformation Movement

Here are 5 tips for getting started on a true cultural transformation:

1. Top Team Alignment

Effective top teams work together to guide the vision and steward the values of the organization. This requires revisiting vision, mission/purpose, and values several times a year, deepening your understanding of and commitment to the culture. Know what drives each member of your leadership team and the legacy that each person wants to leave. Be an advocate and stand for helping one another as you also focus on the organizational goals.

2. Walking Your Talk

Employees are highly sensitive to whether they believe a leader has integrity. For example, if a leader espouses being family friendly, but comments and rewards employees who work round the clock, there is a disconnect between her walk and her talk. Invest in 360-degree leadership assessments to collect feedback on your leaders and support them with coaching. Hold leaders accountable to the values of your organization, through dashboards or as part of their performance review.

3. Measurement Matters

Find a way to measure your culture. Create a baseline and measure against it. As Peter Drucker famously said, “what gets measured, gets managed”.

4. Culture Plan

  • Pick three to five areas to focus on, with clear items under each.
  • Align your culture with your strategy; they are not separate initiatives but must be executed hand in hand.
  • Create clear, measurable actions and objectives with dates they will be completed by.
  • Communicate, communicate, communicate. Say what you’re going to do.
  • Ask for feedback.
  • Say what you’ve done differently as a result of the feedback.

Tom Boardman once told me that he practiced the “church form of communication”; meaning that every seven days, people go to church to hear an iteration and stories related to their core values. To really sink in, people need to hear things between three and 21 times, typically through three channels. Plan your communications and speak to what’s important to the people you are trying to reach.

5. Employee Engagement

Too often, employee engagement is looked at as a nice-to-have rather than a have-to-have. Cultural dysfunction and low employee engagement lead to lower revenue growth. Conversely, higher employee engagement leads to higher revenue growth. Employee engagement can’t be raised by benefits alone: one former Microsoft employee described herself as a well-kept rat in a maze. She had dry cleaning, prepared meals, and personal assistant support at hand, but she didn’t feel that her purpose was aligned with the company. She wasn’t supported in working on what she was most passionate about, in the way that she likes to work. At a high level, it’s all a process and a balance between meeting the needs of our customers, the organizations, and the employees. Very often, it’s a subtle shift to empowering our employees to find the best way to do their jobs and to coach them into their next role. Raj Sisodia, Bentley University professor and author of Firms of Endearment, writes, “A human being is not a resource but a source. A resource is like a lump of coal; once you use it, it’s gone, depleted and worn out. A source is like the Sun—virtually inexhaustible and continually generating energy light and warmth. There is no more powerful source of creative energy in the world than an empowered human being.”

The Importance Of Cultural Transformation: The Potential To Be A Transformative Story Of Good

Transformation takes time. It is a journey. Measure, plan, execute, collect feedback, and repeat. Know that it takes involvement from the top to the bottom of the organization. Declaring values and posting them on your website alone won’t shift your culture. Make your plan achievable, with quick wins and stretch goals; thereby embracing the tactical and the strategic. Be sincere. Listen. Create your legacy. All of our sacred narratives have to do with contributing to something greater than ourselves. Businesses are some of the most powerful systems of power on the planet. No matter your role, you have the power to be part of a transformative story of good. So what’s your vision? Find your allies and get started. Download the eBook Transforming Culture In Larger Organizations to learn how to implement cultural transformation in your organization!

eBook Release: SweetRush
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