How can you shift your organization’s culture? This is a critical question to answer if you want to survive and evolve as a company.
Had Microsoft not transformed from a sales-oriented culture to one with a “learning mindset,” it might have crumbled in the face of cloud-based competitors. Had Airbnb not adjusted its culture as the COVID crisis hit from one oriented toward customer acquisition to one focused on creating connections, its IPO may have failed.
So, what are your options for shifting your organization’s culture?
The Outthinker team studied almost every framework we could find for changing corporate culture and reviewed some of the most successful cultural transformation cases. We found that there are 70 levers shown to impact culture. Naturally, you won’t use all 70, but before you decide on how you will initiate cultural change, it’s worth stepping back and appreciating all of the tools available to you. They fall into five categories:
- Strategy
- Patterns of behavior
- Informal organization
- Formal organization
- Talent
Some of these categories are directly under your control (like Strategy) and some you will only indirectly impact (like Informal organization).
Step 1: Strategy
Culture is essentially patterns of behavior that are influenced and reinforced by people and systems. So, to know what kind of patterns of behavior you want, you need to know what your purpose and path to achieving that purpose is. You do this by working these leverage points:
- Mission – define it
- Vision – paint it in a compelling way
- Business – define what business you are in
- Customer – define what customer you serve (and importantly what customers you do NOT serve)
- Value proposition – define the difference you will make for your customers
- Where to play – define which geographies or markets or situations you compete in
- Advantages – define how you will win
Step 2: Patterns of behavior
Once you know your strategy – who you serve and what you do for them – you can define two types of behavior:
- The specific tasks to be done to implement your strategy
- The typical, day-to-day patterns of behavior you expect to see
Step 3: Informal organization
The tasks people perform are influenced by, and also influence, the informal organizational structures they work within. Think through these aspects of the informal organization:
- Norms that inform how to act (e.g., we always show up to work early)
- Norms of approval or disapproval or expectations for how people should behave (e.g., we make fun of people who show up late)
- Values (not the formal values you set later in step 4, but the actual values people hold)
- Courtesies
- Rituals
- Mindsets (e.g., Microsoft’s transformation depended heavily on the adoption of “growth mindset” throughout the organization)
- Manners of interacting
- Customs
- Relationships
- Thoughts
- Attitudes
- Feelings
- Heroes
- Unwritten rules
- Informal organizational structures (e.g., communities, networks)
- Informal reporting structures
- Identity
- Fundamental human needs (e.g., for safety)
We may not be able to directly control the informal organizational drivers, but we can influence them through our next two steps.
Step 4: Formal organization
Your formal organization offers numerous powerful points of leverage to consider:
- Leadership behavior
- Role modeling of desired patterns of action by senior leadership team (perhaps a subset of leverage point 1 above but important enough to call out separately)
- Processes
- Policies
- Organization structure
- Structure of information flow
- Monitoring systems (what we measure)
- Espoused values, including formal professed culture of the organization, slogans, operational creed and purpose statements
- Control systems
- Communication – must be done relentlessly
- Early internal adopters – identify them and communicate early with them to get them on board
- Formal stories to illustrate desired behaviors
- Success stories to illustrate the payoff of the desired change
- Statements that describe the desired behaviors
- Statements and stories of the purpose (the “why?”)
- Systems, including financial, quality, reward and technology systems
- Processes, including budgeting, performance tracking, workflows and operational
- Roles/role descriptions
- Data and evidence
- Facilities
- Offices
- Décor
- Furnishing
- A cultural diagnostic (to identify gaps between current and desired states)
Additionally, there are points of leverage that sit somewhere between your formal and informal organization. They can be influenced formally but also naturally take on a life of their own. These include:
- Stories (you may introduce your stories, but they evolve and take a life of their own)
- Power structures (e.g., power may sit with just one or two executives or you may create a “flat” organization, but informal power structures evolve without your direct control)
- Dress (you may impose a dress code, but even then, people are likely to have flexibility for individual expression)
- Communication channels (e.g., you may dictate people use your internal communication, but may find they start using alternative platforms)
- Personal technology (e.g., you may dictate people use a certain device, but they may additionally bring their own device to work)
- Status
- Practices
- Language (e.g., you may introduce your desired language, but it will compete with naturally emergent languages)
- Symbols
Step 5: Talent
Finally, having identified your desired patterns of behaviors and used your formal organizational tools to influence your informal organization, you need to put the final piece in place – making sure you have the right people performing the actions. Tools and leverage points you might consider are:
- Recruitment
- Selection
- Training (in skills or mindset)
- Performance management
- Changes in leadership personnel (e.g., recruiting a leader from another organization that exemplifies the desired new patterns of behavior)
- Changes in staff (e.g., to demonstrate the kind of patterns of behavior that are desired or that will not be tolerated)
- Skills
- Targets
- Learning and development plans
- Incentives/reward system
Taking action
Here are the steps to take to shift your organization’s culture:
- Define what tasks or patterns of behavior your strategy needs.
- Think through all of the leverage points to identify which are supporting you and which are hindering you.
- Choose a limited number of leverage points you will focus on (we suggest 3-7) and in what sequence.
- Transform!
Photo by Engin Akyurt from Pexels
