The Secret to Changing Organisational Culture

padlock on desk with people working

Organisational or company culture is usually very well established, and changing it can sometimes seem impossible! We have some tips to help you out!

Many people associate company culture with huge organisations like Google, Facebook, and Apple. In recent years it has almost become a synonym for fantastic perks like gourmet cafeterias, fully equipped game rooms, and in-house masseuses. These elements are undeniably part of a company or organisation’s culture but aren’t exclusively what company culture is.

Does your company expect employees to work overtime, be available at all hours inside and out of work? Do people become easily complacent in their positions? Are processes bogged down by an authoritative administration and micromanaging? Anything that defines your organisation’s policies, internal functioning and style of management are part of a company’s culture. Can you implement a cultural shift without a loss of productivity or losing valuable employees? All of this tells you whether changing organisational culture is actually possible!

Why Would You Want To Change Culture

Of course, this is the first question you need to ask yourself. Not only will attempting to change one of the most integral elements of an organisation potentially disrupt productive activities it can also cost you both profit and human capital. Are the behaviours that are widely accepted as the status quo damaging to the organisation or the people that work for you? Has your organisation become a toxic workplace because of these policies?

Remember when committing to an organisational culture change that it involves changing a lot of policies, not a single policy that can be easily changed. You need to have a solid human resources plan in place to facilitate the transition and reformating of many well established and accepted policies.

Something that can help with this type of change is storytelling. Some of the biggest business minds have used storytelling to great effect including Jeff Bezos (founder of Amazon), Steve Jobs (co-founder of Apple) and Sir Richard Branson (founder of Virgin).

A good story can convey a vision, goals, and milestones that need to be achieved when changing your organisational culture. Use examples of companies that pivoted and changed their company’s culture and how they succeeded. Improving not only the company’s value but also their employees' morale.

An excellent example of a successful organisational change that you can use in your storytelling is LivePerson. LivePerson is an online customer service company, based in New York, which was doing extremely well, employing hundreds of individuals making hundreds of millions in revenue. The problem was that a strict hierarchical culture was being used, and the CEO Robert LoCasio was worried that this would be further cemented the bigger the company became. He felt that this culture clashed with the new evolving employment zeitgeist that West Coast tech companies have started to develop.

So he took a page directly from the companies that inspired him, Google, Zappos and other companies that created a fundamental and substantial paradigm shift in human resource management. Instead of the higher tiers of management creating the core values of the company’s culture, he turned to his employees and asked them what they wanted. This strategy is frequently used by Zappos founder and CEO Tony Hsieh to find out how he can improve his company. Zappos success is proof of how effective the strategy is.

An invaluable piece of advice that Hsieh gave LoCasio was that he needed to prepare for the fact that a culture change can be a five-year or even life long commitment.

Commit To the Change

Just like Tony Hsieh’s advice to Robert LoCasio, you need to commit to changing organisational culture. A half-hearted attempt will most likely result in communicational decay, organisational anarchy and further cement the previous culture. Yes, an unsuccessful organisational culture change can result in people stubbornly adhering to the previous system, under the premise that the new system doesn’t work as effectively, or at all. Remember that an organisational change doesn't just have long-term goals, the preliminary work also needs to be scalable.

At the same time, your approach and commitment to an organisational culture change needs to be balanced; you need both long-term and short-term goals and achievable milestones to avoid frustration and potentially disgruntled employees. Once in a while remember to reiterate the core values you and your organisation are seeking to accomplish.

This will not only help morale and motivation, but it will also help keep everyone on the same path. Make sure to allow an open platform for employees or anyone subject to this cultural shift, to be able to express themselves. This feedback loop will be essential to make small adaptations and pivots, ensuring the success of your culture change.

When committing to a culture change, it needs to be done both from the top to bottom and from the bottom to top. Try convincing the most influential individuals in the company (which might also be the most resistant to change) why changing organisational culture is necessary and will be profitable. It will give you the necessary support to pursue the initiatives required to enact a cultural change successfully.

Soft Opening Approach

Many companies choose to have what is called a ‘soft opening’ when launching new products or services. This is essentially a preview of the new products or service to a very specific, small group of people creating a network for easily amendable feedback. Introduce incremental changes that will reflect the greater shifts that you want to enact. Try to see where high amounts of resources are being funnelled, yet yield few results and where good results are coming from a resource-strained area.

Of course, if you are going to do this, you will have to do it within the framework of your final goal or proverbial end game. If you can prove though that these changes yield positive results, then not only will you have the people you helped on your side, you will also most likely also have administration on it too. For example, if you would like to establish a culture which attracts bright young talent, then you could set up something that would be appealing to this specific demographic.

It not only includes actual benefits but intangibles such as Google’s ‘20% time’, which allows employees to develop their own ideas for the company while at work, which promotes initiative, passion and engagement. Another example of non-fiscal rewards is Netflix, which wants employees to deliver high-quality work, regardless of time if an employee is talented enough to yield eight hours of work within two hours, then they can choose to work only those two hours. Netflix also has unlimited vacation days and flexible scheduling.

Implement some of these benefits as a pilot program, to prove its efficacy with the increase in productivity. Increased productivity means increased profit. If you can accomplish a direct correlation between these two items, then your job will be infinitely easier and everyone will be on your side.

Organisational Tools

According to this Forbes article organisational tools can be separated into three distinct sets:

  1. Leadership – Which are for the most part inspirational
  2. Management – Are primarily informational
  3. Power – Primarily used for intimidation

Leadership Tools

  • Vision
  • Storytelling
  • Persuasion
  • Role Modeling

A section of these overlap into management tools and as such are interchangeable between the two (inspirational and informational)

  • Negotiation
  • Strategic Planning
  • Decision Making
  • Learning

Management Tools

  • Tradition – previous metrics and track records
  • Ritual – Essential the current company culture
  • Measurement systems

Much like the overlapping tools above Management and Power tools also have an overlap so they can be used either informationally or as a tool of intimidation.

  • Control Systems
  • Role Definition
  • Operating Procedures
  • Hiring and Firing
  • Disincentives
  • Promotion
  • Training
  • Incentives

Finally the last set of tools a Leader has at their disposal to help make a shift in company culture are the Power Tools. These should be used as an absolute last ditch effort, but at the same time avoided at all costs when possible. Especially when trying to usher in a different system, these tools might actually work against you - creating an unwelcoming, toxic workplace that will band together to reject you and your efforts.

Power Tools

  • Coercion
  • Threats
  • Ultimatums
  • Punishment

In addition to the disclaimer about avoiding the use of Power Tool something else you should keep in mind when committing to an organisational culture change is to use all of the tools available to you. Every leader wants to be an inspirational one, but without hard numbers and solid, tangible proof these new policies will never be embraced.

Serious Pitfalls To Avoid

When making a transition the more variables you add, the more potential there is to fail. Also, multiple metaphorical fronts are something that you should avoid, if you are unfamiliar with the terminology, fronts is a military term that refers to locations of active armed conflict.

You should concentrate on one point initially and not attempt a premature reorganisation. Once you have the groundwork that will allow you to move in a different direction you should act. If you move too soon you will probably create a hostile environment, making an extremely challenging situation more precarious.

The Perfect Example of Organisational Change

A great example of making a substantial shift in a well-established organisation is Robert McNamara and the World Bank. In 1968 McNamara moved from an executive position at Ford to the presidency of the World Bank. At that point in history, the World Bank wasn’t the behemoth it is today. Its success is mainly due to the culture change that McNamara enacted during his 13-year stint with the organisation.

From the beginning, McNamara started slowly shifting the World Bank to a larger scope and scale, by starting with smaller more logistical processes, such as setting up the institution's paperwork to easily project five-year growth (yes paperwork, this was the pre-computer era). When McNamara asked the senior executives of the World Bank to fill in their projections for the next half-decade, they claimed it would be pointless, but McNamara told them that the projections would be useful and he was right.

It is important to note that although McNamara set an upper limit or a precedent per se he also didn’t make it a point of coercion. It was a goal to achieve, but heads wouldn’t roll if they weren’t. His next action was the consolidation of multiple procedures into one concise strategy, to help all departments of the World Bank collaborate, communicate and share goals. It was his organisational changes that allowed the World Bank to become the power player it is today.

All of these actions worked in multiple ways to McNamara’s advantage. First, the five-year projections gave everyone working at the World Bank a clear vision and point of reference for progress. Second, the consolidation of the multiple processes used at the time of his presidency into one universal system allowed both interdepartmental communication and made the entire cultural shift scalable. All of these organisational changes allowed the World Bank to become the power player it is today.

Have you performed a cultural shift in your organisation? Was it successful? What actions did you take to guarantee its success? We would love to hear about your experience, let us know in the comment section below.