Cultural issues are known to have thwarted seemingly excellent strategies in all kinds of industries around the world. Therefore, more and more executives tend to understand that a successful implementation of a company’s strategy requires that it is aligned with the firm’s corporate culture, in addition to a number of otherwise crucial tangible prerequisites. In other words, if the prevailing culture is a stumbling block for the implementation of the strategy, then at least one of them needs to change for the incompatibility to be eliminated.

Assuming that the strategy must remain intact, the question is: what can a leader do to cause a lasting change in a company’s culture? (To avoid semantic confusion, lets’ use Kotter’s definition whereby “Culture consists of group norms of behavior and the underlying shared values that help keep those norms in place”). This task can be tackled in a variety of ways. Easier said than done, that’s for sure, as illustrated by countless failure stories. For this reason, and because it is best to learn from the mistakes of others, it is worth starting by going over some of the worst and most rampant errors (the dont’s), such as those the following scenario abounds in.

Step 1: company executives decide that the culture needs to change. Characteristically, and particularly in hierarchical organizations, it is often not even their own conclusion but an insight given to them by their own superiors (typical for multinationals) or by an external HR consulting company hired to conduct the study. While the latter approach may be a well-intentioned attempt to obtain an objective assessment, it may backfire. Namely, if the executives were genuinely interested in what their people think and are driven by, then they would have figured out most of the cultural issues themselves a long time before, it could be argued. However, employees in hierarchical organizations are rarely incentivized to offer candid feedback to their superiors and are rarely asked for feedback at all.

Step 2: a new culture is “invented” and its principles are written down. The process of invention may involve surveying a sample of the staff, to add credibility to the final product and create buy-in in the rest of the staff, or (think hierarchy) just asking the executives for their input. Regardless, the final conclusions surprisingly often seem to have been predetermined before. What usually results is a collection of non-controversial slogans and buzzwords, typically enriched with some fancy graphic elements.

Step 3: the new better culture is officially presented. This step may involve an event culminating with the announcement of the new culture to the middle management and rank and file. With or without the blows and whistles, other channels typically used for spreading the news are email, the company intranet website, as well as posters hung on the office walls containing the key slogans and buzzwords, and (of course) the fanciest of the graphics.

Needless to say, this approach is bound to fail and produce detrimental side effects in the process, such as staff frustration, increasing cynicism, and loss of confidence in the company leadership. While intangible and hard to quantify, they are particularly damaging to the firm, especially long term. For one thing, they will result in decreased motivation across board, which will sooner or later be reflected in the productivity and eventually in the firm’s P&L. For another, they will act as an exit incentive for top performers, who, while giving to the firm a lot more than the average employee, tend to be more demanding and critical than others, and – obviously – find it easier than others to receive a job offer from another company. In the era of the war for talent, such a self-inflicted loss when nothing is gained in return is particularly inexcusable.

Tagged: corporate culture, executives, hierarchical organizations