The path to successful cultural transformation
From analysis to implementation: we help you on the path to successful cultural transformation
Corporate culture is a driver of economic success and ensures that both the competitiveness and the economic success of the company are secured in the long term. However, existing corporate cultures that have grown over years or decades and have never been adapted or have only been adapted slightly are often no longer suitable for new requirements such as the agile and digital world. A cultural transformation is therefore required to ensure the continued existence of the company. But what is corporate culture anyway, what does cultural change mean for an organisation and how can cultural transformation be implemented and anchored in the company in the long term?
What is corporate culture?
Corporate culture refers to the system of values and norms as well as the convictions that characterise an organisation. It is therefore the collective memory of the company. Corporate culture includes both visible elements such as symbols and formal structures as well as deeply rooted aspects such as routines, rituals, shared ways of thinking, beliefs and convictions. Depending on its characteristics, corporate culture can therefore promote or weaken cohesion within the company and provide guidance on how to deal with tasks, challenges and crises.
How does corporate culture develop?
Corporate culture arises from the shared beliefs, values and norms that are developed and consolidated by the members of an organisation over time. In the course of its history, an organisation makes certain (learning) experiences and determines which actions have positive or negative consequences. Over the course of months, years or decades, the organisation is constantly faced with new challenges or crises that require the corporate culture to change dynamically and adapt to changing circumstances.
How can corporate culture be anchored?
Establishing a corporate culture within an organisation requires routines that are supported and stabilised by formal structures. Corporate culture is therefore always an active endeavour that needs to be supported and continuously developed.
How do cultural changes occur in an organisation?
A genuine cultural change requires a critical mass to support and sustain the change. As corporate culture often develops unconsciously, a change can only work if enough employees actively participate in the change and there are strong structures in place to prevent a relapse into old patterns of behaviour. Successful cultural change requires patience, perseverance and commitment from everyone involved.
Cultural transformation as the basis for lasting success
Cultural transformation refers to the process by which organisations systematically and purposefully change their corporate culture. This is by no means just about superficial adjustments. Rather, the aim is to bring about far-reaching changes in values, beliefs and behaviour that will make the company competitive in the long term. Advancing digitalisation and constantly changing markets and market conditions act as dynamic drivers that make it necessary to break up existing cultures so that companies can fully exploit their innovative potential.
Goals of cultural transformation
The objectives of a cultural transformation are diverse, but are primarily aimed at shaping the corporate culture in such a way that it supports the long-term success of the company. One of the central objectives is to establish a culture that promotes innovation as well as agility and collaboration in order to increase the organisation's adaptability. At the same time, however, the transformation should also motivate employees to identify more strongly with the company and its values and goals. A strong corporate culture and shared values lead to greater commitment and better work performance, which in turn is reflected in excellent products and services. In addition, a cultural transformation helps to adapt the corporate culture to the current and future requirements of the market and, in the best case, to secure competitive advantages.
What are the challenges of cultural change?
Genuine cultural change is never a linear process. Rather, sustainable cultural change requires regular management and adjustment. The biggest challenges here include resistance within the workforce resulting from insecurities, habits or a lack of understanding of the need for change. At the same time, it is difficult to break existing behavioural patterns, as these are often deeply rooted. In order to solve these problems, it is necessary to integrate and support not only individual teams or managers, but all employees in the change process. Without clear communication, transparent rollouts, visible role models and a systematic anchoring of structures within the organisation, there is a risk that the change process will stall or that the changes will remain superficial.
Are there occasions that make a cultural transformation unavoidable?
There are a number of indications that the corporate culture needs to change. The causes can be categorised into internal and external performance gaps, personnel and structural changes and overarching crises. Some concrete examples of the need for action are
- Declining employee satisfaction
- Lack of innovative capacity
- Compliance violations
- Demographic change
- New management board or restructuring
- Unexpected events such as the corona crisis
The above list is not exhaustive, but shows the heterogeneous landscape of events that can trigger a cultural transformation.
What needs to be considered during cultural transformation?
Transformation is always an overarching process that cannot be achieved through a single, detached measure. The focus of a change in corporate culture is therefore on the interplay of routines, rituals, structures, processes and governance, which influence each other and therefore need to be harmonised. However, beliefs, values and norms also need to change, as they shape the way work is done, how employees interact with each other and how the company presents itself to the outside world.
How can cultural change be implemented sustainably within a company?
The sustainable implementation of cultural change in a company is based on classic change processes and usually comprises three phases, which vary in length.
Phase 1: Initialisation
In this phase, the first small-scale changes are initiated. Success factors for this phase are credible role models and a clear vision of the future corporate culture. Visible successes that demonstrate the project's lighthouses also play a key role. The recruitment of strong and authentic advocates and the expansion of this group are also essential components of this phase.
Phase 2: Mobilisation
The second phase is called mobilisation and focuses on increasing reach in order to drive cultural transformation within the company. At this point, it is important to reach a critical mass that supports the changes and lives them anew in the company every day. This is the only way to ensure that changes become established in the company in the long term.
Phase 3: Institutionalisation
In the final phase, known as institutionalisation, the changes are anchored in the company. The aim here is to re-examine existing structures for compatibility with the new ways of thinking, behavioural patterns and beliefs and to make any necessary adaptations.
Cultural change as a lever for more profitable growth
The model implementation of a cultural transformation in a company
The transformation of an existing culture into a constructive corporate culture is a lengthy process that encompasses not only the hard factors, but also the soft factors and invisible elements. For this reason, a successful cultural transformation requires comprehensive consideration and change on several levels. In addition to reviewing and adapting structures, governance, processes & systems as well as routines, rituals & symbols, beliefs, values & norms within the organisation must also be realigned in order to achieve the greatest possible acceptance.
The initialisation phase in detail
In order to initiate change, a moderated discussion of existing beliefs is required. This is the only way to recognise existing thought patterns, question them and replace them with new beliefs. At the same time, however, it is also important to identify obstructive framework conditions and adapt them to the new culture. In order to maintain and continue the process, the new beliefs and initial successes resulting from the change must be communicated transparently and comprehensively within the organisation. This approach motivates and inspires others to actively participate in the change process.
Phase 2 of mobilisation in detail
Once the initial foundations have been laid, the new beliefs can be rolled out across the organisation via the management line. The focus here is on rituals and routines that are strategically integrated into the individual projects and day-to-day processes. Here too, it is important to publicise new successes in order to generate mass support for the changes. This strengthens and accelerates the acceptance of the innovations and at the same time reduces frustration and resistance, which occur naturally in any change process and need to be managed professionally.
Phase 3 of institutionalisation in detail
The final phase of institutionalisation focuses on dovetailing the changes with the business model, the brand and the employer value proposition (EVP). At the same time, the process must continue to be actively supported and trust in the changes must be continuously strengthened among both customers and employees. Any structural or procedural dissonances that still stand in the way of the new corporate culture must now also be finally adapted and implemented in this phase. To ensure that the change remains firmly anchored in the corporate culture in the future, the topic of culture must also be permanently anchored and positioned in the organisational unit.
What factors have a positive influence on cultural transformation?
Cultural transformation, as the main driver of economic success, requires systematic and structured planning as well as energy and perseverance. Comprehensive effects and success often only become apparent after up to five years, which is why sustainable implementation is one of the most decisive success factors. Support from an external team of experts can also be a key factor here, providing objective guidance during the transformation process and helping to overcome old patterns and find a stable balance.
Charismatic storytellers
If possible, the option of a charismatic storyteller at board level should be utilised. This person can communicate the vision on which the cultural transformation is based to the general public and, if necessary, confidently address and dispel fears or concerns. In addition, complex ideas can be transformed into understandable and motivating stories that inspire the entire organisation and create a desire to create a new corporate culture in which the focus is on working together.
Authentic role models
Respected and authentic leaders have a strong influence on the success or failure of a cultural change. In the best case scenario, however, these people not only act as role models, but also receive backing from the PMO and assistance in order to coordinate and carry out operational tasks efficiently. In this way, authentic role models can fulfil their responsibilities and at the same time ensure that the change processes run smoothly.
Transparent and concrete rollout planning
A clear and transparently communicated rollout logic is essential in order to drive the changes forward in a structured manner. It is important to differentiate between functional, regional and hierarchical aspects in order to find the best method for each individual target group. So-called stage gates, which act as milestones, also make it possible to monitor progress and ensure that all changes are implemented synchronously and effectively.
Strong project team
A strong and heterogeneous project team is the key to ensuring that the cultural work is not only launched, but also successfully implemented in the long term. Continuous training and extensive support from the management level enable the team to actively drive change and shape the culture in a sustainable and positive way. The project team is also responsible for spreading and further developing the transformation within the company once it has been initialised.
Risks associated with cultural transformation
Like any other project, cultural transformation is also fraught with risks. However, many of the risks can be identified and specifically addressed in advance so that they can be managed and controlled.
Resistance within the organisation
Change is almost always met with scepticism and resistance. In particular, employees who do not understand the need for change or who cannot identify with the new values have a high potential to put up resistance. This can significantly delay implementation and therefore jeopardise the achievement of strategic goals. It is therefore of central importance to identify these employees and convince them through dialogue and success that the change is also positive for them.
Superficiality instead of real change
If the transformation only consists of symbolic actions, it risks being perceived as a superficial measure. Without far-reaching changes in structures and behaviour, long-term success and therefore also positive changes will fail to materialise.
Excessive demands on employees
Too rapid or insufficiently supported change can lead to excessive demands and uncertainty among employees. A lack of orientation or insufficient support during the process have a strong influence and increase the risk of the transformation failing.
Conclusion
A change in corporate culture requires continuous commitment and staying power. Cultural transformations can take up to five years before truly measurable results are achieved. The smart utilisation of synergy effects and the integration of agility into the entire process help to drive the process forward more quickly and establish it within the company. However, without a top team as a role model and long-term ownership, the changes run the risk of quickly fizzling out. Support from an external team of experienced experts can have a positive supportive effect during changes so that the transformation is actively implemented and lived even if the company reduces its energy and focus on the corporate culture in the short term due to bottlenecks or crises and directs it to other areas.
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