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.