How To Change Your Organizational Culture

The first step is defining what values and behaviors you’re seeking.

By Christina Folz Sep 22, 2016
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Former GE CEO Jack Welch once famously said, “The soft stuff is the hard stuff.” The business adage rings true for HR professionals trying to initiate culture change in their organizations. 

“I know a lot of people think culture is a mushy, fuzzy concept,” says Norm Sabapathy, executive vice president of people at Cadillac Fairview Corp., an owner and operator of commercial real estate in Toronto. “But, increasingly, research is showing that people really do care about culture.” 

So much so, in fact, that senior executives are finally starting to pay attention—which presents a tremendous leadership opportunity for HR, Sabapathy says. The notion of “culture,” loosely defined as the beliefs and behaviors that govern how people act in an organization, emerged in the 1980s and is now believed to be a major determinant of a company’s success or failure. Companies on Fortune’s list of the best places to work—known for their strong cultures—have stock performance that is double that of other organizations. 

Culture is considered a potential competitive advantage by 82 percent of more than 7,000 CEOs and HR leaders from 130 countries, according to the Deloitte Global Human Capital Trends 2016 report. Yet only 28 percent of the Deloitte survey respondents believe they understand their culture well, and only 19 percent believe they have the “right culture.”

To help, Sabapathy provides 10 tips for driving a culture change:

1. Define desired values and behaviors. Do people understand them and how they relate to day-to-day behavior? Come up with behavioral descriptors for each value you define and articulate how those would translate into actionable behaviors at all levels—from secretaries to middle managers to executives, Sabapathy advises.

2. Align culture with strategy and processes.  Do your mission, vision and values line up with your HR processes, including hiring, performance management, compensation, benefits and the promotion of talent? 

3. Connect culture and accountability. It is easy, particularly in difficult times, to forget the values you set in place to define your company, he says, citing Enron and WorldCom as examples. However, companies have a better chance at weathering disaster if they take responsibility for their actions, Sabapathy says. 

4. Have visible proponents. For culture change to stick, it must be a priority of the CEO and board of directors. “Show the board a framework for understanding organizational culture and its impact on performance,” Sabapathy says. Work with the board to create a standing performance objective for the CEO that evaluates culture.

5. Define the non-negotiables. When contemplating a culture change, look at your current culture and call out which aspects you want to retain. Determining what’s not up for debate is particularly important during mergers and acquisitions, when leaders of two or more organizations must figure out how to blend identities.

6. Align your culture with your brand. Culture must resonate with both employees and the marketplace. To accomplish this, HR increasingly is partnering with marketing, he says. This is especially relevant in our current online world, where today’s bad customer experience can become tomorrow’s viral sensation.

7. Measure your efforts. Help demonstrate the effectiveness of your efforts by implementing employee surveys and analyzing gaps between desired and actual behavior.

8. Don’t rush it. Changing a culture can take anywhere from months to several years. Start by making sure there’s a clear rationale for why the company should change, he advises. 

9. Invest now. Don’t wait for staff and resources that may never come. “It takes years of investment to get to that point where [your culture] just automatically becomes part of how you behave and act,” so begin whatever way you can. 

10. Be bold and lead. You don’t have to be in a position of influence to have influence. “When we step up, it encourages others to step up as well,” he says.  

Christina Folz is the editor of HR Magazine.

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