Mission; Organisational Culture; Culture in Joint Ventures, Mergers & Acquisitions
What is cultural transformation?
Cultural transformation or culture change means trying to consciously change the present culture to a desired future culture. Present culture is the output of a culture assessment exercise. And when it is viewed against the future business challenges and the strategy, it is possible to know where the gaps are in the cultural framework, and what should we do about them? For instance, if the external environment demands quicker response and the present culture assessment indicates “speed” of decision making and response not exactly an organization’s value, then it is clear this is a gap and demands urgent attention. In this case, it is possible that a hierarchical structure and a tendency to play safe might be the root cause. In many other organizations, becoming more innovative could be the way future culture needs to be shaped, and that might need number of actions related to talent, trust, transparency, tolerance to failures, and rewards.
What is the trigger for cultural transformation?
The trigger is,often, some kind of "existential threat"--"if we don't do something quickly and drastic, our survival might be at stake" sort of thinking. In other cases, the crisis may not be immediately visible but leaders deliberately magnify the early signs so that people take it seriously. In few cases, organization is asked to sharply improve its performance from "business as usual" or decides to do so, which is well above normal trajectory.
What does it entail?
A cultural transformation exercise always addresses business goals to be achieved or a “problem” being solved on a certain timeframe. Its important to recognize that no such transformation is possible without full involvement of the CEO and the senior leadership team.
On one hand, culture assessment tools give a very good starting point for measuring the gaps between the present culture and a desired future culture, and on the other, through qualitative in-depth understanding of business challenges, cultural transformation exercise leads to actions that have the greatest leverage. Since culture change involves number of actions undertaken in harmony across multiple systems, such as recruitment, onboarding, performance management & rewards, organization structure, roles & decision rights, processes, etc., it is important to recognize the interplay of these crucial levers. For instance, changing structure alone is often insufficient as one needs to look at roles, accountability, and performance measurement as well.
Having prioritized actions, it is important to convert each of them into manageable set of initiatives, fixing accountability, agreeing on milestones to measure progress, and very importantly building coalition for change at all levels. A cultural transformation exercise is usually long term, spread over several years, and depending upon the priorities, progress is achieved in phases on several fronts.
What kind of goals do organisations seek in a cultural transformation process?
Typically, organizations seek cultural transformation to achieve variety of goals, such as, reversing lackluster performance, trying to combat emerging competitive threats, seeking a unifying core culture for its various divisions or entities, deriving maximum synergies from acquired or merged entities,or ensuring home characteristics and core values are not lost as it expands into new territories.
How about behaviors in such a process?
For a culture change to take roots, behaviors must change wherever required. Broadly, desirable behaviors need to be strengthened, undesirable ones need to be weeded out, and weak ones but desirable need nurturing and focus. One of the most important driver of such changes is the performance management & reward system.