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        Cultural Transformation

Why change?

Change is a reality of life. With rapidly changing external environment--new technologies including AI, new nimble competitors, changing customer expectations, shifting employee attitudes, climate change, new regulations, etc., if an organization does not change with time, its future is probably under threat . According to a recent PwC survey, 45% of the CEOs are not confident that their companies would survive for more than a decade on their current path. Thus change or business transformation often starts with a realization that the organization needs a new strategy, a new way of working going forward, to protect its hard-earned present day wins as well as carve out a winning future. Sometimes. its sub-par performance that forces an introspection, at times the competitor's progress is threatening, or there may be a deep desire to break away from a historical growth pattern. There are also imperatives like "becoming more innovative", or "digital transformation or embedding AI", or "restructuring to balance cost structure", or "getting prepared to enter into new markets", that force an organization to change the way it has been functioning.

Culture change/Cultural transformation as a part of Business transformation

Cultural transformation is almost always one key dimension of any change/business transformation. When any part of business undergoes a significant change, ways of working and behaviors also critically need to change. While it is easy to relate to changes that are more tangible like the organizational structure, roles & responsibilities, and processes, leaders often grapple with the issue "How to change the mindset and the behaviors?" 

From a cultural perspective, clearly there are two states: one, the "present culture", and the second, a "desired culture". The journey from "present" to "desired" is the objective of cultural transformation. It entails revisiting mission, deeply examining the "mindset" issues, the values and the associated behaviors. And how do we accomplish that? Firstly, mindset issues are a direct reflection of CEO's and senior leaders' own belief system, and thus need deep introspection. Visioning and communicating "why change" are next crucial steps. Then by systematically identifying the behavioral hurdles and correcting them through change levers like the HR processes besides more tangible elements, such as, the organization structure, roles & responsibilities, or people/talent leads to desired changes. At a more granular level, day to day work-mechanisms, coordination and decision-making systems also need to change.  

Note business changes and cultural changes go hand-in-hand.

Is there an element of quantification in this exercise? How much time does a cultural transformation program take?

Some culture assessment methodologies like OCAI provide data for both the "present culture" and the "desired culture" in a single survey. Thus there is a chance to analyze what the organization thinks about the future? In others like Denison, you get an assessment of only the present culture and then it is supplemented through qualitative discussions about the desired culture. In both the cases, an organization can conduct periodic surveys to measure the progress.

Cultural transformation is a multi-year process--each year, building onto the change already achieved in the previous year(s). You must consider this against two facts: one, business transformation itself takes time, and two, culture is relatively difficult to change. Behavioral changes are always gradual, often calibrated to an organization's ability to change. 

One measure of success of a transformation program is evidence of hard business results (e.g. revenue and its distribution, growth, price premium and market share, customer satisfaction, profitability) including indices related to quality, productivity, employee pride and satisfaction. 

We believe, truth should be known to you that there is no general "change formula" although learnings from other successful change programs can be applied. Each organization's context is unique and so are its challenges. At best, there are some guiding steps that help move from intention to results. There is a huge role of leadership in any change process. Right Culture shares with its clients selective scholarly work on "change" as well as relevant in-depth cases from leading companies against the backdrop of its culture assessment scores/findings, to stimulate thinking. A collective wisdom must lead the way forward.

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