It’s the rare organization that at some point doesn’t embark on a transformation initiative of some sort. Whether the intended change is about bringing a function into the digital age, fostering a more innovative environment, or becoming an agile enterprise in which everyone meets disruption with a “bring it on” attitude, there’s no shortcut. It takes time, planning, and consistency to have a shot at achieving success and maintaining it once you’ve gotten there.
Much of the talk about organizational transformation seldom gets around to acknowledging that most initiatives don’t effect any change let alone a “transformation” so much as they result in disappointment or straight-up failure.
Among the reasons for this is that too little time is spent examining why we want something to change. And not much energy is devoted to identifying what still works that doesn’t need to be fixed or replaced. This is why we titled i4cp’s latest study Culture Renovation – A Blueprint for Action . Renovation starts with identifying the things about the original that remain strong and can be enhanced rather than starting from scratch.
Released at i4cp’s 2019 conference, Next Practices Now, the study features stories and interviews with leaders from high-performance organizations such as 3M, Microsoft, T-Mobile, Booz Allen Hamilton, Ford Motor Company, and others, with detailed descriptions of the actions required to successfully renovate organizational culture.
The reality of successful culture transformations being the exception rather than the rule is profoundly evident in this study; of the 7,662 respondents who participated (4,110 of whom represented organizations with workforces of >1,000), just 348 from larger employers reported that their organizations’ culture transformation efforts had been successful to a high or very high degree.
Our study focused on the practices of those 348 organizations to determine what they had in common. We wondered what they all did right, which leadership actions translated to successful outcomes, and which of those practices related to better market performance.
But we were also curious about what not to do.
What essential steps were overlooked by those who told us that their initiatives faltered? What are the common miscalculations that resulted in the failure of culture transformation initiatives that started out with the best of intentions?
First: What’s a healthy culture?
Ask ten people to describe a healthy corporate culture and chances are you’ll get a degree of subjectivity depending on whom you ask and what backgrounds and experiences they bring to the conversation.
To benchmark different cultures, we created an index based on six elements that regression analysis of the data shows combine to form the foundation of a healthy culture.
i4cp defines a healthy organizational culture as one in which the following factors are present:
- The work environment brings out the best performance in its employees
- Innovative thinking is nurtured and applied
- Work is highly collaborative
- Execution and accountability are valued
- Everyone is obsessed with delivering value to customers
- Speed-to-market is a high priority
How to be a total failure at leading a culture renovation
No one sets out to fail, but in case you’re one of those naysaying contrarians who delights in the collapse of a poorly executed initiative, here’s your blueprint for guaranteeing that a culture transformation will faceplant:
1. Rely solely on employee engagement surveys to gauge the culture
Run an employee engagement survey once a year (or even better—every other year) and tell everyone that it’s a full and effective measure of your organization’s culture, period.
Nearly nine in 10 (89%) of those surveyed reported the use of their all-employee engagement survey as a mechanism to measure and/or monitor their organizational culture. But i4cp research shows no statistical relationship between using the employee engagement survey for this purpose and the firm’s ability to achieve a healthy culture.
It’s been evident over the last few years that companies are moving away from the annual engagement survey for a variety of reasons: too slow, too cumbersome, too expensive, and not actionable enough. Instead, they are moving to more frequent, rapid, easier methods to gather sentiment, and to analyze it more efficiently and effectively in order to act more quickly. They are also listening across a variety of channels, and using technology to help analyze employee sentiment in real time to act more quickly.
2. Assume that the board of directors doesn’t care about culture data
Don’t talk to the board about culture, ever.
According to the National Association of Corporate Directors, “Boards should set the expectation with management that regular assessments of culture will include qualitative and quantitative information and incorporate data from sources outside the organization.”
Interviews conducted by i4cp revealed a strong desire on the part of senior leaders to revamp how and what is presented to their boards related to culture. This presents a tremendous opportunity for the HR leader to provide valuable, forward-looking guidance to both the organization and its board.
But if you’re intent on failing, keep the boring culture talk out of the boardroom.
3. Make it all about the past rather than the future
Talk a lot about all the failure the organization has experienced and make sure everyone knows that poor past performance is the one and only reason for the culture transformation.
Our research found that the message delivered by the CEO about the reasons why a culture renovation is necessary must be future-focused. Looking in the rear-view mirror and making it all about what didn’t work in the past is not an effective way to move forward.
In organizations that have had successful transformations, leaders communicated a need to reinvent the organization as the primary driver for change (a proactive strategy is much more likely to generate the momentum needed to succeed than a reactive strategy). But to guarantee the strategy is a bust, be sure to dwell on the past.
4. Ignore the skeptics and the energizers equally
When leaders who have no interest in getting onboard with a culture change make themselves known, let it ride. Ignore them. It’s no big deal—they can’t toxify the environment to the extent that the transformation is doomed before it even starts.
And don’t worry about it. No one will blame you. Nobody likes confrontation—it’s much easier to let the defeatists roll their eyes and make snarky comments than it is to ask them to join you offsite for a cup of coffee and a frank conversation about where the organization is headed. It would be great if they could get excited about the new direction, but if not, that’s cool, you can come to an agreement about an amicable separation. Do not have that tough conversation. Don’t ferret out the skeptics; just ignore them and hope for the best.
While you’re at it, be sure to ignore the key influencers who are found at every level of the organization who could help drive a culture renovation. And totally forget about doing an organizational network analysis to help you identify who those influencers are. You don’t need them to help set the tone of the culture change, model the desired behavior, and really get things energized. Nope. Let’s just leave them out of it.
5. Cede the all-important deep work to outside consultants
Pay someone a lot of money to come in and tell you all about where the organization has been, where it is now, and what the future direction should be.
External consultants are frequently brought in to assist, lead, or manage a culture transformation. In fact, 40% of those who participated in this study reported that their organizations used consultants at least to some extent in their transformation initiatives. However, i4cp’s research found that this is more prevalent in lower-performing companies than in high-performance organizations.
True, consultants may bring valuable external perspective and fresh ideas, but too often they don’t truly understand the unique DNA of the organization they’re trying to help, so they offer up ideas or models that ultimately won’t work in the current cultural construct.
6. Keep doing the same things but expect different outcomes
Change is scary—so change nothing. Hang onto the same tired practices no matter how archaic or pointless.
Upwards of seven in 10 organizations that have successfully transformed their cultures indicated they made changes to various talent practices (i.e., development, onboarding, performance management, etc.), in order to reinforce the desired culture.
Of those who reported that their organization's culture transformation was not successful, only two in 10 said the same. This is a significant oversight. Transformation means things must change in order to get there. This can be challenging and sometimes painful. It can also be exhilarating. But the culture of an organization doesn’t evolve simply because the leaders say that they are changing the culture and some nice posters with snappy slogans about change have been tacked to the walls of the employee dining room.
Successful transformation requires a clear plan, distinct action, and vigilant ongoing maintenance. This involves concise and predictable communication, consistent, authentic modeling of desired behaviors by leaders, and an all-hands mentality.
Everyone should own culture transformation, and that starts with a solid foundation that acknowledges the organization's legacy and builds on existing strengths toward a sustainable future.
is i4cp’s Managing Editor & Vice President of Research