Last week we provided two models to help define your organizational culture. Today, we dig into how to successfully lead cultural change.
Leading organizational change is a significant challenge, in fact a recent McKinsey article(1) references a global survey that found “fewer than one in three respondents said their company’s transformation was successful”. These are very low odds for something as critical as a company transformation.
Another Mckinsey article(2) noted that 70% of transformations fail due to culture, which explains why 2 of the 3 ideas McKinsey suggests to improve the odds of transformation success are culture related: Match talent to value, and Mobilize influencers. In short, culture change on its own, or as part of a broader transformational change, can easily go wrong.
Returning to the Harvard Business Review(3) and the MITSloan(4) articles from last week, both propose cultural change processes based on independent research. While the four practices highlighted by Harvard are different from the 8 principles suggested by MITSloan, there are significant similarities in the underlying details of each approach. Our take on the two approaches to leading cultural change, with insights from McKinsey’s transformational change suggestions, are as follows.
Critical Elements for Cultural Change:
- Define and articulate your cultural vision, and be clear why the change is necessary.
- Leaders Drive the change. Find leaders that align with your culture and will drive its creation – this can’t be delegated. A safe environment to experiment with the changes is critical, but it won’t be without some pain – there will be turnover among leaders and others.
- Multi-channel communication & Engagement that involves everyone. Leverage advocates and influencers to drive the change.
- Structure your organization and its systems to align with and support your culture including: Org chart, recruitment, assessment, performance reviews, incentive plans, management, training, development…
- Measure and Reward Cultural Change. Empower managers and change agents to reward actions supporting the new culture in real time.
Successful cultural change requires planning and execution like every other project. Keep your eye on these 5 critical elements, ensure you secure and celebrate some quick wins, but stay in for the long haul as an 18 to 36 month process is typical.
- McKinsey “The science behind transformations: Maximizing value during implementation” (Bucy, Schaninger, Van Akin, Weddle) (https://www.mckinsey.com/business-functions/people-and-organizational-performance/our-insights/the-organization-blog/the-science-behind-transformations-maximizing-value-during-implementation)
- McKinsey “Inside Rishad Premji’s quest to create a high-performing culture at Wipro” (Kadyan) (https://www.mckinsey.com/industries/technology-media-and-telecommunications/our-insights/inside-rishad-premjis-quest-to-create-a-high-performing-culture-at-wipro?cid=other-eml-dre-mip-mck&hlkid=726897b501004045a80126546961881b&hctky=12784786&hdpid=0326be6f-e1ed-4ad8-9e86-39c0d72db434)
- Harvard Business Review “The Leader’s Guide to Corporate Culture” (Groysberg Lee, Price, Cheng) (https://hbr.org/2018/01/the-leaders-guide-to-corporate-culture)
- MITSloan Management Review “Why Every Executive Should Be Focusing on Culture Change Now” (Hollister, Tecosky, Watkins, Wolpert) (https://sloanreview.mit.edu/article/why-every-executive-should-be-focusing-on-culture-change-now/).