Your company culture is a reflection of the way your business operates. So, if there’s an issue in your business that needs fixing, chances are a culture change can help solve it.
It’s why 66 percent of business executives agree that culture is more important to a company’s performance than its strategy or operating model.
However, identifying when your organization needs a culture change and making those changes last is easier said than done. If you want to enact effective and lasting change in your business, you’ve come to the right place—keep reading!
Four signs your company needs a culture transformation
Low employee engagement
Employee engagement is a well-known indicator of a positive company culture. For instance, without a purposeful and cohesive culture it’s easy for workers to lose sight of their organization’s mission and goals.
Culture transformation remains top of mind for many business leaders today. In 2022, Gallup research showed that only 23% of the global workforce was engaged—and another 18% were actively disengaged.
Unfortunately, the behaviors associated with disengaged employees (like poor communication, absenteeism, and complacency) can rub off on others in your workplace, so it’s best to address these issues as soon as you notice them taking hold of your employees.
Lackluster business performance
Most American workers agree that how they feel about their work experience impacts their productivity (70 percent) and ability to do meaningful work (69 percent). So when your organization repeatedly fails to meet business goals, a lackluster culture may be to blame.
If you suspect your culture’s the reason you aren’t meeting your benchmarks, assess whether your company does enough to support employees in doing their best work.
High employee turnover
Despite technological advancements in artificial intelligence and automation, an organization’s people remain its biggest advantage.
To stay competitive, businesses must attract and retain top talent—and maintaining an attractive company culture has become one of the most effective ways to do so. According to one LinkedIn report, company culture is a top priority for 41% of US workers when assessing new job opportunities.
Improve your work experience and culture, and watch your employee retention and recruitment metrics improve along with them.
Excessive resistance to change
As we saw firsthand during the COVID-19 pandemic, successful businesses must be able to adapt quickly. The problem is, people are hardwired to resist change—a trait that can trip up even the most well thought-out change management plans.
The potential consequences of this are too large to ignore. Slow-moving businesses often fall behind their competitors, miss out on crucial opportunities, and can’t keep up with industry breakthroughs.
However, building a culture of innovation and adaptability can minimize the effects of this human behavior. In a report from PwC, 72 percent of executives said their organization’s culture helps drive successful change initiatives.
How do you change an organization’s culture?
If you’re concerned about the state of your work environment, follow these five steps to implement a long-lasting and positive change in your organizational culture.
1. Define your desired culture
You probably already have some ideas of what you want your new culture to look like, so your first step is to formalize this vision and put it into words.
For instance, should employees be empowered and trusted to make their own decisions? Do company leaders and managers encourage transparency and open communication? Would your company benefit from a more customer-focused work environment?
Get input from people at all levels of your organization, and ensure they understand and agree with your vision. You’ll want to be sure your new company values are practical, actionable, and attainable for your work environment and employees. If your culture goals don’t align with your people’s perceptions of the company, you’ll have difficulty getting them onboard with the transformation.
2. Evaluate the current culture
Next, take a look at your current corporate culture to see what you have to work with.
If you aren’t already doing so, you’ll want to measure the different aspects of your organization’s culture with tools like employee surveys and behavior tracking. This gives you a more accurate sense of how your culture operates in real life.
Then, decide what aspects to keep, what to let go, and what to improve to align your culture with your vision. Maybe your communication needs work, but your teamwork is solid. Or perhaps most of your recent employee feedback revolved around your performance management processes, so you want to prioritize it this year.
Don’t forget to assess whether your core values, mission, and long-term goals need a refresh to continue guiding your people in the right direction.
After completing this step, you’ll have a clearer understanding of the work needed to establish your organization’s new identity.
3. Create your culture transformation plan
You don’t embark on a trip without knowing where you’re going. In the same way, you don’t launch a cultural transformation without a strategy and plan in place.
Make this transition as smooth as possible by identifying your culture transformation goals, timeline, and the benchmarks you’ll use to assess your progress. So if you want to create an inclusive company culture, what would success look like? What steps would you need to take to get there? This will help you determine whether your efforts are successful—and if they aren’t, whether you need to adjust your approach or the goals themselves.
Then, communicate your plan to your leadership team and employees before officially launching the initiative.
4. Update your organization’s practices
Successful culture transformation ingrains your new values into your company’s identity and employee experience.
Consider how your company’s updated mission, core values, and culture goals will impact its operations. What changes will you need to make to ensure your systems and processes reflect your new cultural identity? Make sure to think about the following in your assessment:
- Benefits and compensation
- Recruitment strategies
- Hiring and onboarding workflows
- Performance reviews
- Communication and feedback practices
- Learning and development initiatives
Then, update your company’s policies and procedures, as well as your company culture statement and branding, to reflect these changes. Align employee behavior with your new cultural values by recognizing and rewarding actions you want to see more of, and disciplining workers with undesirable behaviors.
5. Monitor and measure the changes you make
The work doesn’t stop after you launch your culture change initiatives, though. You’ll need to evaluate whether your team continues to embody your chosen values on a day-to-day basis.
Measure your work culture regularly with feedback surveys, behavior tracking, and other measurement tools to get a holistic view of your organization’s progress, then make changes to your transformation plan if needed. To reinforce your new cultural identity, consider implementing training programs and other support systems to ensure your vision remains a priority for employees and leaders.
Three challenges of implementing organizational culture change
Culture change is a lengthy process that takes time, patience, and effort, so expect roadblocks and obstacles along the way. But while you can’t plan for every possibility, you can educate yourself on some of the most common obstacles companies face so you can prepare for them accordingly—and perhaps even avoid some of them altogether.
Resistance to change
When you ask employees to change their conduct and attitudes about work, you’ll likely meet resistance—especially when it comes to long-held beliefs or practices. To combat this, give your workforce a reason to adopt the new cultural values.
Research from McKinsey & Company showed that 89% of employees want purpose in their lives, but only 18% get as much purpose as they want from their work.
When you talk to employees about culture change, appeal to this desire to find meaning in their work. Explain why you’re making the changes you are, how these changes will benefit them and the company as a whole, and why their involvement is so crucial for a successful transformation.
Make meaningful connections between your employees and your desired cultural shifts to break down their resistance to these changes.
Not enough employee involvement
As the group that makes the most impact on how your culture develops, getting your employees involved is crucial for a successful culture refresh.
Engage your employees every step of the way by incorporating their participation throughout your culture transformation. Ask them for feedback when you first define your culture, then continue to communicate and ask for input afterward to make sure they agree with the changes that are taking place.
In addition to getting them involved in the process, research shows that taking action on employee feedback brings additional organizational benefits. One survey found that employees who strongly agreed their company takes meaningful action on their feedback were almost three times more likely to be their most productive selves at work.
Essentially, you want to give your workers an opportunity to take ownership of their role in your company’s transformation and get excited about the changes to come.
Lack of support from leadership
As companies scale, executives grow more removed from the rest of their workforce. As a result, they might not see why your culture needs to change in the first place—and may be reluctant to lend their support.
If you don’t get their buy-in, your efforts will be short-lived. Skeptical leaders might withhold the funds you need to make meaningful organizational changes. And if senior executives don’t see this initiative as important, why should your employees?
Similar to your employees, get your leadership team involved by educating them on what culture changes need to be made and why. Then, encourage them to incorporate your ideal cultural values into how they lead your organization. Empower managers to lead their teams by example as well.
Once your employees see that culture transformation is a company-wide priority, they’ll be more likely to get involved too.
Tips and best practices for transforming your workplace culture
Plan for short-term goals and easy wins
Getting your organization onboard with your culture change initiative is a big enough task as it is. Make it easier by setting them up for quick wins early on.
Map out specific goals that will be easy for team members to accomplish in the first few weeks and months of your initiative, then attack them one at a time. When you reach each goal, celebrate the accomplishment and recognize your team’s effort in getting there.
This keeps your organization’s momentum going, prevents employees from getting discouraged or overwhelmed by the changes, and allows them to feel good about their role in the transformation.
Hire people who contribute to the culture—and be ready to fire those who don’t
It’s essential to consider your new cultural values when you bring new people onto your team. Because every person in your organization influences the culture that develops, you must make sure your new hires are a cultural fit for your new identity.
After all, hiring people who aren’t a good fit hurts more than just your culture. A bad hire can cost a business up to 30% of the employee’s annual income.
At the same time, you also need to identify if toxic employees are undermining your organization’s progress. Disruptive employees act out for a reason, so try to understand why they behave the way they do. See if there’s anything your company can do to correct the situation. If nothing changes, though, you need to be prepared to let them go.
Stick to your plan, even when things get tough. Otherwise, your employees will see you’re not serious about it, and they’ll take that to heart.
Expect change to take time
Effective culture change takes time, so be patient. Allow employees to get familiar with the changes before deciding whether your efforts are successful. Implementing new values, behaviors, and processes gradually will help get them aligned with your envisioned culture and set them up for success.
With the right support systems in place, you can expect the changes you enact now to be the foundation of your organization’s identity for years to come.
Is it easy to change company culture?
Transforming company culture isn’t easy, but it’s worth the effort.
As the gatekeepers of organizational culture, HR leaders must take the initiative if they want their efforts to succeed. Your people may be the ones who transform your cultural vision into reality, but you’re accountable for the vision and the processes that guide them.