Culture Transformation: The Leader’s Role in Shaping Culture

With culture at the top of the agenda for many organisations, it’s important to understand what culture is, the role top leaders play and the best way to activate change.

WHAT IS CULTURE?

Culture is either a CEO’s greatest asset or biggest liability, yet it isn’t visible or recorded so it can be hard to define. Some people believe consistent behaviour patterns define culture, but these are not the extent of culture. They are responses to expectations – enabled by processes, capabilities and rewards – which support culture. Others think the CEO creates culture.

A leader’s beliefs and attitudes certainly influence behaviours. But are they causing systemic change or using power to temporarily modify behaviour? Often, employees appear to take on new expectations with a new CEO, yet the underlying culture remains the same. An example is Australian culture, which hasn’t fundamentally changed during the past decade despite a revolving door of prime ministers.

I prefer the classic definition of corporate culture: an organisation’s underlying beliefs, assumptions, and accepted norms that shape its people’s behaviours. This makes it clear that culture is about people and how they choose to behave collectively and individually. It’s not about processes or one person’s influence.

Creating an enriched, high-performing culture requires the collective leadership to activate their organisation’s people to shape the environment and create the norms within.

WHAT ROLE DOES THE CEO PLAY?

The ability to lead cultural change is a big tick for executives, and CEOs often claim responsibility for total cultural transformation. But in reality, this takes more than driving limited behaviour modification through job designs, processes and incentives. Culture transformation involves influencing the mindset, beliefs and behaviours of leaders and their people.

Every person is free to act as they choose, regardless of organisational levers, so it’s an enormous challenge. Think about the difficulty of changing ingrained behaviours such as self-doubt or bad habits in one person. Now multiply that by the number of people in your company.

THE SCALE MEANS 2 THINGS FOR CEOS.

• Cultural change- Depends on influencing en masse, so it’s important to activate leaders to be a coalition of the willing across the entire organisation, not just one or a few at the top.

• Cultural transformation- Is a lengthy, complex and disruptive process. At around 5 years, it’s beyond the average CEO’s tenure, and a big ask for someone whose performance is judged by year-on-year results. That’s why so many ‘transformed’ organisations have not changed at their core. Leading genuine, organisation-wide transformation requires someone who can see beyond mid-term pressures and design for the future.

The bottom line is that ignoring a broken culture hinders growth by rejecting the improved retention, productivity and other proven business benefits of incremental change. By taking a strategic approach and making the journey as important as the destination, even the most risk-averse CEO can become a genuine change activist.

CEOS MUST-HAVES FOR SUCCESSFUL CULTURE CHANGE

• Compelling vision- The vision, and the story and behaviours that support it, must be specific to your organisation and the desired culture, not borrowed from elsewhere.

• Purpose- Do the work to understand your own purpose. This builds the right levels of conviction, connects you with the corporate vision and values, and provides the clarity, focus and stamina to bring people through disruptive times.

• Well-defined behaviours- Your people need to know what good looks like. Unfortunately, many values-sets look similar, so your organisation’s need to be differentiated, consistently communicated and linked to real-life examples.

• Holistic approach- The only way to drive real change is to reconfigure every stage of the employee lifecycle, from who is hired to who is fired. And ensure supporting structures cultivate the right culture. A dynamic, agile, entrepreneurial culture won’t thrive with over-engineered control systems and processes.

• Authentic communication- Use every opportunity to underline the importance of behaviour change. Try using story-telling and personal insights to take employees on the journey with you.

• Comprehensive change activation- Commitment to change must go deeper than the C-suite. Work through your leaders and bright spots to create a coalition of cultural activists who model and support preferred behaviours.

• Visibility and accountability- Encourage leader-led change management with a framework of behaviour-based KPIs, career development plans and incentive schemes.