LSA Global Insights Newsletter: Changing Corporate Culture: 4 Do's and 3 Don'ts

6.27.2016

Changing Corporate Culture: 4 Do's and 3 Don'ts

One arrow points to the old way; another arrow points to the new way

The importance of organizational culture is getting more press lately.

  • In March, Samsung announced that it was reforming its military-style corporate culture to become more nimble and innovative. To prove that they are serious, Samsung's executives must sign a pledge to move away from a top-down culture and towards a working environment that fosters open dialogue. The driver for the change? Samsung has experienced a rapid decline in smartphone profits and is looking for new areas of growth.  

  • Last September, Volkswagen's emissions controversy prompted their CEO to step down amid accusations of a corporate culture described as "confident, cutthroat, and insular...potentially enabling lawbreaking behavior." The new CEO has promised to change Volkswagen's culture and has started to dismantle the "old hierarchical, bureaucratic and crony-like ways."

  • Last February, widespread reports about scandals, corruption, incompetence and deaths caused the Department of Veterans Affairs to begin to change its rigid and ineffective corporate culture.  
The good news is that leaders are beginning to better understand the important role that culture can play in terms of business performance. We define culture as how things really get done. It includes the way people think, behave and act. Harvard Business School recently reported that culture can account for up to half of the differential in performance between organizations in the same industry. Our own organizational alignment research found that cultural factors account for up to 40% of the difference between high- and low-growth companies. 

The bad news is that changing an entrenched organizational culture is one of the toughest leadership tasks you will face. Aligning the hearts and minds of people is never easy.  

The 4 "Do's" of Changing Corporate Culture
  1. Do Focus on Strategy First
    While it is a bit counter intuitive, if you want to make a change in your organizational culture, you need to start with your corporate strategy. To get behind any cultural change, people must first understand why the change in culture is needed. That means making sure that your business strategy is clear, believable and implementable enough for people to commit to moving forward. 
    Take our strategic clarity assessment to see where you stand

  2. Do Create an Authentic Sense of Urgency
    Instead of just talking about the need for culture change, look for concrete ways to get people to understand and experience the realities that make it imperative. For example, a recent client required their leaders to handle calls from disgruntled customers to understand how they were not fulfilling their brand promise and losing market share. The TV show Undercover Boss also does a nice job of exposing previously unknown business realities that need to change to improve performance. Take our change management assessment to see where you stand.


  3. Do Align Your Culture to Your Strategy
    For a company's strategy to succeed, it must have an enabling and aligned culture. If the beliefs, practices and attitudes are at odds with the corporate strategy, execution and performance will suffer. Too many executives underestimate how much a strategy execution depends on cultural alignment. During a time of cultural change, leaders must clearly outline why a change in culture is necessary, the plan for change, everyone's role in the change and the organizational and personal benefits of making the change.


  4. Do Prioritize and Focus on What Matters Most
    Your organizational culture is either helping or hindering your ability to execute your strategy. And, any culture change requires behavior change - which is difficult. Many people do not change their behavior even in the face of overwhelming evidence. According to the American Cancer Society, 10% of people diagnosed with lung cancer do not stop smoking and more than 80% still smoke daily. According to the American Medical Association, 25% of heart attack and stroke patients do not modify bad lifestyles after a cardiac event. The list goes on and on. So you need to carefully choose and strengthen the critical few behaviors that matter most to create a high performance culture that drive your strategy forward.    


Read about The 3 Don'ts of Changing Corporate Culture

About LSA Global
Founded in 1995, LSA Global is a leading performance consulting and training firm that helps high growth technology, services, and life-science companies create a competitive advantage by powerfully aligning their culture and talent with their strategy. Learn more about getting aligned