The power of cultural transformation

Tackling organisational transformation is never easy and the harsh reality is most efforts only achieve a fraction of the benefits they set out to capture. Many fail outright.

Our research has shown that innovation and technology are raising the stakes even higher, decreasing the lifespan of companies. While fifty years ago, the average lifespan of a Fortune 500 company was around 75 years. Today, it’s less than 15 years – and getting shorter all the time. Organisations must transform to become digitally sustainable if they want to thrive in the digital age.

The challenge of doing (and staying in) business today is great, but it isn’t insurmountable. To successfully transform and achieve digital sustainability, organisations must find alignment in three key areas: culture, strategy and talent.

For many organisations, aligning the culture third of this execution trifecta is elusive. Our research shows that while 72% of executives agree that culture is extremely important to organisational performance, only 32% believe their own organisation’s culture is aligned to its business strategies.

There’s no doubt that success in the digital age hinges on culture. In this environment, organisations must create cultural alignment or risk failure.

Assess. Analyse. Align

Effectively aligning the organisation’s culture to its strategy requires leaders to have a very clear view on what the culture is, versus where it needs to be, and then making changes to bring that alignment into being. Put simply, organisations need to assess, analyse and then align their culture.

  1. Assess
To assess culture, leaders need to first understand and develop a shared language to discuss the critical aspects of culture. Our research has identified five dimensions to describe how organisations operate. These five attributes are the unique cultural themes that define an organisation and can be observed in everyday activities like dominant leadership style/s, communication, decision-making, and customer interaction.

By mapping these patterns - through diagnostics, interviews and focus groups - leaders can build a holistic understanding of their organisation’s cultural loop: how their values shape the culture, how that’s reflected in behaviour, how behaviour is motivated and how that drives culture.

  1. Analyse
In the assessment phase, leaders should zoom in on the critical areas of misalignment between the current and desired cultures. The goal is to identify the aspects that can accelerate or derail the business strategy. In other words, it’s about deciding what the leaders want to preserve and build on versus what needs to change.
  1. Align
With a clear understanding of what needs to change, leaders can implement specific initiatives to realign the organisation’s culture to its business and talent strategies. This doesn’t mean doing everything at once, but rather commiting to the one or two things that will make the biggest difference. Creating alignment in these critical areas first will set the new cultural tone and help future changes stick.

In today’s hyper-competitive environment, when companies have no choice but to move fast, leaders need to pull every available lever to forge a culture that drives the ability to transform. But this doesn’t necessarily mean a complete culture overthrow. Instead, it means understanding what in your culture supports the strategy and what hinders it, preserving what makes your organisation strong and changing what doesn’t.

To learn more, The power of cultural transformation.