Summary: "Why Every Executive Should Be Focusing on Culture Change Now"
According to a Boston Consulting Group study, companies that focused on culture were five times more likely to achieve digital transformation results than those that didn’t. In this MIT Sloan Management Review article, authors Rose Hollister, Kathryn Tecosky, Michael Watkins, and Cindy Wolpert explore the importance of understanding the connection between business transformation and culture change.
The pandemic accelerated three types of transformation affecting every industry:
• The adoption of digital technologies
• The development of new business models
• The Implementation of new ways of working
Highlights of the article:
• What is Organizational Culture?
A shared set of values (what we care about), beliefs (what we believe to be true), and norms of behavior (how we do things). A strong culture is essential for a company’s overall health and competitiveness.
• How Does Culture Need to Change to Support Transformation?
Leaders must adjust for specific contexts in which their organizations operate. The seven elements of adaptive culture of businesses that have transformed successfully:
1. Customer centricity
2. Ecosystem focus
3. Analytical orientation
4. Collaborative reflex
5. Bias to action
6. Learning mindset
7. Leader as enabler
These elements are unlikely to be all equally important for each organization but are relevant to some degree. First, start with assessing your organization’s current culture, then think about the relative importance of these elements for your organization’s future and identify the cultural gaps.
• How Do You Change Culture?
Recognize that culture change is hard work. Some culture transformation principles that maximize the likelihood of success:
1. Recognize that responsibility for culture can’t be delegated
2. Start with the “why”
3. Define the target cultural values and behaviors
4. Engage and get input
5. Build a bridge for the future desired culture
6. Build a culture road map
7. Reinforce the desired culture in all organizational systems
8. Rapidly reward the emerging culture
While cultural transformation can be challenging, it is highly possible by following a model for success, marshaling the right executive support, ensuring proper clarity and focus, and recognizing and rewarding desired behaviors.