Managing culture change for your organization
How do you manage culture change in an organization?
You manage culture change by naming a clear reason for it, getting leaders to model the shift, setting new rules around accountability, and giving people a safe way to adapt over time.
- Start with a clear reason, such as new leadership, poor results, or fast growth.
- Get leaders to act out the new values first, not just talk about them.
- Back the change with new policies and a safe, open environment.
Changes in business structure, leadership, technology, and culture happen all the time. So firms must adapt and realign to keep up with a shifting market.
One tricky shift is a culture change. It rests on human values and behaviors. These vary from person to person, and many factors shape them.
Setting up a new machine is simple by comparison. Culture work is more complex, yet it brings deeper, long-term gains.
This article explains organizational culture change and why it happens. In turn, it will help you set one up for your own company, group, or team.
What is a culture change in an organization?
A culture change, or cultural transformation, realigns an organization’s internal practices, views, and approaches. Often, it responds to an observed shift. That shift can be external, like social or economic conditions. It can also be internal, like a change in goals or key people.
A cultural transformation is usually a major effort. So it needs everyone to pull together to work. For example, a 2021 Global Culture Survey of over 3,000 workers and executives found that 72% of respondents link company culture with successful initiatives.
Still, a common myth says culture change always moves from bad habits to good ones. That is not quite right.
Sometimes a good culture simply no longer fits its environment. So the task is to reposition the organization to meet new targets and needs. A strong high-performance culture still needs to match where the company is going.
One clear past example came when the global coronavirus pandemic reshaped how people worked. Many companies moved to remote or hybrid setups.
As a result, employees had to learn new tools. They also had to balance work and home life. In addition, they had to own their tasks away from the office. This is why many teams now invest in a healthy remote work culture.
Reasons for initiating a culture change in the workplace
Cultural transformation does not come from nowhere. Usually, there is a strong reason behind it. Often, the company’s survival or growth is at stake.
Maybe you need to justify your plans or find real-world precedents. If so, read on for common reasons to start a culture change at work.
New leadership
New people at the top are one of the most common triggers. Leaders and visionaries often arrive when one leaves, or when the organization enters a new age.
In turn, new leaders are free to bring their vision to life. In most cases, the shift starts with the new leader. Then a transition team forms around them. Here, modern leadership and clear communication help bring everyone on board.
Perhaps the best-known example is Steve Jobs and Apple. Jobs left Apple in 1985 and returned in 1996, with stock prices sinking. He refocused the firm on core products. More importantly, he rebuilt the brand’s image as a hip tech name.
His legacy stays polarized. Even so, Apple became a model of cross-functional collaboration, mostly focused on bringing Jobs’ vision to life.
Address poor organizational performance
Business performance shows up in many metrics, from revenue to customer retention. Once these KPIs start to slip, leaders look for the root cause. Then they try to fix it. Tracking organizational performance often reveals where the culture has drifted.
The cause may be old equipment or clumsy processes. In some cases, the culture is out of touch with customers. As a result, the company cannot meet client needs, and the business suffers.
Car maker Chrysler was in deep trouble in the early 1980s. Lee Iacocca, freshly out of Ford, joined rival Chrysler to save it from bankruptcy.
He pleaded with Congress for a $1.5 billion loan. He also launched huge, company-wide changes.
To rebuild trust, Iacocca downgraded his salary to $1 a year. In effect, this overturned the old “everything for me, nothing for Chrysler” culture.
He also reshuffled leadership. So the firm moved from separate departments into one unified structure. The company turned profitable in 1982 and repaid its loans in three years. It stayed strong until Iacocca retired in 1992. Later, Chrysler went bankrupt in 2009 and was bought by Fiat in 2011.
Curb an existing toxic culture
Sometimes a business still brings in steady revenue. Even so, problems can lurk inside it. For example, there may be delinquency at work or rising attrition.
This is common in high-pressure settings. There, the push to deliver can crowd out a healthy work environment.
A 2023 Fortune survey found that 64% of employees had faced a toxic workplace. In addition, 44% blamed leadership.
These cases can look hopeless. Still, experts say you can fix them without wiping the slate clean. An article from Forbes outlines four ways to overturn an existing toxic culture, shown below.
Accept responsibility
First, recognize that the problem exists. Repairing a toxic work culture starts at the top. So leaders should take charge instead of pointing fingers.
Seek external help
You cannot solve a problem with the same mindset that created it. So bring in a third-party coordinator or corporate coach. They add fresh views and proven best practices. In turn, they can shape a culture change plan that fits your needs.
Outline new policies driven by accountability
Willingness alone is not enough. You also need ground rules that codify the change. For example, new policies should break down power structures that sideline your people. In addition, bringing accountability to every level lifts everyone’s involvement.
Cultivating a safe environment
In theory, whistleblowing brings justice to work. In reality, it often does not. So a safe way to report issues matters, above all in less transparent parts of the business.
It also helps to value everyone. From senior managers to frontline staff, their ideas should always have a place to be heard. This kind of openness feeds steady employee engagement.
Expansion
A growing company meets new risks, like sailing in uncharted waters. The culture that worked in the local or startup phase may not fit once the firm goes public or serves global markets. In these moments, strong culture fit keeps new hires aligned.
LinkedIn co-founder Reid Hoffman named five stages of growth firms can use as a guide. He compared a company to a social group. Each stage, he said, calls for a culture change.
| Stage | Size |
| Family | 1 to 9 employees |
| Tribe | 10 to 99 employees |
| Village | Hundreds of employees |
| City | Thousands of employees |
| Nation | Tens of thousands of employees |
As Hoffman’s example shows, growth adds more departments and people. So you must scale business practices and management methods. To keep things manageable, the culture should always fit the size of the organization.
Inspire a positive change in your workplace today
A culture change is a major undertaking. So it must fit the business’s own needs and future goals.
More importantly, pin down where the effort comes from. In turn, that clarity sets the direction it will take.
Done well, the effort pays off across the organization. Not only does it improve the employee experience, but it also helps the firm meet changing demands.
Frequently asked questions about culture change
How long does a culture change take?
Most culture changes take months, and often a year or more. Values shift slowly, because people need time to trust the new way. So steady habits matter more than quick wins.
Who should lead a culture change?
Leaders must drive it from the top. Still, managers and staff shape it every day. So the best results come when every level owns a part of the change.
How do you measure a culture change?
Watch both soft and hard signals. For example, track engagement scores, attrition, and feedback. In addition, check KPIs like retention and productivity over time.
What is the biggest barrier to culture change?
Resistance is the main hurdle. People often cling to old routines. So clear communication, quick wins, and visible leader support help ease the shift.
Can a small team change its culture?
Yes, small teams can shift culture faster than large ones. Fewer people means fewer habits to reset. So a small team can test new norms and scale them later.
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