Organizational Culture: The Real Reason Transformation Fails

Successful transformation requires deliberate attention to detail and meticulous planning. And that begins with a frank, unblinking assessment of culture.

Michael Haid
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Aerial view of colorful freight trains on the railway station
A new generation of machines—and machine learning—may be driving workforce transformation. But make no mistake about it, organizational culture will determine whether that transformation is successful.

Far too often, organizations overlook issues of culture when tackling a transformation challenge. The focus is almost always on the new shiny penny—digital technology, artificial intelligence, applications of machine learning—the things that will ultimately change how and what we do in the workplace.

But what about an organization’s capacity to absorb transformational change? Are leaders prepared to take the point on transformation? Do employees have the mindset and agility to dedicate themselves to a whole new approach to work? 

In a recent survey of senior HR leaders conducted by LHH in partnership with HR.com, we identified the most common external drivers of workforce transformation. Not surprisingly, 70 percent of respondents said that advances in digital technology are triggering the need to re-imagine workforces. However, the focus shifted from machines to culture as soon as we asked about the forces that work against a successful transformation.

In fact, 54 percent of respondents cited culture as the single biggest barrier to a successful transformation. To really appreciate that figure, and why it may be the single greatest insight into transformation initiatives, we need to do a deep dive into what we mean by culture.

Organizational culture is made up of the beliefs, behaviors and attitudes of employees across the business and at all levels of hierarchy. An organization demonstrates its culture through how work gets done, how priorities are established and how people work with each other.

Good organizational culture is evident through the accountability of leaders and the clarity with which they communicate organizational expectations, as well as the enthusiasm with which employees execute on those expectations. You find positive cultures in supportive and respectful workplaces. One key indicator of culture health is whether or not existing employees would recommend their company to friends looking for work.

Bad culture is pretty easy to spot as well. Conflict is everywhere, and employees have a decided lack of trust in leadership at all levels. The general environment at work can be toxic, with harassment and bullying commonplace. Worst of all, senior leadership hoards information about the business strategy, leaving employees unsure why they are doing what they are doing.

Changing a flawed culture can be a gargantuan task, so much so that many organizations are daunted by the thought of tackling it head on. There are, however, some foundational steps that can help make the task less burdensome.

Create Agents of Change

Whenever the issue of cultural change comes up, there will be tension between those who want to move the company along in a new direction and those who are still holding on to the old way of doing things. It is vital for everyone to understand the rationale behind the change and their individual role in the culture’s transformation. 

At the very top of an organization, executive leaders are chiefly responsible for driving transformation. Along with effective communication about the nature of the transformation, senior leaders must also identify people within their organizations who can champion the very cause of transformation. 

These are the people who will amplify the transformation message and play a key role in convincing others to invest in the changes that will occur. These influencers will keep others in the company up to date on all transformation developments while providing a channel for questions and feedback. These champions will also help eliminate ambiguity, which is one of the biggest barriers to an effective transformation.

Agents of change will need information about the transformation so they have answers to anticipated questions, as well as the skills to pass this information on effectively. People move through change at different rates, so your leaders should use patience, empathy and openness and make a genuine effort to listen to and understand how their teams are reacting to the changes.

Create an Accountability Culture

Creating a culture of accountability must start at the top. When transformation fails, there was often nothing to ensure leaders were accountable for achieving results.

In these cases, leaders failed to engage in difficult conversations. They did not address poor performance, consider employees’ feelings and input or follow-through on concerns that arose during the transformation. In organizations with a lack of accountability, transformation initiatives can take much longer than anticipated and produce fewer meaningful changes. Simply put, a lack of accountability, combined with the challenges of learning new ways of doing things, can wreak havoc on your timelines.

Whatever is driving your transformation agenda—from introducing new technology, reinventing your talent pipeline or evolving your business strategy to meet new consumer demands—you’re unlikely to achieve your goals if you ignore the need for full accountability on the part of all those driving the transformation.

Create a Road Map

To determine whether your culture can support a transformation initiative, it’s first important to define your current culture and discuss and debate what practices, behaviors and roles need to change.

To do that, you need to engage in some unflinching self-analysis. Encourage your senior leaders to be as frank as possible about existing culture, what works, what doesn’t and what you may need to address before undertaking a transformation.

You’ll need to know how employees see the organization and the people who lead it, whether or not the organization lives up to the values it espouses, and what aspects of the current culture may inhibit the growth and innovation that must accompany transformation.

In our experience, there are 15 key cultural characteristics that are common to organizations that have achieved successful transformation. We have found that this list typically holds true across industries and sectors. Using the list below, survey your leaders and employees to measure how well your people demonstrate these behaviors:

CharacteristicVery PoorPoor Fair Good Excellent 
Stress tolerance     
Entrepreneurship     
Holistic thinking     
Driving focus and prioritization     
Execution     
Meaningful recognition of others     
Storytelling     
Listening to others     
Change agency     
Vision setting and inspiration     
Mentoring     
Decisiveness     
Empowerment     
Trustworthiness     
Follow-up and feedback     


In Summary

When developing a transformation strategy, always define your current culture and what you want it to look like in the future. Empower those who will take responsibility, and set clear expectations and measurable goals. Ask your people for their input, and let them know you are listening. Regularly review results and address any gaps as they arise—and remember to recognize and celebrate milestones along the way.

Successful transformation is not a matter of luck. It isn’t organic and self-propelling. It requires deliberate attention to detail and meticulous planning. And that begins with a frank, unblinking assessment of culture.

Download the full research report, People Power: A Catalyst for Transformation, a 2019 Global Workforce Transformation Trends Study.
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