Every company has a culture, whether it has been deliberately developed and cultivated or allowed to grow wild. In either case, from time to time a culture change is needed. Of course, that is easier said than done. Change is challenging, and many employers discover that gaining employee buy-in for new ways of getting the job done is hard work. In fact, research from expert change management firm McKinsey & Company shows that 70% of programs created to implement culture change in organizations fail to achieve their goals. The reason? Leaders find themselves unable to persuade their workforce of the initiative’s value.
The good news is this doesn’t have to be your organization’s story. There are specific actions you can take to ensure the success of your culture change efforts. That’s important, because a strong company culture delivers substantial returns on your investment of resources.
The benefits of a strong company culture
In some ways, it's hard to define what makes a company culture strong. It's possible to list attributes of healthy cultures, such as open, transparent communication, prioritization of employee safety, and a focus on fair, equitable treatment of each staff member. However, measurement of corporate culture is really more about results.
You can identify companies with strong cultures by their investment in developing employees’ skill sets and their commitment to accountability at all levels of the organization. There is visible and deliberate attention to diversity and inclusion, and business leaders “walking the walk” in addition to “talking the talk”. Companies with strong cultures tend to be well-regarded in the communities they serve, and they stay out of the spotlight as far as negative media reports.
The impact of a strong, healthy company culture goes far beyond intangible benefits. Companies with such cultures enjoy advantages that directly contribute to bottom line results. Examples include:
- According to Gallup, culture can be designed to attract the best people, which can lead to 33% higher revenue overall.
- The Job Seeker Nation Study noted that 46% of candidates put a high priority on company culture when considering possible positions.
- Another study by Robert Half noted that a third of U.S. job seekers said they would turn down their dream job if the company culture wasn’t quite right. In other words, strong culture attracts top talent, which is critical for moving the business forward.
- Company culture directly contributes to the organization’s ability to retain talented workers. The same Job Seeker Nation Study noted that for many employees, culture is more important than pay. A full 32% of job seekers said they would take a pay cut in exchange for a position in a company with a strong culture.
- Another study noted that three out of five U.S. workers indicated that if given a choice, they would prefer a 50% pay cut to have a job they loved rather than double their current pay to take a job they hated. This data shows that organizations with toxic cultures face serious challenges when it comes to retention and turnover.
Strong company culture contributes to employee engagement - and engaged employees are more productive and more profitable than their disengaged peers. Achievers' Engagement and Retention Report revealed that just 19% of employees consider themselves “very engaged.”
The cost of even this small percentage of disengaged employees is staggering. Gallup estimates that disengaged employees have 37% higher absenteeism, 18% lower productivity, and 15% lower profitability. A continued effort to drive down that number means improved productivity and overall better financial performance for your organization.
Shaping culture change in organizations: common challenges
Any initiative aimed at adjusting business culture comes with challenges. It's not easy dealing with changes at work. The biggest obstacle HR professionals face is motivating employees to embrace new ways of working. This lack of engagement in the process contributes to the failure of many attempts at creating sustainable culture change in organizations. The problem is amplified if there is a failure to invest in development of the necessary skills to integrate changes and maintain them over time.
Remember that you're asking individual employees to modify their approach to situations they have encountered dozens - even hundreds - of times in the past. It's difficult to break these ingrained habits, especially when employees’ perception is that their traditional methods are effective. Eliminating this resistance and encouraging new behaviors requires a commitment to building effective strategies, and then rewarding small and large successes along the way.
How to execute a successful culture change
Creating culture change in organizations isn’t easy, but the investment of time and resources pays substantial dividends long-term. Smart business leaders take a comprehensive approach to these initiatives that includes inspiring and motivating the workforce, prioritizing transparent and effective communication, listening to employees and acting on the feedback, focusing on appreciation, and ensuring cultural continuity regardless of internal and external factors in the business environment.
Inspire and motivate
Successfully changing the culture of your organization requires deep, lasting leadership commitment from the top down, as well as from the bottom up. Senior leaders must be visible and vocal in describing the desired end-state, and they must use their influence to inspire and motivate individuals across the company. More importantly, they must cast the shadow of a leader by demonstrating desired behavioral changes in their own workplace interactions.
Management at other levels in the organization can build on the work done by senior leaders. They, too, can leverage the relationships they have with their team members to ensure understanding, generate excitement, and motivate employees to incorporate new behaviors into their daily tasks. It's critical that they, too, cast the shadow of a leader to set the right tone and example for their team members.
This is an area that may require investment in skill development, as well as careful attention to ensure that those in a leadership position support the initiative. One manager influences everyone in his or her span of control, for better or worse. If he or she lacks the skills to demonstrate the new behaviors or has no interest in developing those skills, an entire team can be affected.
Everyone can name a business initiative that was announced to great fanfare, then never discussed again. Don’t let your efforts at culture change fall into that category. Make sure communication is ongoing, takes place across multiple channels, and includes perspectives from a wide variety of voices within the organization.
Integrate your company mission and values into all aspects of the business. Develop a shared language around cultural ideals, and use it in conversations about performance. Emphasize the link between specific company values and the key behaviors you want to promote in your company culture. When you're navigating culture change in organizations, you need to be transparent and communicate often with your workforce.
Listen and act
Everyone needs to be heard, and that is especially true during times of change. As you work to transform your culture, make it a point to solicit employee feedback on a regular basis. An annual engagement survey alone isn't enough. By the time an employer responds to an annual survey, the feedback isn't relevant anymore.
Consider far more frequent check ins through the use of a voice of the employee solution. You can survey employees on a monthly or quarterly basis, compiling results and watching for trends over time to see how they're handling changes in the workplace. There are even real-time feedback options, such as an an always-on, employee-driven feedback channel like a workplace chatbot, that allows your staff to offer suggestions and share concerns at any time.
Of course, obtaining feedback is just the first step. Acting on it's even more important. There is nothing more disengaging than calling out issues, only to have those issues remain unaddressed. Ensure managers and leaders follow up with their teams to discuss survey results and build collaborative action plans together. It's key to involve your employees so they feel seen and heard throughout the process.
Frequent opportunities to be heard, along with confidence that action will be taken, is effective in building trust between leaders and team members. That, in turn, improves engagement and increases the likelihood that your workforce will accept coming changes. It's critical to take the pulse of employee engagement as your workforce shifts to a new culture change - this allows you to course correct faster and smarter.
Recognize and reward
It's difficult to persuade employees that you're committed to cultural change when you don’t recognize and reward their efforts to support the initiative. Frequent recognition of successes and accomplishments that illustrate the desired culture go a long way towards gaining buy in from your staff. Those who are recognized for behaviors that reflect company values are motivated to repeat those behaviors. In fact, 92% of workers agree when they’re recognized for a specific action, they’re more likely to take that action again in the future and 90% say when they receive recognition it motivates them to work harder.
Create cultural continuity
In an unpredictable world, one thing you can count on is that there will always be obstacles and challenges facing your business. Sometimes, that comes in the form of a natural disaster, and other times, it's a change in national or global economic conditions. How your company responds to such challenges from a cultural perspective demonstrates your success in fully integrating the desired values and behaviors. Remember to focus on culture continuity and workplace resiliency to build sustainable engagement in your workplace.
When challenges come up, do you see team members collaborate on solutions? Are they able to flex and adapt to the new circumstances? Is the business as a whole recognized as a community? Don’t let unexpected events derail your change management plan. Instead, lean in when the going gets tough and focus on engaging your employees during times of change. Your company’s ability to maintain cultural continuity regardless of the situation is the final step in creating lasting change.
Finally, whenever possible, rethink when and how work gets done. Make adjustments to reflect desired culture. For example, if your goal is to create a culture of recognition, increase opportunities for employees to recognize another effortlessly, whether it's through implementing a new recognition program or training leadership on becoming recognition champions.
By integrating desired behaviors into day-to-day work activities, you establish that the changes are here to stay. Employees who weren’t quite bought into the new culture may become accustomed to it when they see hard results.
Learn more about how to navigate culture change in organizations by accessing our webinar, "How to Foster Culture Continuity During the Three Phases of Crisis Recovery."
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