Organisational Culture - Ways of Changing Culture

In this study note, we summarise some key points that students might consider when looking at ways of changing organisational culture:

Definitions

• Change management: a structured approach in an organisation for ensuring that changes are smoothly and successfully implemented, and that the lasting benefits of change are achieved.
• Step Change / Incremental Change: how much change and when?

Key Theories / Concepts

• Lewin Force field Analysis: In Lewin's model there are forces driving change and forces restraining it. Where there is equilibrium between the two sets of forces there will be no change. In order for change to occur the driving force must exceed the restraining force

Methods of Successful Cultural Change

• Recognise what contributes to making the culture matter (e.g. vision, values)
• Invest in and nurture what matters to the desired culture (e.g. induction training, employee engagement, innovation)
• Aim to maintain cultural distinctiveness and competitive edge (e.g. clearly differentiated market position)
• Owning the culture is part of every employee's role - need to take responsibility to fit in, meet cultural expectations and develop the culture

Ways of Measuring Culture & Effect of Change

• Ways to measure the strength / effectiveness of culture change
• External surveys; customer testimonials; % of repeat business; customer referrals; employee surveys; focus groups; staff retention & staff turnover:
• What to Change? "Best Company to Work For" Model uses…
• Leadership: How employees feel about the head of the organisation.
• My Manager: How employees feel about and communicate with their direct manager.
• Personal Growth: What employees feel about training and their future prospects.
• Wellbeing: How employees feel about stress, pressure at work, and work life balance.
• My Team: Employees feelings towards their immediate colleagues and how well they work together.
• Giving Something Back: The extent to which employees feel their organisation has a positive impact on society.
• My Company: The level of engagement employees have for their job and organisation.
• Fair Deal: How happy employees are with their pay and benefits

Key Examples / Evidence

• The Crucial Role of Leadership in Culture:
• Schein: Accountability for organisational culture - defining or reinforcing the norms and expectations - is primarily the role of the CEO

Insights from CEOs who have successfully changed organisational culture:

• Moya Greene (Royal Mail): on the need to bring in new people: “If you have the right people, you can overcome organisational problems. But if you do not have the right people, an organisation that is brilliant is not going to get you there".
• Archie Norman (ITV, Asda): “Understand the DNA of the company and what—culturally—led it to be in a failed situation. Behind all financial failures is organisational failure.
• Irene Rosenfeld (Kraft Foods): on the need to drive change quickly: “I think anybody who has been involved in a transformation typically wishes he or she had gone faster. You have to move quickly to have all the pieces come together."

Depends on Factors

• Lots of evidence that culture management is not optional – so leaders have to find a way!
• Ed Schein: "if you do not manage culture, it will manage you"
• Organisational culture is a "soft" management issue - it is not easily measured or controlled - but it is a mistake therefore not to take it seriously.
• Organisational culture is becoming less predictable - like other elements of the external environment - because of the way that work is changing.
• Schein: culture is a group phenomenon

Further Evaluation Opportunities

• It is too easy to under-estimate the challenge of trying to change/improve organisational culture.
• Culture change is not straightforward. It is a slow and often painful process.
• You cannot “create" a new culture in an organisation that has already evolved a culture.