Putting Culture at the Center of

Organizational Change

Contributed by Rob Peters on August 6, 2015 in Organization, Change, & HR

A 2013 Booz & Company study, “Culture’s

Role in Enabling Organizational Change”

by DeAnne Aguirre, Rutger von Post,

and Micah Alpern analyzes the results of a

survey of 2,200 executives, managers, and

employees from a broad range of companies

across the world. This research sheds light on

current perceptions of organizational culture.

This study shows a widespread belief that

organizational culture is a key element of company success. For example, as the authors

report, Eighty-six percent of C-level executives and 84 percent of all managers and

employees say culture is critical to their organizations’ success, and 60 percent see it as a

bigger success factor than either their strategy or their operating model.

However, this is contrasted with the astonishing statistics about the need for cultural

change: A full 96 percent of respondents say some change to their culture is needed, and 51

percent think their culture requires a major overhaul. About 75% of the respondents believe

their company needs significant culture restoration, which tracks closely to the proportion

of people disengaged at work. The goal of the study wasn’t primarily to measure the need for

cultural change. The survey did not ask what types of cultural change was needed or desired.

This study suggests that the great majority of companies have cultures that reflect the

contemporary models of the late industrial era of business, where the unraveling of social

trust between employer and employee has only accelerated in the past few years, and where

work stress levels are at a historical high.

The real goal of the study was to explore the role that organizational culture plays in

business transformation efforts. Projects to enact enterprise change usually are the result of

the perceived requirement to adapt to a changing market environment. Relative to that goal,

the survey results are more like a criticism of management than any guarantee of the

success of change efforts, in general, and more precisely, the authors states:

Only 24 percent said their companies used the existing culture as a source of energy and in

flue nce during the change effort.

Creating Sustainable Advantage with Culture and People

Business Leaders have been challenged in

leveraging their organizational culture for

marketplace success. Peter Drucker once

remarked, “Culture Eats Strategy for

Breakfast”.

Culture is an outgrowth of leadership and can

be changed to meet organizational goals. This

dynamic interplay between leadership and

culture is critical if even the most brilliant of strategy is to be effectively implemented.

There have been no standards in defining culture. It’s complicated. Sometimes it’s even

paradoxical. Your employees, partners, and other stakeholders will perceive your culture in

different ways and even use different words to describe it. With all the other challenges your

business is confronted with, it is easy to see why organizational culture has not been a

priority for the leader. However, there is real power to be reaped in nurturing this intangible

asset.

“Business leaders and the financial and industry analysts that follow them have also come to

recognize that establishing and fostering the right corporate culture is not simply a way of

staying out of trouble,” said Lou Gerstner of IBM and again said, “but represents a

fundamental driver of sustainable differentiation and winning in the marketplace.”

The competition moves faster than it used to. “Having the best product or service or making

the perfect strategic move doesn’t buy much time at the top. The landscape has shifted from

looking for that long-term sustainable competitive advantage to managing a portfolio of

transient advantages, moving from one short-lived advantage to the next.” As Rita Gunther

McGrath wrote in the Harvard Business Review

Sounds difficult, doesn’t it? That’s because it is. But this is where culture comes in. Like

most organizations, your competitors have typically ignored culture. They’ve been focusing

on strategy and operations and culture simply became a luxury that they would get to once

they achieved some success. But the goal of culture is to drive the success of the

enterprise. Waiting to focus on your culture until after you become successful actually

sentences you to a never-ending culture of mediocrity. This, in turn, reduces your capability

to succeed. It’s a negative “lever”. Instead of magnifying the force you want to apply. A

mediocre culture increases the distance to your goals.

Focusing on culture not only removes this negative lever, it can exchange it with a positive

one if you do it right. And, unlike products and strategies, which can be quickly copied, the

culture advantage has more sustainable power. The fact that it is complicated and

challenging means that any advantage you achieve over the competition will be difficult to

match. So, how do you secure this kind of advantage? It starts with understanding what

culture really is.

Organizational Culture Defined

Let’s start with “values”. At the core, culture is about what is valued. This can include

framed “values statements” or “principles statements”. Arthur Anderson and Enron had

value statements in their headquarters about principles like integrity, however, it turns out

making financial performance at all costs was the guiding principle so that’s how people

behaved. Your culture is the collection of words, actions, and perceptions that explains and

supports what is really valued by the system.

And that means it’s complicated. There are four factors in this definition that create your

culture: language, actions, perceptions, and tangibles. You and your people activate the first

three. Culture is a complex combination of what we say it is, our behaviors, and the

underlying assumptions and ideas behind it. As you might expect, those three areas are

often unpredictable, which is one reason why culture can be so disorderly. It becomes

something that you have to put together, understanding you’ll find some paradoxes along

the way.

For example, we’ll state we value customer service, but we’ll also say we value being

dedicated to the long term. Those values are reasonable, but at times are quite completely

opposite to each other. One is proactive and one is reactive, and to analyze where the culture

really stands on that contradiction, you’ll have to assess several things at once. It’s the

combination of what people say and how they behave do that will eventually determine how

those two values are equalized.

Additionally, you have to factor in the “tangibles.” Tangibles are the non-human parts of

culture. Tangible things like dress code, office location, office decor, office layout, etc. These

also reveal what is valued, so they have to be included in your assessment of what your

culture in truly is.

This definition is powerful because it enables action. Language, actions, perceptions, and

tangibles give you all the areas you can work with. They give you areas where you can test,

change, and discover. And they keep the conversation about values moving, rather than

stuck down a path that leads toward a boring new set of inspirational posters—but no

improvement in performance.

Now, think about your organization’s culture. Think about the language, actions,

perceptions, and tangibles they define and support what your organization truly values.

The Benefits of Accounting for Relationship Capital (RC)

Relationship Capital (RC) as an open standard which is becoming an important metric in

distinguishing one leader from another and one organizational culture from another.

Quantifying the quality of trustworthiness amongst your team and with your key

stakeholders in this hyper-connected and transparent world is to be expected.

How you behave is as important to your business success as what products you create or

services you deliver. By accounting for these commitments and perceptions you gain the

following benefits:

RC is a social & peer-to-peer reward for your stakeholders (i.e. employees, partners,

suppliers and customers/clients) that motivates new levels of performance.

RC quantifies the “Golden Rule”.

Provides a real-time appraisal.

Relationship Capital (RC) reveals the quality of character.

Creates a point in time view of an entity’s (person, company, AND business group’s RC)

Contributes to the creation of a real-time, dynamic, common global vocabulary to be user by

all members of the community.

Creates a social community of companies and individuals dedicated to the promotion and

adoption Relationship Capital (RC) in their business interactions.

By leveraging open standards of Relationship Capital (RC) we will provide business leaders

more understanding of how to lever these intangible assets of culture to meet and exceed

expectations with all stakeholders that is good for business and the overall community.

Standards of Organizational Culture

If you are a leader that is trying to drive a

large change especially one centered on a

Standards of Organizational Culture , you

need to have a change vision. This is a picture

for your people of what the organization

culture will look like after they have made

significant changes, and it also shows them

the opportunities they can take advantage of

once they do that. It helps to motivate people,

and it’s foundational to any successful change

you’re trying to make.

A change vision is not the same thing as a corporate vision. Both are strategic, but anyone

who wants to successfully make a large-scale change in their organization needs to

understand how they’re distinctive.

The following is the Standard of Trust Group’s Standards of Culture Maturity Matrix that

validates this research.

The Standards of Culture Maturity Matrix

The Standard of Trust Group Standards of

Culture Maturity Matrix is a framework for

categorizing an organization’s cultural

attributes from Level Zero to Level Three

Community Mindsets. Level zero is a

community characterized by a “chaotic”

mindset up to the Level three community

mindset of “Do The Right Thing”.

Conformity Mindset

Acquiescence Mindset

Do-The Right-Thing Mindset

We define community in our framework as a social group of any size interacting with

common standards for Knowledge, Behavior, Relationships, Acknowledgement, and

Striving.

There are no fixed dividers for the level zero to level three cultural communities. Since an

organization’s culture is dynamic, categorizing its community level is a snapshot in time.

Organizational cultures are living ecosystems of purpose, values, and behaviors.

Conclusion

Every successful large-scale organizational change that we have seen has, as a part of it, has

a change vision . And what that means is an image of after we have made the changes on

whatever culture dimensions, this is what we are going to look like . And if we look like

that, our organization is going to be able to take advantage of the great opportunities that

are a function of changes that are happening in this technology-enabled and hyper-

connected world.

About Rob Peters

Rob Peter is a passionate and internationally recognized speaker, author, coach, and trainer on B2B

social selling, social credibility, and relationship capital trust to B2B senior executives, their sales and

business development teams. He is an integral part of the world's largest network of Relationship Capital

Social Selling experts who contribute their best practices to our central Social Selling and Relationship

Capital Trust content. You can connect him on LinkedIn here .

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