Is your company’s culture a constraint for growth? Part 1

Is your company’s culture a constraint for growth? Part 1

We tend to think that the biggest constraints to our growth are external to the business. And in a rapidly shifting VUCA world, it is easy to understand why we might do so. However according to Deloitte, this is not always the case. In their article ‘Catalyzing organizational culture change’ they site a company’s culture as a dominant constraint. To improve organizational performance, incoming executives must either work with the prevailing culture or begin cultural change efforts.

‘Not systematically understanding culture and addressing change when needed can undermine leadership success and corporate performance.’

In the next two blog posts, drawing on Deloitte’s informed commentary on this topical issue, we are going to summarise ways in which prevailing culture can be diagnosed and, as needed, cultural change can be activated across the C-suite.

Let’s start by taking a look at how they define culture. Deloitte talks about it being like an iceberg, with only a small bit visible at the top. Most of it is below the surface and this submerged part is made up of all the shared values, beliefs and assumptions that are shaped over generations. These drive behaviours. It is the submerged part that can sometimes, as they put it, “punch a hole through titanic corporate initiatives.’ Is this sounding familiar?

The Deloitte Global Human Capital Trends 2016 Report (based on a survey of over 7000 business and human resources leaders) highlighted that whilst 4 out of 5 of us many of us believe culture could be a potential competitive advantage, only 1 in 5 believe they have the ‘right culture’.

Culture change requires change at the beliefs level, and that’s why it can seem so hard, more challenging than altering a business process or an information system for example. Added to that, we find sub-cultures across groups within a larger company culture. Executives may have scope to drive belief change within their functional area, but sometimes not outside of it. Every C-suite exec should be able to diagnose dysfunctional cultural attributes so that they can assist CEOs to drive the companywide culture change that may be required. Yet many are poorly equipped to diagnose, articulate and catalyze this change to improve performance. HR Professionals conscientised to these issues and the solutions for resolving them can play a more meaningful role in catalyzing change – wouldn’t you agree?

Deloitte has taken classical culture change models (3 stage models, Lewin-Schein), and translated them into a series of steps that can be practically applied. This is on the back of their practical lab experiences. They are:

1. Diagnose, name, and validate the culture of the organization
2. Reframe the cultural narrative
3. Role model and communicate cultural change
4. Reinforce a new belief system.

We’ll explore these in a bit more detail in Part 2 of this blog.

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