Some clues can tell executives when a culture change is necessary or appropriate: the company is being outperformed in its category, key positions experience high turnover rates, satisfaction surveys of customers and employees are consistently low, or the company demonstrates poor or declining financial performance. Typically, any of these issues can result from an ailing culture and can be addressed by changing the culture.
Every company already has a culture, so its executives can begin the change process by letting employees define the culture that already exists. The next step is to identify the culture that will best drive the organization's success.
The ideal is a high-spirit culture where everyone is engaged for the good of the company, aiming for the same goals and helping each other succeed. An amazing transformation in enthusiasm and behavior occurs when values and culture are clearly defined.
For culture change to be successful, the company must involve its best front-line people to ensure the culture becomes tied to what is most important: giving customers such a satisfying experience that they will do business with the company again and again. The top front-line people are eager to inform their leaders, and they command the respect that will lend instant credibility to any changes that are instituted based on their suggestions.
From that initial process will emerge a Values Blueprint that codifies the values the company's people agreed upon and the behaviors that exemplify those values. Subsequently, the values can be explicitly incorporated into daily operations by tying them to expected behaviors and rewarding employees for living them.
The Values Blueprint method of changing culture has been used successfully by many companies to create values-rich cultures. These companies are large and small, for-profits and non-profits, and operate in various industries.
Even though each company defines its own culture using different sets of values, six fundamental principles informed every successful values-based culture change.
A company cannot force culture; it can only create environment. Culture is a culmination of the leadership, values, language, people processes, rules, and other conditions within the organization. Leaders can only create the right conditions and working environment that will help the desired culture to emerge and flourish.
The service a company provides to its customers will never be greater than the service it provides to its employees. A company cannot create a great customer service organization if it treats employees badly. The companies that excel in customer service also excel in how they treat their employees.
Success is doing the right things the right way. Redefining corporate values helps companies make better decisions. Clearly defined values and the expected behaviors based on them empower employees to handle problems personally and immediately and simplify the day-to-day tasks of decision making.
People do exactly what they are given incentives to do. A values-rich culture succeeds when it rewards the behaviors that the company wants, taking into account how those behaviors lead to desired outcomes. Values will be perceived as hollow and meaningless unless the company bases compensation and rewards on expressions of the behaviors that mesh with the values. Hiring, promotion, and appraisal methods must be revised to select people who already display the values that are important to the company.
Organizations will get out of this process only what they are willing to put into it. A company never finishes defining and fostering a values-rich culture; it must always be vigilant against digressions into its old ways. Companies must regularly monitor their progress toward fully implementing the model, developing value-based leadership, and planning for leadership succession.
The desired environment can be built on shared, strategic values and financial responsibility. Conscious action, beginning with determining a set of shared values, can set up the necessary condition for encouraging a culture that will make an organization a leader in its industry. Those values should also be vetted in terms of responsible fiscal management; however, financial concerns should not derail the process in its infancy.
Culture change will likely save money as turnover and training costs are reduced and customers become more satisfied. Values are most critical when making tough decisions, but that is also when they illuminate the way forward.
This article is based on the book "Built on Values" by Ann Rhoades. The book summary is available online at Business Book Summaries.
