Importance of culture in an organization & how to lead change when needed

1. Building Organizational Culture
Prepared by Prashant S Nair

2. Contents
1. Introduction to Organizational Culture
2. How Does Culture Matter in Business?
3. Practical Approach to Culture Building / Culture Evolution Framework
4. Leading Culture Change within Organization

3. Introduction to organizational culture
 Culture is self sustaining patterns on behaving, feeling, thinking & believing
that determine “how we do things around here”
 Self sustaining - culture has inertia
With out a really strong & persistent force, it won’t change its course
 Culture can be an asset that enables, energizes and enhances human behavior
and when wisely utilized it can accelerate and sustain business results
 At its worst, culture can be a drag on productivity and emotional commitment.
It can lead to under performance & undermine long term success
 Every winning culture has a unique personality and soul that cannot be invented or
imposed. Company’s character needs to be discovered from within
A company’s key to success is in its heart and soul

4. Components of Culture (1/2)
Vision
Values
Practices
People
Narrative
Place
 A great culture starts with a vision or mission statement
 They guide a company’s values and provide it with purpose
 A vision statement is a simple but foundational element of culture
 A company’s values are the core of its culture
 While a vision articulates a company’s purpose, values offer a set of
guidelines on the behaviors and mindsets needed to achieve that vision
 Values lose importance unless they are manifested in a company’s practices
 If an organization professes, “people are our greatest asset,” it should also be
ready to invest in people in visible ways
 No company can build a coherent culture without people who either share its
core values or possess the willingness and ability to embrace those values
 Greatest firms in the world have some of the most stringent recruiting policies
 Every organization has a unique history / story
 The ability to unearth that history and craft it into a narrative is a core element
of culture creation
 Open architecture more conducive to certain office behaviors, like
collaboration
 Place - whether geography, architecture, or aesthetic design - impacts the
values and behaviors of people in a workplace

5. Components of Culture (2/2)

6. How does culture matter in business? – (1/2)
Coherent Business
Strategy
Organization Culture
 Structural breakdown
between corporate, BUs,
and support functions
 Responsibilities and
decision rights across
groups
 Performance measures
 Critical systems and
processes
 Value creation choices
articulated in mission,
vision, targets, and
business objectives
 A company’s products,
brands, and customer
Relationships
 All centered on a
coherent set of
capabilities
 Behavioral norms
 Long-standing attitudes
and beliefs
 Lived values
 Accepted style and
approach - common
understanding
 Symbols - visual
identifiers and stories
How will we compete? How will we run the
business?
How will we energize
our people?

7. How does culture matter in business? – (2/2)
 Culture of an organization is the principle source of its competitive advantage & brand
differentiation
 Value driven organizations are the most successful organizations
 Values & behavior drive culture
 Culture drives employee fulfillment
 Employee fulfillment drives customer satisfaction
 Customer satisfaction drives shareholder value

8. Practical Approach to Culture building / Culture Evolution
Framework (1/2)
 A deeply embedded culture does not change very much / very fast.
Major culture replacement requires extensive programs / structural re-design (often hard
and often fail)
 In most cases you don’t need to worry about the entire culture in your organization
 Whenever we deal with culture, we have to break down culture to the person level
 Start with changing behaviors, not mind sets
 Focus on those cultural elements that are most relevant to the specific performance
improvement behaviors with which you are concerned
 Identify which Groups of individuals are likely to be in a position to influence the
relevant cultural priorities
 Use formal & informal mechanisms to make people behave differently even before they
believe
Research suggests b/w 66% to 75% organizational culture change efforts fail

9. Practical Approach to Culture building / Culture Evolution
Framework (2/2)
Culture evolution framework to effectively deal with cultural change in organizations
BusinessObjectives
2.
3.
4. 5.
Culture “FROM” and
“To”
 Understand current culture
 Define aspirations
 Define cultural priorities to be
addressed
 Build on strengths
Critical few behaviors
 Identify the critical few
behaviors that will make the
biggest difference toward
your cultural aspiration
Culture evolution
program
 Design tailored culture
evolution program
 Create implementation work
plan
 Start pilot before roll-out
 Ensure sustainability
Measure
progress
Identify
appropriate
ways to
measure
progress and
to understand
whether the
Culture
evolution
program works

10. Leading culture change within an organization
Underlying
assumptions
 Culture at Org. is
inherently strong
 This initiative is not
aimed at a major
overhaul of the
existing culture
 Objective -
address concern
elements identified
through culture
audit & build a
stronger culture
Identify what our
culture lacks
Already clear from the culture
audit / ESS
Define ideal cultural
aspirations / attributes
Clarity needed on what should
we stand for to realize our vision
Behavioral indicators
outlined
Behavioral manifestations
consistent with your culture to
drive superior business results
Vision / Values
Deployment
Values are deployed with Vision /
Mission. Special interventions for
concern elements in culture
 Set expectations about necessity for change / how will it result in success
 Align the leadership team around a common vision and required behaviors
 A culture of accountability rather than spend energy on formal cultural change
 Encourage leadership to walk the talk. Clarify roles & accountabilities performance metrics
 Communicate and celebrate
SuccessFactors
1.
2.
3.
4.