This document discusses transforming corporate culture to gain competitive advantage. It defines corporate culture as an organization's personality and key to employee behavior. Successful companies shape culture to support goals. Four dimensions must be addressed to change culture: leadership must change conversations and behaviors; management practices and policies shape employee experience; organizational structure impacts collaboration; performance management influences goals. Leaders must demonstrate support through actions and make culture changes through many interactions. Case studies show how leaders like Jobs and Disney instilled new cultures.

1. Strategic Intent A leadership perspective on today’s issues
and tomorrow’s trends for business success
Published by Edelman Change and Employee Engagement Volume 3, Issue 3
Transforming Corporate Culture
How Your Employees Think, Feel and Behave as a Means
to Succeed in Today’s Competitive Marketplace
with strategy is a powerful means
for gaining competitive advantage.
Unfortunately, although companies
are usually pretty good at establishing
their corporate strategies, they often
overlook or underestimate whether
they have the right culture in place to
direct the company toward continued
and future success. Or they don’t know
how to change their corporate culture
to support future growth goals.
Assessing
corporate culture
First and foremost, culture is seen
today more than ever before as an
Corporate That said, there is no “right” culture important determinant in a company’s
culture defined model. Rather, the key for leadership success. General Motors, for example,
is to adhere to a corporate culture recently replaced most of its senior
Corporate culture is the distinctive that is consistent with the company’s leadership citing the need for a new
personality of an organization. It is vision, values and strategic goals. culture among other things.
a key determinant in how employees Not surprisingly, corporate cultures
behave – what to do and what not of industry leaders do not develop But how do you know if your
to do. At the core, corporate culture by accident. Instead, successful culture is helping or hindering
describes “how things are done in companies explicitly shape and organizational success? Certainly,
an organization” and includes an define their corporate cultures to traditional techniques such as
organization’s core values, beliefs serve as effective enablers, helping employee surveys, focus group
and assumptions. them achieve their desired objectives. interviews, and regular pulse
Often, corporate culture will checks are common methods for
New employees assimilate culture determine whether an organization assessing a company’s current
as the way to perceive, think, feel, survives in the long-term, especially culture by uncovering gaps between
act and expect others to behave in in volatile environments. The employees’ beliefs and values
the organization. ability to align corporate culture versus expectations and protocols
Strategic Intent • 1
© 2011 Edelman Change and Employee Engagement Group

2. defined by the company and culture already exists, individuals many channels and interactions.
gathering employee feedback and need to unlearn the old values, Consequently, it is critical that
insights on the type of culture they assumptions and behaviors before company leaders articulate why
want the organization to develop. they learn the new ones. the change is important and
how it relates to individual and
Even more alarming are the That said, companies can and do organizational success. However,
signs or symptoms indicating a change their cultures. In fact, many company leaders must also
company’s culture may be suffering of the most successful companies demonstrate behavioral support for
and requires attention and change. continue to exist because they the transformation. People look to
have transformed their cultures their leaders for signals on how to
They include: multiple times. Think IBM, Apple, act. Hence, executives must lead
• High turnover Nike, and Xerox to name a few. In the change by altering their own
studying culture change, we have behaviors and making sure their
• Difficulty in attracting top
identified the four dimensions that actions and decisions are aligned
talent
must be addressed. with values of the new culture.
• Low employee commitment to
contribute to the organization’s Apple Founder Steve Jobs defined
success and developed the company’s
• Lack of information exchange Management culture in ways that can neither be
between individuals and teams Leadership
Practices and replicated nor replaced. Similarly,
Workplace
Disney instills its core values to
• Poor transparency into how Policies
every employee at every level by
decisions are made
enveloping the culture through
• Drop in customer satisfaction story telling, sharing, recognition
scores Organizational Performance and rewards.
Structure Management
• Minimal employee participation
in company events Dimension #2:
• Reduced cooperation and Management Practices
collaboration between and Workplace Policies
colleagues
Dimension #1: As the formal arbitrator of what is
Leadership acceptable in a company and key
Changing factor of determining how “things
corporate culture When a company is looking to change get done in an organization,” a
The Four Dimensions its corporate culture, its leadership company’s management practices
of Culture Change team plays two critical roles – 1) and workplace policies are the
changing the conversation to reflect tangible, significant ways for
Once a company realizes its current
the organizational and individual how people experience, live
culture needs to change, it must
behaviors, business focus, and and feel culture. For example,
first comprehend the underpinnings
priorities underpinning the change allowing certain bad behavior
of what makes a desired culture
and explaining why it is important; from managers instills a negative
becomes a reality. Changing a
2) supporting the change through set of people values. While
company’s culture requires careful
commitment – its own actions, instituting policies that allow
planning and critical understanding
behaviors, decisions, performance working mothers to work part-time
of which organizational levers have
measures, and investments. or from home on certain days
the greatest impact on transforming
help develop a family-friendly
its culture. It is more challenging Employees will only begin culture. Alternatively, management
to change the culture of an existing rethinking and changing their practices that ignore family
organization than to create a culture own behaviors if they experience obligations instill a culture that
in a new organization. When a the new way to do things through devalues work-life balance.
Strategic Intent • 2
© 2011 Edelman Change and Employee Engagement Group

3. Supporting its mantra of: work and tells new hires that if they quit The Walt Disney Company
should be challenging, and the on the spot, Zappos will pay them trains managers everyday on
challenge should be fun, Google for the time they have worked, plus a how to recognize employees who
permits engineers to devote 20 bonus. The idea behind “the offer” is demonstrate the company’s core
percent of their time on anything to give new hires the opportunity to values and provides them with the
they want that they are really leave the organization if they do not tools to do so. Furthermore, Disney
passionate about. To ensure global have the sense of commitment that has over 180 recognition programs
management practices support its Zappos is looking for. that encourage employees to support
unique culture, Google hired a the company’s culture. Among these
Chief Culture Officer who works Dimension # 3: programs is the “Spirit of FRED
with employees around the world to Performance Management Award.” FRED is an acronym created
identify ways to maintain, enhance from the name of an employee who
and develop the company’s culture One of the most effective drivers personified the Disney values:
and keep its core values, even as it of culture rests with how people are Friendly, Resourceful, Enthusiastic,
continues growing. measured performance-wise including Dependable. An employee had
compensation, recognition, and introduced this award to recognize the
:: Hiring Practices training/development. individuals who mentored and coached
Personalities and experiences him as he began his management
of employees have significant :: Training and Development career after being an hourly employee.
effects on a company’s culture. Behavior change drives culture Employees liked the award so much,
While training employees in the change. Employees must clearly they kept giving it out.
behaviors of the new culture is understand what is expected of
important, hiring employees who them and what their new behaviors :: Performance Reviews &
already embody core values of should be, to support the culture Compensation Structures
the new culture accelerates and transformation. Training is useful To ensure consistency, companies
strengthens the change. People in defining and communicating must make sure performance and
tend to conform to the behaviors of new expectations and teaching new compensation structures endorse
those surrounding them. New hires behaviors. Integrating core values the behaviors and beliefs of the new
can influence other employees to of the new culture into training culture. For example, employees
change their behaviors and adopt programs further clarifies for should not be rewarded for individual
new expectations and ways of employees what the new culture performance if the new culture
interacting with each other. looks like and how it differs from specifies collaboration and team work
the previous culture. as a core value. Companies should
Aware that finding the right make sure they clearly define the new
employees is critical to maintaining :: Recognition and Rewards performance standards to prevent
and developing its culture of Acknowledging and rewarding ideal employee confusion.
commitment and professionalism, as behaviors that support the new
part of its interview process, Zappos, culture are critical. Recognition A leading department store chain
an online retailer, asks applicants should be both private and public, enforces its culture of high-
a series of questions pertaining to so that everyone clearly understands performance and excellence in
the person’s core values, to better what behaviors are valued. More the earliest stages of an employee’s
understand if the applicant and private recognition can come from experience. The company designs
Zappos fit well together. To reinforce senior leaders or even the CEO so performance standards, reviews,
Zappos’ core values, every new individuals understand what they compensation and other HR
hire participates in a four-week did was important, not just for their management programs to reinforce
immersion program to understand direct manager, but that senior its culture of excellence throughout
the company’s philosophies, culture leaders also value their support an employee’s career. Its HR
and practices. A week into the in shaping the new culture. function also works to continually
program, Zappos stops the training improve the communication of total
Strategic Intent • 3
© 2011 Edelman Change and Employee Engagement Group

4. compensation programs, including For example, realizing that closed-
Edelman Change and
cash compensation and benefits, door offices can impede collaboration
Employee Engagement is the
so that employees know and fully and interaction, to maintain an
understand the reward system open communications culture, some global organizational (internal)
and its links to the company’s companies now operate in open- change communications
core values. office environments. Instead of consulting group of Edelman,
closed offices and cubicles, each the largest independent public
Dimension #4: workspace including the CEO’s, relations firm in the world and
Organizational Structures is out in the open and looks out
the third largest overall. The
upon the rest of the staff in each
mission of Edelman Change
Organizational structures can play department. Some companies even
an important role in defining how use rolling desks, cabinets and seats, and Employee Engagement is to
individuals and teams interact so that employees can set up their advise and assist organizations
with each other, which affects individual workspaces according to on strengthening the ability
a company’s overall culture. their personal needs and preferences. to implement corporate
Companies with multi-layer strategy and initiatives through
organizational structures tend to A long-term play management and employee
be more hierarchical, inflexible
Transforming a company’s culture engagement and effective
and process-driven compared to
companies with flat organizational is challenging, but it can be done. communications in order
structures. Meanwhile, companies In some cases, it must be done, or to build brands and achieve
with many business units competing the company risks not surviving business goals.
for the same customers and internal in the long-term. In addition to
resources might lead to siloed the key levers discussed above,
The group provides
teams that rarely collaborate on persistence, patience, discipline and
employee involvement are critical to distinctive expertise in
joint projects. Just as there is no
“right” corporate culture, there is successfully transform a company’s organizational effectiveness,
no “right” organizational structure. culture. Culture change takes time. culture transformation,
That said, companies should be The speed of change depends on strategy implementation and
careful that their organizational the size of the organization, the accessibility, CEO transition and
structures empower and encourage commitment of top leaders and the positioning, internal branding,
individuals to behave in ways availability of resources to implement
post-merger integration, labor-
consistent with the new corporate the change throughout the company.
Nonetheless, with strong leadership, management relations, internal
culture, instead of contradicting it.
results will begin immediately. communications programming
:: Physical Work Environments and research/measurement.
Often overlooked, employees’
physical workspaces are valuable For more information, please
drivers for changing a company’s
visit www.change.edelman.com.
corporate culture. The amount of
workspace different individuals have
and whether this varies depending
on seniority in the company, where
offices are located, who are assigned
offices, how many common areas
there are and how common areas are
utilized, affect how people behave,
interact and communicate, which in
turn shape the company’s culture.
Strategic Intent • 4
© 2011 Edelman Change and Employee Engagement Group