Culture change: why it often fails and what it takes

Corporate culture comprises the values, expectations, patterns of behaviour and rules according to which people act in an organisation. It therefore has a decisive influence on how people coordinate their behaviour. Laura Wruck describes culture as the unofficial rules of the game in an organisation. They are taken for granted and often only come to mind when someone breaks them. Instead of rules of the game, one can also speak of established forms of cooperation.

In systems theory, culture is one of an organisation's decision premises, namely one of those that cannot be decided on directly. “Culture is not a thing, you cannot touch it,” says Laura Wruck. It is the collective result of interaction that often spans decades, and it is there whether you want it or not.

Whenever the rules of behaviour and of the game that an organisation practises no longer fit its strategy and objectives. The occasions can vary widely. A company can no longer find employees. High performers leave the organisation because the lived culture no longer fits the times. Or a company wants to become more innovative while its existing culture is very focused on security. Then the question is which forms of cooperation allow innovation in the first place. Read more in our article on the capacity for innovation.

A culture is neither good nor bad. transformis looks at the culture and assesses whether or not it fits the strategic objectives.

No. Culture can only be influenced indirectly, off the cushion as it were. An example from the conversation: a company introduces first-name terms, the informal “Du” in German. This does not change the culture directly. What is being worked on are the communication structures. How the organisation and its culture will react to this change cannot be predicted.

Anyone who wants to change cultural characteristics, such as stronger customer orientation or a different way of dealing with mistakes, will not get far with an instruction. Fundamental changes are needed. There are no recipes, because every organisation has a different history, its own learning history and its own explicit dos and don'ts.

Laura Wruck names three prerequisites. First, a collective understanding of the strategic positioning and the related corporate objectives and values. Second, suitable communication and decision-making structures and routines with the rules and values that go with them. Third, measures that help managers and employees develop the attitude and behaviour needed to implement the strategy.

Early in the process, a simple question helps: what happens if nothing happens? It creates broad awareness that change is necessary, a sense of urgency. Which levers leadership has after that, from processes and observation and assessment frameworks to spaces for communication, is described in our article on culture development.

If a company wants to become more customer-oriented, the first question is: what do our customers judge customer orientation by? One possible answer is: the time it takes to handle a customer enquiry. This leads to the next question. Which values, processes, attitudes, people and assessment systems does the company need to answer customer enquiries faster?

To change anything here, it has to be clearly defined within how many minutes or hours a customer enquiry is to be dealt with. This requires dedicated processes, possibly also systems and procedures. And it requires employees who understand and accept this goal and are motivated to handle customer enquiries within the agreed quality target in future. A poster saying “We are now more customer-oriented” is not enough. How internal and external customer orientation can be strengthened systematically is described in a separate article.

According to Robert A. Sedlák's observation, many companies act according to the motto “wash me, but don't get me wet”. They want a different culture but shy away from the interventions this requires.

Culture change needs three things: a language to describe culture, a decision on which values and rules of behaviour are to apply in future, and the will to use the levers for culture change. This will is needed above all from people who enjoy standing and power in the company. Sometimes personnel changes in important key functions are also necessary so that the new can grow.

A failed culture process is not without consequences. It often leads to cynicism, frustration and a loss of trust in senior management among the workforce. In addition, culture has a preserving effect: people who enjoy working for the company can easily experience culture change as an intervention in their own identity. Why routines protect the status quo is described in our article on resistance to change.

The transformis Systemic Culture Compass provides a language for culture. Using clear and simple language, it captures the culture lived today and the culture that respondents consider necessary to achieve the objectives. It distinguishes four basic orientations: collaborate, create, compete and control. None of them is better than the others.

Many employees associate the concept of culture with high hopes that everything will quickly get better afterwards. Culture development is indeed meant to improve cooperation and the working climate. But it is not about the table football in the break room; it is about a shared focus on the strategic objectives. Many transformis clients cite improving the conditions for performance as their main reason. How a survey works is shown in part 3 of the video series. The page Analysing corporate culture describes how transformis examines cultures.

The statements come from the second and third parts of the video series “Systems theory & practice”. Laura Wruck, then Laura Hüer, and Robert A. Sedlák recorded the conversations in 2022, when transformis was still called SEDLÁK & PARTNER. This article is based on the discussion guide for the videos. The conversation about culture and culture change can be watched as part 2 of the video series on YouTube. How transformis supports culture development is described on the service page Developing corporate culture.