The Key to Business Transformation is Culture

The culture of an organization, more than business strategy, determines how the business grows and transforms.

Cultural issues are at the root of many failed business transformations, yet most organizations do not assign explicit responsibility for culture.

To reap the benefits of digital business, leaders must take a “culture-first” approach to business transformation, according to Bard Papegaaij, research director at Gartner.

To reap the benefits of digital business, leaders must take a “culture-first” approach to business transformation.

“Most change management focuses on the business context, process and role changes, and transitioning employees through training and new measurements,” said Mr. Papegaaij. “This approach may be fine for addressing the organizational ‘machine,’ but it doesn’t adequately address the human aspects.”

Organizational change that targets visible behaviors and outcomes alone is not enough. Trying to implement new behaviors and measurements without addressing the underlying culture is counterproductive. This causes even well-intentioned people to slip back into old, undesirable behaviors in times of pressure and uncertainty.

Substantive business transformation is something members of the organization must do together, and it begins with culture.

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How to become a cultural change agent

Since IT leaders are unique in working with people across the enterprise, they are prime candidates for being agents of cultural change. It is, however, a very personal commitment, requiring leadership, presence, time and energy. Most importantly, it cannot merely be a formal exercise.

“Since culture is driven by people’s belief systems — that often tie into underlying emotional constructs — you cannot simply tell people to change their culture,” said Mr. Papegaaij. “You must convince people that cultural change is necessary; then help people construct and internalize an alternative belief system that drives a new set of behaviors.”

There are four closely related attributes of business culture that have a strong impact on enterprise tempo, collaboration, direction and business value:

  1. How we make decisions – the general leadership style in a business unit, department or enterprise, and its effect on the speed of the organization’s response to incoming signals.
  2. How we engage – the methods groups use to collaborate internally and externally to deliver on their goals.
  3. How we measure – organizational performance metrics and their effect on the focus and direction of a group’s efforts.
  4. How we work – the working style of a group, including how innovations are developed and how problems are solved, which affect the group’s perception of the business value it creates.

BusinessCulture_info

Changing a culture has fast and slow aspects. Act quickly and decisively to show people that things are really going to be different from now on. Focus initially on:

  • Clearly communicating the new cultural framework.
  • Setting new rules of engagement for people, teams and stakeholders.
  • Using the concept of personal brand to help people develop and express a new identity.
  • Showing leadership, personal involvement and commitment.

Then, it’s time to step back. Give employees space to shape and practice their new behaviors. Never stop supporting and encouraging, but don’t lead too closely, which is disempowering. For lasting change, it’s critical that people feel they own the change.

 

Gartner clients can read more in the report:  “Driving Business Transformation by Changing the Culture” by Bard Papegaaij.

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