CULTURE CHANGE: conclusions and key learning points

Executive Summary

1.     A 'winning' corporate culture is not just about creating a strong culture. It is one that is adaptable to changing market and customer needs and flexible enough to meet the demands of changing strategic objectives.

2.     Any culture change programme must support strategic goals or significant business imperatives, or else it will almost certainly fail.

3.     It is of fundamental importance that the CEO and the senior management team support and drive the culture change effort. Equally, they must personally role model the new cultural behaviours.

4.     Linked to the above, responsibility for culture change must be owned at the top of the organization, and not devolved to a specific function.

5.     Companies should conduct a thorough assessment of their existing culture before launching a culture change programme. This will help identify potential cultural problems and enable senior managers to build robust culture change plans that anticipate these challenges.

6.     The whole of the employee-base should be involved in the culture change programme. Involvement is the most effective way to secure buy-in for the change objectives.

7.     Frameworks such as the balanced scorecard and the European Foundation for Quality Management's (EFQM) Business Excellence Model can be powerful mechanisms for aligning individual behaviour and performance with strategic goals.

8.     Linked to the above, organizations should not underestimate the power of measurement in creating a new culture. As one commentator says, "measures drive behaviour and behaviour creates culture".

9.     It is vitally important to align Human Resource (HR) mechanisms with the new cultural ethos. Quite simply, how individuals are appraised, developed, promoted and, crucially, compensated plays a pivotal role in shaping their behaviour and therefore embedding the new culture.

10.     Similarly, internal communication mechanisms play a powerful role in driving cultural change. But communication should be open, honest, two-way, mutually reinforcing and clearly support the new cultural ethos.

11.     The research shows that it is cultural issues, and not faulty strategies or price issues, that lead to most merger and acquisition failures. So companies considering a merger or acquisition would be judicious to make cultural integration a key focus of the integration effort.

12.     High performing cultures in the future will, according to advisers, be able to cope with constant change, be customer-focused, and amoeba-like. Accountability for performance will be devolved deep inside the organization and those at the top will demonstrate markedly different leadership styles than are generally valued today.

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