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Successful cultural transformation presents organisations with considerable challenges and at the same time offers enormous opportunities for sustainable growth. KIROI Step 4 focuses specifically on how leaders and managers can actively shape and drive this comprehensive transformation. In this article, you will learn how to successfully master the cultural transformation in your organisation and become a role model.
Understanding the basics of cultural transformation
Corporate culture forms the collective memory of an organisation. It includes visible elements such as symbols and structures as well as more profound aspects such as routines, rituals and shared beliefs.[3] Cultural transformation refers to the systematic process by which organisations change their corporate culture in a targeted manner. This is not done superficially, but through profound changes in values, beliefs and behaviour[3].
A successful cultural transformation leads to greater employee loyalty. It also increases resilience to market changes.[5] But why is this process so complex? The answer lies in the fact that culture does not change by chance. Cultural change is the result of many changes in the behaviour of all members of the organisation. These must be exemplified by the management and supported by appropriate structures[6].
KIROI Step 4: The role of managers in cultural transformation
The fourth step of cultural transformation focuses on the central role of leaders and managers. This position is crucial, because every cultural transformation must start with the understanding of leadership[4]. The willingness of the management team to question itself and its behaviour is ultimately decisive for the success of every cultural transformation[4].
Managers act as authentic role models. Respected and authentic leaders have a strong influence on the success or failure of a cultural change.[3] In the best case, these people not only act as role models, but also receive backing from appropriate systems and assistance.
Strengthening leadership culture for sustainable cultural transformation
Strengthening the leadership culture is fundamental. Together with your management teams, you define a new leadership culture for your organisation and put it into practice.[4] Through empathy and a genuine interest in the well-being of employees, you strengthen the resonance between hierarchical levels.
This creates a culture of appreciation and motivation. This increases the healthy performance of your entire organisation.[4] Practical examples show that this approach works in a wide range of industries:
BEST PRACTICE with a customer (name hidden due to NDA contract): A technology company with over 500 employees carried out a targeted leadership culture process. The management team jointly defined new guiding values such as trust, transparency and mutual support. Within six months, staff turnover among managers fell by 40 per cent. Employee surveys showed a 35 per cent increase in satisfaction with direct management. The new management culture spread to all levels of the organisation.
Practical strategies for implementation at management level
Implementation at management level requires a structured approach. The initial focus is on the management team itself.[1] Through individual coaching, managers recognise which values they can act as a good role model for,[1] while at the same time beginning to reduce barriers that stand in their way of implementation.
Individual coaching and team coaching as instruments of cultural transformation
A team coaching process supports the participants in becoming role models for the desired way of dealing with each other[1]. Within a few months, a nucleus is created in which the new culture is expressed in an exemplary manner.[1] This nucleus can serve as inspiration for other parts of the company[1].
Mentoring, coaching and training programmes are proven instruments. As a cultural transformation always implies working on the behaviour of all those involved, it is important that this development process is accompanied by further training[6] and that a budget is planned and made available for these measures.
BEST PRACTICE with a customer (name hidden due to NDA contract): A financial services provider with 300 employees carried out an intensive coaching programme for its management team. Each manager first received individual coaching to clarify their personal role in the cultural transformation. This was followed by a 12-week team coaching programme for the entire management team. The focus was on authentic communication and psychological safety. After the programme, 92 percent of managers reported increased trust among themselves and significantly better cooperation.
Being a role model: living cultural values authentically
If your behaviour is not in line with the defined target culture, not only you, but also the target culture will become untrustworthy.[6] The transformation then often fails at the outset.[6] Only if the management lives the new culture with appropriate behaviour can it keep its managers and employees committed.[6]
Managers must fulfil the following specific tasks: Initiate transformation, jointly develop the cultural target image, communicate elements of the future corporate culture, exemplify cultural values, give feedback and hold others accountable, measure success, develop themselves and others, and be consistent[6].
BEST PRACTICE with a customer (name hidden due to NDA contract): A production company with 1000 employees defined new core values: safety, innovation and collaboration. The management made this clear not only in speeches. They visibly changed their own behaviour. The managing director regularly visited the production halls and spoke directly with employees about safety concerns. He openly admitted when mistakes were his fault. This had an enormous signalling effect. The employees also began to work more openly and co-operatively. Safety accidents fell by 50 per cent.
Extending the cultural transformation to the entire organisation
After a few months of lead time by the management team, further integration into the company begins[1]. The goal remains the same: a parallel process of expanding awareness and new behaviours on the one hand, and adapting structures and processes on the other[1].
Cascading programmes: Those who teach learn the most themselves
Programmes in which company managers run cascading orientation programmes for other managers have proven their worth[1]. The principle is: those who teach, learn the most[1]. This approach exponentially reinforces cultural transformation.
As part of the cultural transformation, all departments, together with their employees, begin to regularly address fundamental questions[1]. They clarify how the new values are lived in day-to-day work, what obstacles there are and how these can be overcome.
Adapt structures and systems to the new culture
Anchoring cultural elements in the remuneration system is of crucial importance,[1] otherwise experience has shown that too much attention is paid to the hard facts[1]. If cooperation is one of the values, the target and remuneration processes should be adapted accordingly[6].
The question is: Do individual targets and bonuses still make sense or is it time to introduce a standardised profit-sharing scheme?[6] A thorough assessment of the current corporate culture is the start.[7] Identify strengths and areas for improvement to set the framework for a targeted development movement.
BEST PRACTICE with a customer (name hidden due to NDA contract): A service company with 200 employees realised that its remuneration structure encouraged competition rather than collaboration. Each employee was paid according to individual targets. The company introduced a new structure: 60 per cent of variable pay is based on team targets, 40 per cent on individual performance. Communication between teams improved significantly. Joint projects were realised more quickly. Employee satisfaction rose by 28 per cent within a year.
Metrics and controlling in cultural transformation
An evaluation by country, location, business unit and hierarchy level enables the targeted use of interventions[1], which can be coaching, training processes or structural changes,[1] and enables the active management of cultural transformation[1].
The definition of KPIs or key performance indicators is crucial.[2] An example could be: Reduce re-delegation cases between management levels by 50 per cent by the end of the year[2] Such concrete targets create clarity and commitment.
The four-quadrant approach for systematic cultural transformation
Defining the implementation and communication strategy according to the four-quadrant model as well as individual and organisational development goals completes the preparation process[1]. This approach ensures that all aspects of cultural transformation are taken into account.
Implementation takes place on several levels simultaneously. In addition to reviewing and adapting structures and processes, beliefs, values and standards also need to be reorganised[3].
Overcoming resistance: Psychological and emotional dimensions
Before starting a cultural transformation, it is important to understand: Organisations change while people transform.[13] Therefore, cultural transformations take time and are only successful if the new culture is actively supported by the majority of managers and employees[13].
Resistance often arises from fear of the unknown. People are familiar with established patterns and fear a loss of status or control. Leaders must not ignore these fears, but take them seriously and address them. Transparent communication about the reasons for and objectives of the cultural transformation helps many people to understand the meaning behind it.
A top-down and bottom-up approach combines guidelines and participation at the same time.[2] Managers define the goals of the cultural change process (top-down), while employees help to identify the framework conditions and develop proposals (bottom-up).[2] Managers review the proposals and decide on final measures, while employees provide feedback on obstacles.
Practical tips for leaders on successful cultural transformation
The following concrete measures will support you in your cultural transformation:
Firstly: Clarify the strategic objective. A clearly defined goal for the company is the starting point for serious cultural change.[7] A clearly defined goal mobilises energy and provides direction.
Secondly, carry out an honest analysis of the current situation. From as-is analysis to goal definition and regular reviews, cultural transformation is similar to other business processes[1], through the definition of vision, mission and value statements and associated behaviours[1].
Thirdly: Involve employees at an early stage. A feedback process is often used to recognise individual
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