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The digital world is changing rapidly and with it the demands on modern organisations. Many companies are realising that only a genuine cultural transformation will make them fit for the future. This transformation goes far beyond superficial adjustments and touches the deepest structures of an organisation.[1] Managers and decision-makers are faced with the challenge of guiding their teams through this process. KIROI Step 4 offers a proven model for systematically and sustainably implementing cultural transformation.
What is cultural transformation and why it is crucial for companies
Cultural transformation refers to the process by which organisations change their corporate culture in a targeted and systematic manner[1], and is not about quick fixes or temporary measures. Rather, the aim is to bring about far-reaching changes in values, beliefs and behaviour. These changes make a company competitive and resilient in the long term.
The importance of this process can be summarised in three key points. Firstly, a successful cultural transformation supports innovation and agility within the company[1]. Secondly, it significantly increases employee loyalty and satisfaction. Thirdly, it leads to better economic results and strengthens innovative power.
Companies like Microsoft are impressive examples of this. The tech company made a shift from a „know-it-all“ to a „learn-it-all“ approach.[2] This cultural realignment enabled Microsoft's return to growth and innovation. The company developed products such as Azure and repositioned itself as an industry leader[2].
Netflix also demonstrates the power of cultural transformation. The company trusts its employees with the greatest possible freedom and personal responsibility[2]. This cultural orientation has created a highly motivated and performance-orientated workforce. Flexible structures and decentralised decision-making significantly increase creativity and productivity[2].
The KIROI step 4: Core process of cultural transformation for decision-makers
KIROI step 4 is a structured model. It guides managers through the critical phase of implementing a new corporate culture.[15] This step follows the phases of preparation, analysis and strategy development. It focusses on the practical implementation and exemplification of the new values by the management level.
Decision-makers play a key role here. They are not only initiators, but also role models for the new culture.[1] Their authenticity and commitment influence how employees perceive and accept the transformation.
The four phases in the KIROI model of cultural transformation
The KIROI model follows a proven process with four main phases. Each phase builds on the previous one and creates a solid foundation for sustainable change.
The first phase deals with preparation and the corporate culture audit[11], where the current culture is determined. A selected team led by the management analyses the results. The desired target culture is then jointly developed. This phase creates clarity about the starting point and the target definition.
The second phase comprises the development of the guiding values and the mindset.[13] Based on the audit results, senior management develops the new guiding values. At the same time, the desired behaviour associated with these values is defined. These values must be fully in line with the organisation's vision and strategy.
The third phase focuses on implementing the new culture throughout the entire organisation.[11] Senior management and trained agents of cultural change actively exemplify the desired behaviour. They become role models for the new culture. Identified potential for improvement is addressed and existing cultural strengths are utilised in a targeted manner.
The fourth phase deals with process and system adjustments[13], where the new values are translated into concrete systems, processes and structures. This is essential in order to anchor the cultural transformation in the long term.
Why the focus on managers in cultural transformation
Managers are the drivers of every successful cultural transformation. They influence the entire organisation through their behaviour, communication and decision-making.[1] If managers do not exemplify the new values themselves, employees will not take them seriously.
An example from practice shows this clearly. At a large corporation, a value-based leadership development programme led to massive changes[4]. The managers learned what role leadership should play in order to actively shape the cultural change. They developed the ability to lead their teams in line with the new values. The result was a trusting leadership culture with more personal responsibility in the teams.
Practical implementation: How cultural transformation succeeds in practice
Theoretical knowledge of cultural transformation is one thing. Practical implementation is the other. Decision-makers need concrete tools and methods to successfully transform their organisations.
Dialogue rounds and exchange formats for cultural transformation
Regular dialogue rounds are a tried and tested tool. They enable employees to exchange ideas across departments and develop solutions together.[4] These formats create space for open communication and build trust.
At a medium-sized company with 270 employees, so-called circles were created in which teams met regularly[4] to discuss current challenges and work on them together. The result was significantly improved internal communication and more agile collaboration.
The Otto Group uses similar formats successfully as part of its „Kulturwandel 4.0“ programme[6]. The company focuses on transparency, feedback and a willingness to learn. Leadership at eye level is practised and not just preached. This has led to measurable economic success and greater employee loyalty.
BEST PRACTICE with a customer (name hidden due to NDA contract): A company from the financial sector initiated monthly leadership circles with over 50 managers. Open questions about the corporate culture were discussed there. After six months, measurements showed that mutual trust between the departments had increased by 35 per cent. At the same time, staff turnover in management fell by 12 per cent. The regular dialogue formats created psychological security and enabled managers to work together on the new culture.
Measurement and continuous adaptation during cultural transformation
Cultural transformation requires transparency and measurability. Companies must be able to continuously measure and adapt progress.[4] Tools such as digital surveys make it possible to involve the entire organisation and make progress visible.
A leading retail company used digital assessments to record the current culture and personal values of its employees[13], creating a solid database for the transformation. Regular repetitions of the survey showed where changes were taking place and where there was still a need for action.
The result was that decision-makers were able to make data-driven decisions. They knew exactly which areas were progressing quickly and where additional support was needed. This agility in implementation makes the difference between successful and failed cultural transformation.
Cascade model: How knowledge flows through the organisation
A proven model is the cascading transfer of knowledge and orientation.[11] The management team first receives intensive training and coaching. These managers then pass on their knowledge to other managers in the form of orientation programmes. This „those who teach, learn the most“ principle works effectively.
The Otto Group has successfully applied this approach[5] and has consistently pursued its path towards a more agile and innovative organisation. Through the Cascade model, cultural impulses were transported from the management to the operational level. This led to a consistent implementation of the cultural transformation throughout the entire organisation.
Frequent challenges in cultural transformation
Cultural transformation is not an easy process. Decision-makers should be aware of the typical challenges in order to address them proactively.
Resistance and unwillingness during cultural transformation
People are naturally afraid of change. Cultural transformation affects established routines, power relations and tried and tested ways of working. This resistance is normal and must be utilised constructively.
Decision-makers should speak openly about concerns. They should involve employees and take their perspectives seriously. When people see that their voices are being heard, resistance drops significantly.
Zappos, the online shoe retailer, shows how important genuine participation is.[2] Founder Tony Hsieh made corporate culture a top priority. The company promotes an open and creative atmosphere in which employees are allowed to contribute their personalities.[2] This culture of trust and autonomy massively reduces resistance.
Lack of time and resource constraints in cultural transformation
Cultural transformation takes time. It is a process, not a project with a defined end.[13] Many organisations underestimate the time required and set unrealistic expectations.
One example shows the reality: a value-based transformation with 270 employees took a year and a half before measurable effects became visible.[4] During this time, regular dialogue rounds were held, managers were trained and systems were adapted. It was a continuous, sometimes exhausting process.
Decision-makers should remain realistic and provide sufficient resources. Half-hearted attempts lead to frustration for everyone involved. Clear priorities and dedicated employees are essential for successful cultural transformation.
Best practices from the industry: How leading companies are mastering cultural transformation
Several companies have shown what successful cultural transformation looks like. Their experiences offer valuable lessons for other organisations.
Microsoft: From knowledge custodian to learning organisation
Microsoft underwent a radical cultural reorientation under Satya Nadella[2], transforming the company from a „know-it-all“ to a „learn-it-all“ approach. This meant that sharing knowledge became more important than hoarding knowledge. Mistakes were seen as learning opportunities rather than career damage.
The learning effects were enormous. Openness to feedback, a learning-orientated attitude and the promotion of innovation became central,[2] with managers playing exemplary roles. The result: Microsoft returned to the path of growth and developed products such as Azure that shaped the market.
Netflix: Trust as the foundation of cultural transformation
Netflix built its corporate culture on trust and freedom[2]. The company trusts its employees to work independently and take responsibility. This has led to a highly motivated and performance-orientated workforce[2].
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