Only 15% of companies that try to make a culture change are successful. Yet culture, according to Satya Nadella at Microsoft, is the biggest predictor of future success. The main reason that culture change rarely ever works is because it’s really, really hard to change. That’s why if you’re trying to change your culture, you’ll want to read Culture Renovation®: 18 Leadership Actions to Build an Unshakeable Company.
In today’s episode, we interview Kevin Oakes, the CEO and co-founder of the Institute for Corporate Productivity and author of the book. In this discussion, you will find out why rather than attempting to “transform” a new culture from the ground up, leaders need to instead spearhead a culture renovation.
Why Do Most Companies Fail to Change Culture?
CEO’s understand the connection between culture and performance (financial performance and the performance of their employees). Most of the time when company leaders try to change the culture, they fail because creating culture change isn’t easy.
Culture has a power of its own. But it doesn’t mean that you can’t change culture. It simply means that you need to follow a set of prescribed steps in order to change it. You need a blueprint for organizations to follow if they want to create a healthier culture inside their organizations. In his book, Oakes provides just that – the definitive blueprint for corporate culture change.
How to Plan A Cultural Renovation
Cultural renovation is like renovating an old house. You don’t do it without having a plan. You don’t go in and just start knocking down walls. You’ll probably knock down a load bearing wall and take the whole thing down!
A lot of companies, when they want to change culture, dive right into it — instead of taking the necessary steps to plan out what they want to do. Culture Renovation lays out the critical actions that need to be taken as you embark on any change initiative. In the planning phase, the worst thing an executive team can do is lock themselves in a room. Then, decide what the culture is today and what it needs to be tomorrow. You have to have a detailed listening strategy so you can understand employee sentiment. You need to have people express in their own words “what the culture is” and “what it needs to be for the future.”
But once that happens, it’s important to identify the influencers and energizers within your workforce. Every organization has well-known “go to” people for information, pep talks, and energy. These “go to” people will be at the center of the beehive. They need to be engaged early on in the change process. You want them on the inside, knowing what you’re trying to accomplish. They will have more influence over the rest of the workforce.
Microsoft’s Shift in Company Culture
Microsoft is a great case study in regard to cultural change. When Satya took over that company, it was not doing well. A lot of people predicted that Microsoft was going to go the way of Sears — a once relevant company that is going to die a slow death.
However, Satya said in his very first shareholder meeting that, “our ability to change our culture is going to be the biggest predictor of our future success.”
He partnered with Kathleen Hogan, head of HR at Microsoft, and with the HR team. He rallied the company around some simple concepts, one of which was the adoption of a growth mindset and the notion that knowledge sharing is power.
Satya wanted Microsoft to be a company full of “learn-it-alls,” rather than a group of “know-it-alls.” As a result, the company had a dramatic turnaround. Satya turned Microsoft into the highest market cap in the world. There’s not a single person within Microsoft who wouldn’t say the reason for the turnaround was the culture shift.
Leaders Need to Lead by Example
The shift to remote work has affected company culture in more ways than one. Employees aren’t going to do what’s written in a PowerPoint or framed on a wall. Rather, they will do what their leaders do. When setting out your new culture, you must train your leaders on emulating the behaviors that you expect and remind them that they represent the values and purpose of the organization.
Doing this takes a lot of time and work. But companies that are successful at changing their cultures, according to Kevin’s research, are the ones who put a lot more time, energy and budget into training. Such behavioral training, best taught by the leaders themselves, has proven to be successful in establishing role models and sustained change.
Who is Kevin Oakes?
Kevin is the CEO and co-founder of the Institute for Corporate Productivity (i4cp), the world’s leading human capital research firm focusing on people practices that drive high performance. Kevin is the author of Culture Renovation®, released in January 2021. Kevin is currently on the board of directors or advisory board of: Performitiv, Guild Education, EdCast, and Sanctuary. Kevin is also on the board of Best Buddies Washington and helped establish the first office for Best Buddies in the state in 2019.
To learn more about culture change, download this episode now.
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