With the effects of digital disruption sweeping across industries, very few organisations can afford to stand still. Businesses today face increasing pressure to transform, digitise and compete with new market entrants, pushing them to rethink their strategies and operating models. However, while many organisations are recognising the need to overhaul their strategies, many face a consistent roadblock – internal culture.
Recent research from Accenture Strategy explores how organisational resilience is impacted by the redesign of internal culture strategies. The research identified that the changes in strategy and operating model required for organisations to be resilient against outside disruptors are reliant on the improvement of internal culture.
Many CEOs and other senior executives have mistakenly assumed that change initiatives need to be driven from the top down. The rationale for this is that these executives consider corporate strategy and vision to be their responsibility, and therefore feel obligated to drive culture transformation. In contrast, Accenture has found that driving change too extensively from the C-suite level downwards is highly counter-productive. The most successful change initiatives occur when all employees are actively involved, particularly team leaders and middle managers.
Accenture’s research considered the experiences of nearly one million employees involved in change initiatives at more than 150 organisations across 25 countries. The research found that in the cases of those with the lowest performance, ‘top leadership’ was heavily involved in an attempt to change organisational culture, resulting in a severe disconnect with the rest of the business. Conversely, the high-performing organisations (in terms of business performance) were those with leaders who successfully engaged employees at all levels in the change initiative.
Interestingly, the research also found employees to be more likely to accept cultural transformation if they were involved in helping to shape those changes. Simply put, to be effective, cultural changes should have employee fingerprints on them.
One effective mechanism for accomplishing this is employee crowdsourcing. Take Amazon-owned Zappos for instance, an online retailer known for its employee-centric culture. Zappos CEO, Tony Hsieh asked all employees for input into one thing that could be changed about the organisation’s policies or processes, as a means to increase engagement with employees and support corporate transformation.
Peer coaching and peer-to-peer learning is also effective, with an objective of providing a safe environment for executives to share their difficulties, and the best practices for overcoming them. Furthermore, reverse mentoring allows leaders to adopt new behaviours when desired skills and behaviours are commonly found in more junior employees or those with a millennial mindset.
In the past, rigid, command-and-control, top-down approaches were effective in managing employees. But today’s fast-paced, digital world demands greater collaboration and innovation. Savvy executives are already recognising that the workforce of the future will require a flexible, purpose-driven work environment that delivers consistently across the employee experience.
Such cultural transformations, however, have hardly been smooth. In the past, training and communication (the focus of traditional change programs) have failed to make culture change stick, with many organisations failing to transition seamlessly. As a result, organisations have experienced dysfunction, the loss of top talent, and damage to the bottom line, all the while grappling with the risk of increased vulnerability to competitors.
The rise of digital is causing organisations to see seismic shifts from new competition, evolving consumer demands and changing employee expectations. To become a leader in the new digital economy will require new employee mindsets and behaviours. Overcoming the challenge of falling short when implementing culture changes by unleashing the potential of the workforce of the future will be the deciding factor between corporate transformations that fail and those that succeed.