Your Complete Guide to Culture Transformation
Our research shows that companies must address what they are made of–body, mind and soul–or face disruption.
What is cultural transformation?
Cultural transformation is about the accelerated changes made by companies that focus on growing their businesses from the inside out – empowering people and the way they work through a human-centered approach. It has become more relevant than ever as organizations build the resilience required to serve their stakeholders in the midst of world-altering shifts. Prophet’s 2020 global research report: “Catalysts in Action: Applying the Cultural Levers of Transformation” intends to help organizations determine how and where to focus their efforts to continue powering their transformations from the inside out and ultimately emerge even stronger.
This report builds on our 2019 research, in which we first identified the cultural levers of transformation. A strong slate of global leaders contributed to these findings via in-depth interviews and we’re fortunate that many of these individuals have once again participated in our 2020 research to share progress and lessons learned, in addition to the stories and examples gathered from other leaders to demonstrate the power of cultural transformation in action.
Why is cultural transformation important?
The future is here. Companies no longer have discretion when it comes to transformation for the Digital Age; it is their only option. Deferred digital decisions – which previously may have shown up as small chinks in a company’s armor – have now exposed significant vulnerabilities in organizational cultures across industries and regions, shattering any reason to hold onto historical behaviors, skillsets, organizational designs and operating models.
Our research shows there is a need to address culture as a part of an effective transformation.
Though the context for companies’ transformations has dramatically changed, the core methods have not. Prophet’s Human-Centered Transformation Model acknowledges that just like the humans that comprise them, organizations have DNA and a Mind, Body and Soul and successful transformation depends on these elements working in sync to drive sustained cultural change.
“Focusing on levers that help create safe spaces and meaningful mechanisms for employees to adapt to the change are critical.”
The application of these cultural levers invites its own set of questions and challenges. We’ve observed that organizations are often unsure where to start or where to go next in terms of which levers to pull. Our research report identifies four pathways of cultural change that are intended to help organizations focus their efforts and make sustained progress toward cultural transformation. These pathways are not intended to be prescriptive but rather a helpful aid for how organizations might navigate transformation based on overcoming primary roadblocks. The report also provides best practices and stories of how other companies are moving forward in making progress against these cultural levers.
Four Pathways of Cultural Transformation
We’ve identified the following four pathways of cultural change. These pathways align to our Human-Centered Transformation Model and can be viewed as either entry points into the model or ways to move through the model, i.e., where to focus next:
Defining the Transformation
Consider this pathway to be the “control tower” for all other pathways. This is where a company solidifies its DNA: its business and brand strategy; purpose and values and employee value proposition. Once established, DNA serves to continually direct the ongoing change. In order to successfully define the transformation, organizations must set a powerful, actionable ambition and clarify the leaders who will lead the cultural transformation.
Directing the Transformation
Directing the cultural transformation requires focusing on cultural levers related to the Body of the organization. This focus ensures organizations are taking a holistic view of the governance, processes, roles, systems and tools needed to enable an operating model that makes transformation real. Many organizations have made progress on a clear roadmap and KPIs, though other key levers, such as pushing decision rights downward have proven more challenging. Our research provides examples from organizations that are successfully overcoming these hurdles. Furthermore, a powerful story emerged in the data where organizations with an empowered transformation management office (TMO) are experiencing more positive impact and transformation success.
Enabling the Transformation
Enabling the cultural transformation requires focusing on the Mind within our Human-Centered Transformation Model. The Mind is where organizations identify, source and build the capabilities required for employees to thrive and for organizations to succeed in the Digital Age. These organizations will benefit from a focus on levers related to upskilling their employee bases and upgrading the ways they identify, recruit and retain talent – resulting in a supercharged workforce that is prepared to take ownership of operating in new ways.
Motivating the Transformation
Organizations that are motivating cultural transformation must focus on the organization’s Soul. In our Human-Centered Transformation Model, the Soul is where leaders are equipped to both talk and “walk the talk” around the transformation journey to create trust among employees to adopt and evangelize new ways of working. Stories, rituals and symbols help build belief among employees and connect their day-to-day work to where the organization is heading. Focusing on levers that help create safe spaces and meaningful mechanisms for employees to adapt to the change are critical, as is recognizing progress being made along the way and sharing these stories of both successes and lessons learned.