Successfully Leading Culture Change: A Strategic HR Guide

Shaping a cultural change within a company can be a major challenge.

This type of change is essential to align employee behavior with current and future company goals. However, it comes with a number of challenges that need to be addressed and managed.

Learn about the challenges HR experts have identified in this process and the recommendations they offer on how to overcome the obstacles to a cultural change in your company.

The Importance of a Strong Corporate Culture

The significance of a positive corporate culture cannot be overstated.

Companies that fail to actively shape their corporate culture or allow a toxic culture to grow and spread will inevitably face a variety of problems. Labor lawyer Richard Celler is all too familiar with the costs of a toxic corporate culture: "Harassment, bullying, violations of employee rights, and other abuses are the result of a toxic work environment – and cost employers millions in legal fees."

The sad thing about it is that many of these complaints could have been avoided if the need for a changed corporate culture had been recognized. Fortunately, a toxic corporate culture can usually be detected early, and if the associated behaviors and attitudes are curbed in time, many problems can be avoided later. As an employer or HR manager, it is your responsibility to address these harmful behaviors.

What is meant by cultural change in an organization?

Cultural change occurs when an organization aligns its internal culture with its vision and core values. This process, also referred to as cultural transformation, helps the company achieve new goals.

Corporate culture, that is, the beliefs and behaviors that shape employees' actions, plays a crucial role in the success or failure of a company. As a result, more and more companies are paying special attention to the impact of their culture. This presents HR professionals with a unique opportunity to actively help shape the implementation of cultural change within the organization.

Corporate culture is more of a feeling than a measurable factor. At its core, an organization's culture is the shared perception of 'how things are done.' This perception may align with the stated policies, values, or guidelines, but it does not have to. Good HR departments have a sense of how employees feel and can therefore play a leading role in shaping and influencing corporate culture.

As companies struggling with their culture can confirm, managing corporate culture is a challenge. This is particularly difficult when a change is necessary. This is partly because corporate culture consists of multiple components that are intertwined and influence each other: values, goals, roles, processes, communication practices, and attitudes.

Changing corporate culture is a comprehensive undertaking that requires careful strategy and planning. It presents the particular challenge of needing to start from the leadership level while also being a company-wide process. First, however, it is necessary to determine when a cultural change is needed. After that, it can be decided how this change can be influenced.

What motivates change in organizations?

Many different circumstances can lead organizations to recognize the need for a cultural change in the workplace.

Perhaps your company has recently undergone significant growth, had changes in leadership, or wondered why many of your good employees are pursuing careers elsewhere. These signs (and others) indicate that it may be time to overhaul your company culture. According to the experts consulted, here are some of the most common reasons companies need to manage culture in the workplace.

Employees

Growth

As companies grow, the need for cultural changes in the workplace often increases. Flexible working hours, for example, may be suitable for smaller businesses, but as the company grows, more structures and processes are required to ensure reliable staffing. In addition, the visibility of the CEO usually decreases with growth, reducing their direct influence on corporate culture.

Company growth can also lead to the emergence of subcultures and give more room to a toxic culture that can spread unnoticed among a few problematic employees. Your growing company may also be subject to more regulatory requirements, and your governance model may need to be adjusted to support growth.

However, there are also positive aspects: A growing company brings in new employees with different perspectives, which can be very beneficial. New leaders may also recognize a toxic work environment and thereby initiate an important cultural change.

Performance

Many companies look for top performers and overlook the fact that they may already have motivated and qualified employees in-house.

Before embarking on a search for external talent, you should analyze your company culture and assess whether it fosters the development, innovation, and enthusiasm of your employees for their work. Jon, a marketing expert at Authority Hacker, is convinced that a cultural change can help better train employees and provide them with the tools needed for continuous growth within the company.

Employee Turnover

Employees occasionally quit. However, if too many leave the company and you don't know the reasons, you should reconsider your company culture.

Corporate culture expert Shane Green knows: “Younger workers are not afraid to change their job or manager for a better situation. If a company wants to retain its best and most talented employees, it must provide them with a good to excellent employee experience.”

Mergers and Acquisitions

When it comes to change management in corporate culture, senior consultant Beth Browde from Mercer knows: "Corporate culture plays a crucial role in mergers and acquisitions."

When companies merge and leadership changes, the corporate dynamics often change as well. Successful mergers and leadership transitions depend on the successful integration of corporate culture.

Crisis

Sometimes the reasons for a cultural change in the workplace are not positive.

Serious issues with customer complaints, employees, management, and so on can lead to legal disputes, company losses, and much more. In such times, business owners and HR managers alike consider whether a cultural change in the company could prevent these problems in the future.

Regardless of your motivation for a cultural change in the workplace, a good corporate culture offers numerous benefits, including:

Higher job satisfaction
Less stress
Better performance
Lower employee turnover
And much more.

Building a strong, successful corporate culture through organizational cultural change is crucial for the long-term success of any company.

How to Change a Poor Company Culture

It’s no secret that your company culture can be either your greatest strength or your greatest weakness. Watch out for warning signs of a dysfunctional company culture. These warning signs include:

Lack of core values
Leaders not embodying the core values
High turnover
Poor company reputation
Frequent employee lateness or absenteeism
Lots of office gossip
Obvious contradictions between words and actions
Unfair competition among employees
Insufficient recognition and reward of employees
Employees skipping lunch or regularly working nights and/or weekends

As soon as you recognize negative or harmful cultural tendencies, it's time for change. However, this is not about a few individuals dictating a set of values to the company. This approach hardly changes anything.

Instead, it is important to identify and address the underlying issues to correct the course and transform the corporate culture. These four steps are a good starting point to get your company back on track:

Create an environment of accountability – from leaders to individual employees.
Discuss with your teams what matters most to them.
Implement better practices based on feedback.
Continuously assess your corporate culture.

5 Challenges in Managing Cultural Change in the Workplace

Employers face numerous challenges when shaping cultural change in the workplace. Experts explain the key points here.

1. Resistance to Change

Heidi Lynne Kurter, founder and CEO of Heidi Lynne Consulting, explains: "The biggest challenge in trying to change corporate culture is resistance to change." Employees do not like changes in the workplace, and some react more strongly than others.

Employees who spread negativity at the grassroots level can be particularly harmful to new cultural initiatives. Matthew Ross, co-owner and COO of RIZKNOWS and The Slumber Yard, notes that these individuals 'tend to speak out against management and rally other employees around certain ideas and concepts.' In such cases, it is crucial to explain why the changes are important and what benefits they bring.

Even after changes have been implemented, Jim Robertson, CEO of The Alternative Board Woodlands, observes: 'Employees tend to fall back into old habits rather than embrace the new developments.'

Resistance to change does not always manifest itself in open rebellion. HR manager Alex Robinson from Team Building Hero explains: “With older employees, the challenge often lies in silent disagreement and declining productivity and job satisfaction,” which can be just as damaging to your company. Successful culture change management means involving employees in the transition process and gathering their feedback.

2. Lack of motivation for change

Getting employees and managers on board with a workplace culture change can be a major challenge.

Resistance to change does not always manifest as open rebellion. HR manager Alex Robinson from Team Building Hero explains: "With older employees, the challenge often lies in silent dissent and declining productivity and job satisfaction," which can also harm your company. Successful culture change management means involving employees in the transition process and gathering their feedback.

Gaining the motivation and support of leadership is also crucial and can even be more challenging than convincing employees, especially if they do not see a need for additional time and resource investment to change the corporate culture. However, leadership support is important because corporate culture impacts the organization from the top down. If the leadership team is not willing to make changes, your company will face difficulties.

3. Lack of a Sense of Responsibility

Changing the company culture is a task for everyone, not just the HR department.

Julie from 4Good Consulting knows: "Not everyone feels responsible for a cultural change or believes they can influence it." By informing your employees about the planned changes and testing various initiatives with teams, you receive feedback. At the same time, your employees become aware that they are an important part of the process.

4. Complacency

People are reluctant to change the status quo. Joshua M. Evans of Culture Consulting Associates explains: "People have become so accustomed to the status quo that they resist anything new, even if it is better, just to preserve the familiar." Clear cultural expectations help overcome complacency, and Evans believes it is important to "continuously communicate and reinforce the new cultural expectations."

5. Limited Potential

Some companies recognize the need for a cultural change when faced with the limited potential of their employees. By investing your budget and time in training and resources to further educate your employees and create a corporate culture of learning and growth, you can overcome this challenge.

6 Solutions for Successful Management of Corporate Culture

The challenges of managing cultural change in the workplace can be enormous. However, there are solutions that can make the process easier and help you stay calm during times of major change. Here are the key recommendations from HR experts.

1. Involve all employees

Actively engage your employees in shaping and developing the corporate culture.

Heidi Lynne Kurter, founder and CEO of Heidi Lynne Consulting, says: "When it comes to a cultural change, collaboration is key. Your employees shape your company culture, and not involving them in the process only worsens an already strained relationship. Culture is not a one-way process. It is carried by all employees within the company." Listen to the feedback and ideas of your employees and act on them.

To promote collaboration with your employees, be transparent and authentic from the start. Also, try to understand your employees' feelings by holding one-on-one and group discussions where you can openly address concerns and overcome obstacles.

2. Don’t let anything slide

Matthew also emphasizes the importance of consistency. “I think it’s important to stick to the new guidelines or rules from the very beginning once you’ve implemented them,” he says. “Nothing should be overlooked, no matter how small or big the mistake is.”

After implementing changes, consistent follow-up is essential. Jon from Authority Hacker explains: “I’m convinced that consistent and regular follow-up is one of the most important actions any management team or company can take to embed new behaviors.”

Most employees support a cultural change in the workplace. But what if you encounter someone who resists it? Matthew also advises: "If you observe an employee behaving contrary to the new company culture you want to establish, act immediately and make it clear that this will not be tolerated. If you let things slide here and there, employees will no longer take the new changes and policies seriously."

3. Communicate Early

Don't rely on informing your employees about planned workplace culture changes with a single company-wide email. Alex Robinson from Team Building Hero recommends: "Schedule one or more meetings before any change to involve employees and get their buy-in." His company planned the changes in advance and communicated the entire process transparently to employees, so that "the policy change was no surprise to anyone."

The most important insight is that changes should not come as a surprise. If you talk with your employees about which values are important to them, which changes you are planning, and how you will implement them, you reduce resistance to change. Nicole Dorskind, Managing Director of ThirtyThree North America, emphasizes: 'The overarching vision for the change should be communicated continuously in a clear and consistent manner.'

4. Implement Changes Gradually

A cultural change within a company should take place gradually.

Instead of a rapid succession of announcements or meetings, give employees time to adjust to the change.

The implementation of these changes may take weeks or even months, but it is easier for your employees. Frances Geoghegan, CEO of Healing Holidays, notes: “One should definitely not scare them by sending them to a completely new workplace the very next day.”

Getting accustomed to a new work environment and a new corporate culture is not easy. Frances advises: "My best tip for overcoming this hurdle is not to implement all changes at once. Introduce changes gradually; this gives your team members enough time to get used to the new culture." By introducing changes gradually, you encounter less resistance, and your employees feel more comfortable with the transformation.

5. Gamification

Other companies have successfully used gamification to shape their corporate culture – that is, to use playful elements to promote understanding, engagement, and support.

Cristian Rennella, CEO and co-founder of oMelhorTrato.com, successfully tested this strategy in his company. "To reduce employees' resistance to change, we develop games, and the winners receive corresponding prizes. We introduce rules, point systems, leaderboards, etc. Thanks to gamification, we were able to increase the acceptance of our new culture by 26.3% without affecting the workflow."

6. Increasing Employee Satisfaction

Sometimes other changes, such as a relocation, also make workplace culture change management necessary.

Any kind of change is difficult. Nate Masterson, HR manager at Maple Holistics, noted that moving into an unfinished office with unpainted walls and folding tables as desks was not exactly conducive to employee motivation.

Nate says, "To improve the work atmosphere and make employees happier, we tried to provide some variety even during the renovation work. We set up exercise balls as an alternative to chairs to make work a bit more fun." Such simple changes, along with offering "daily snacks to boost morale," helped keep employees satisfied and positive during this time of change.

7. Start with a clear vision.

Before you begin making changes, define your goals and check whether your statements and actions contradict each other. Don’t change anything just because your competition has done so.

Assess all the impacts of planned changes on your company. Jim Robertson from The Alternative Board recommends: "Before introducing a new corporate culture, you should thoroughly analyze the financial benefits for your company."

To ensure the success of your workplace culture change, make sure your company goals align with your corporate culture. Reward the values you stand for. If you encourage innovation but punish failures, which typically come with risk-taking, fewer employees will be willing to try out innovations.

4 Examples of Organizational Culture Change

It can be insightful to see how other organizations have focused on specific areas to change their culture.

Here are some examples of organizational culture change that can serve as inspiration for you.

Adobe

Adobe is a company that has built a culture of trust. They go to great lengths to assign challenging projects to their employees and then take it a step further by providing them with the necessary trust and support to succeed. Adobe has deliberately created a culture that avoids micromanagement. Instead, the company trusts that employees will manage and complete their projects in the way they see fit. The company's success story with its innovative products proves the benefits of this culture.

Salesforce

Salesforce is well-known in sales circles, but also for its strong social corporate culture, which is reflected in its program to promote the common good. The company donates 1% of its equity, 1% of its products, and 1% of its employees' work time annually to volunteer projects. This social commitment not only helps others but also promotes team cohesion, strengthens brand recognition, and can contribute to attracting new employees.

Other companies like Atlassian and Google have adopted this concept for their own programs to promote the common good.

Warby Parker

Selling prescription glasses online doesn’t exactly sound like an industry known for its corporate culture, yet Warby Parker has managed to achieve just that. The company deliberately places importance on a positive corporate culture and has a dedicated team that constantly promotes it. This team organizes, among other things, group lunches, events, and programs to strengthen the sense of community.

Zappos

Zappos, the online shoe retailer, has developed a corporate culture that others would like to copy. Zappos is even considered a model for successful cultural change and offers a three-day 'Culture Camp' to show HR managers how they can build a similar culture. Their secret: corporate culture is their top priority – from the CEO to each individual employee. They place great importance on customer service and promote it through their corporate culture. In fact, corporate culture plays an important role in the hiring process.

Gaining Employees for Company Culture

Even if you can't convince every single person to embrace a cultural change in the workplace, you can promote measurable behaviors and hire new employees who embody your values. According to corporate culture expert Shane Green, new employees are best aligned with the company culture by:

Define values and expectations during the job interview.
Ensure that new employees have positive experiences in their first days at work and feel connected to the brand.
Provide comprehensive onboarding and training to optimally prepare new employees for success.
Reward good performance and hold accountable those who do not meet expectations.
Communicate effectively. Make it easy for your employees to work, access information, and receive their pay.
Ensure that leaders also serve as role models.
Role models inspire and put employees at the center; leaders focus on processes.

Nicole Dorskind from ThirtyThree advises employers to look at their teams from a different perspective. "Essentially, you should reorganize your team every day. Your employees need to understand what distinguishes your company in its current form and what cultural goals it pursues. The more consistently and convincingly this is communicated, the more likely the right employees will stay in the company, become advocates, and actively accompany it on its journey."

Shaping cultural change in the workplace successfully is a challenge. But with these expert tips, you are well on your way to creating a corporate culture that is geared toward success.

Key Insights

Cultural change within a company requires continuity, transparency, and effective communication. The more clearly your corporate culture is defined, the stronger your employees identify with your company goals.

With these expert tips, you can make the process smoother and create a corporate culture focused on success.

Successfully managing cultural change is a challenge that demands continuity, transparency, and a company-wide commitment led by accountable leadership. The core strategy involves moving beyond simply stating values to embedding them in daily behavior and rewarding those who embody them. For HR teams looking to manage this complex, multi-faceted transformation, the right tools are critical. IceHrm provides the ideal foundation by enabling HR to operationalize cultural alignment: its Performance Management module can be used to continuously reward and hold accountable employees and leaders based on the new cultural values; its Communication tools (like company announcements and group features) ensure the new vision is communicated clearly and consistently; and its Onboarding features ensure new hires are immediately indoctrinated into the desired culture. By leveraging IceHrm, HR can systematically implement, monitor, and reinforce the new cultural expectations, moving the organization smoothly toward long-term success.