How CEOs Can Change Their Organisational Culture for Business Success

Organizational culture is often touted as a soft aspect of business, yet its impact on hard metrics cannot be ignored. From employee engagement and retention to strategic alignment and innovation, culture can make or break your company. While 92% of leaders believe that shifting their organizational culture could enhance their Key Performance Indicators (KPIs), the challenge lies in how to initiate this change effectively.?

The Gravity of the Issue: Statistics

• Low employee engagement has cost $7.8 trillion to the global economy (Gallup, 2022).
• 70% of employees would consider leaving their current company due to cultural issues (Visier, 2022).
• Replacing an employee costs, on average, twice their salary and can go up to $100,000 (Visier Insights).

These statistics are alarming, especially when considering that most organizations either fail to measure culture effectively or do not act successfully on the results.

Real-World Cases of Negative or Positive Impact

1. Uber: In 2017, Uber faced a cultural crisis, where issues related to sexual harassment and discrimination came to light. The CEO had to step down, and the new leadership focused on shifting the culture to one of accountability and respect.

2. Microsoft: When Satya Nadella became the CEO in 2014, he worked on changing Microsoft's culture from a "know-it-all" to a "learn-it-all" culture. This cultural shift is often cited as a reason for Microsoft's resurgence and success in the tech world.

Ways CEOs Can Effectively Change Organizational Culture

Culture isn't just an HR issue; it's a business priority that directly impacts a company's bottom line and long-term viability. CEOs, given their influence and decision-making power, are in the best position to effect meaningful cultural changes. By taking a data-driven approach and having a concrete action plan, they can transform their organizations into more engaged, productive, and profitable entities.

1. Measure Culture Adequately Using Real, Unbiased Data

Use tools that are specifically designed to capture the nuances of organizational culture. Real-time surveys, AI-driven analytics, and frequent pulse checks can offer valuable data to analyze and act upon.

2. Identify Risks and Issues Promptly

Once the culture is measured, CEOs need to identify red flags in terms of employee morale, engagement, or any signs of a toxic culture. The quicker these issues are identified, the faster they can be addressed.

3. Use Predictive Analytics to Foresee Employee Behavior & Attrition

Data analytics tools are now sophisticated enough to predict patterns in employee behavior. Using this data can be invaluable in preparing for and initiating cultural changes.

4. Compare Over Time With Industry Benchmarks

Periodic benchmarking against industry standards can offer insights into how well the cultural shift is working and what further adjustments may be needed.

5. Prioritise Employee Experience and Corporate Innovation

A strong culture promotes a good employee experience and fosters innovation. CEOs need to ensure that the action plans prioritize these elements for long-term company success.

6. Have a Concrete Action Plan & Commit

After analyzing data and identifying issues, a concrete action plan with timelines, KPIs, and responsible parties must be developed and executed.

Culture is a critical lever for your business success. Yet, it is often what Peter Drucker referred to as 'the silent killer,' impacting your business in ways that are not immediately visible until it's too late.

So, ask yourself, as a leader:

• Have you measured your organizational culture accurately and objectively?
• Are you actively identifying and mitigating risks?
• Is your culture contributing to business metrics and employee well-being?
• Do you have a robust action plan to move from your current culture to your desired culture?

We'd love to hear your thoughts and experiences on driving cultural change.