Strategic culture change

Many companies are resetting their strategies to adapt to constant technological innovation, economic volatility, and globalization. But strategic change initiatives often collide with an organizational culture that not only impedes change but actively opposes it. What are the keys to developing a culture that supports—and even drives—a changing strategy?

At a glance

• An organization’s culture consists mainly of intangibles like shared beliefs, values, and assumptions that guide people in their day-to-day work.
• Senior leaders must develop a vision of an enhanced culture, communicate it, and cascade it through the organization.
• Managers are also culture carriers, modeling and rewarding the behaviors that define the new culture.
• Thoughtful organizational design can support culture change by defining lines of authority, accountabilities, and information-sharing and work practices.
• Systems such as compensation and reward schemes, performance management practices, and budget development processes can shape culture by promoting some behaviors and discouraging others.