This article is part of the series: The Financial Services Royal Commission and the talent landscape.

Culture is the lifeblood of an organisation. It reflects the values, beliefs, and behaviors that determine how people perform and interact with each other and customers every day. In some organisations, culture is widely discussed and understood. In others, it is an unspoken set of rules and norms. Culture, regardless of how it is communicated and understood, plays a critical role in organisational performance.

The Financial Services Royal Commission has heightened the awareness of Boards, CEOs and leadership teams across all industries that culture is critical to performance and reputation.

Traditionally, understanding the value of investment in culture has proven difficult, for it is not as tangible and easy to scope and measure as new technology or a new product, but this is now changing.

Recent Korn Ferry research and economic analysis demonstrates that for every $1 invested in human capital, $11.39 is added to GDP. This return clearly illustrates that investing in people can generate value for the organisation over time that significantly exceeds initial investment.

To date, approaches to delivering cultural change throughout an organisation and embedding and sustaining change have proven to be largely ineffective. From our experience and research, real culture change occurs when leaders consistently role-model the culture they desire of others and focus on changing employee behaviours around the things that really matter. Cultural change and sustainable results are achieved when seven key steps are followed:

  1. The CEO aligns the top team at the beginning of the process. Teams are successfully aligned when they define the right culture together to deliver on strategy and develop their own powerful convictions
  2. The focus is on changing employee behaviours and mindsets around a discreet number of specific interactions where the organisation needs to excel or has the potential to deliver a significant amount of value. Focusing on high-leverage moments has an immediate impact on employee engagement which rapidly impacts key performance indicators
  3. Front line staff are engaged face-to-face to understand organisational issues and to co-design the future culture. This immediately enhances levels of engagement around the process and generates ownership
  4. Values, behaviours and cultural attributes are defined before working through organisational levers that need to be addressed to embed and sustain change
  5. Real engagement taps into intrinsic motivation and it is sustained with the alignment of key organisational processes. To achieve engagement and enablement requires two parallel but integrated change initiatives: mindset shift and agile changes to structure and process
  6. There are frequent feedback loops with leadership workshops and employee pulse surveys to provide bottom up feedback and course correction
  7. Organisations invest in the right capabilities to lead and implement cultural change and they know it is likely that capability may not currently reside within the organisation.

Finally, cultural change does not always mean a total cultural revolution. Rather, it means understanding the rich heritage of the organisation, the elements of your culture that support business strategy and, equally importantly, what hinders it. It also involves enabling people do their jobs, preserving what makes the organisation strong and changing what doesn’t.

Learn more about the power of cultural transformation.

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About Contributor

Felicity brings over twenty years of experience leading teams and influencing stakeholders through organisational transformation and change. She has a strong track record of assisting business leaders to navigate through ambiguity and uncertainty to optimise business performance. Her industry experience spans Professional Services, Banking and Finance, Government, Transport, Retailing, Publishing and Media and Not For Profit.

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