Organizational culture is increasingly recognized as a strategic and competitive advantage, both for operational performance and to attract the best talent. According to McKinsey & Company, culture “is the common set of behaviors and underlying mindsets and beliefs that shape how people work and interact.” It matters, note McKinsey’s researchers, because top corporate cultures deliver up to 200% higher shareholder returns than those with poor or negative ones. Further, healthy cultures are adaptable and respond well to change, while poor ones undermine performance.
For companies seeking to change their culture, the task can seem daunting. But it’s not impossible, according to experts at three MHI member companies: Mercedes Barragan, diversity, equity and inclusion manager at Dematic; Yedidah Glass, North American marketing manager at Doosan Industrial Vehicle America Corp. (DIVAC) and member of MHI’s Diversity, Equity, and Inclusion (DEI) Committee; and Steve Pickfield, co-CEO of PSI Engineering.
Here, the trio share insights on transforming the fundamental foundation of corporate success.
Q: Can a company’s culture be changed?
Glass: It is very possible to change a company’s culture. Most definitely it is a top-down effort; management sets the tone. I have recently seen leadership in a few companies acknowledge and embrace that the needs of their employees outside of the building greatly affect the outcomes inside the building. Most of the time, people just want to be heard. But to know your company is actively soliciting your input on how to improve your experience, productivity and growth is empowering and benefits both sides.
Pickfield: Changing a company culture is a large-scale activity that needs careful planning and commitment at all levels. This process is not like a light switch where one day you wake up and the company’s culture is changed. But it can be done.
Barragan: In my experience, company culture can change—but it’s incredibly hard work. Some companies try to make cultural changes by creating new policies or sending internal announcements from leaders about the importance of accepting others. Those things should be done, but it’s not enough.
Q: What are the necessary “ingredients” for cultural change?
Barragan: First, a genuine willingness and desire from all people leaders to create a work environment that centers around the employee experience. Change management also has a critical role; without an effective plan to communicate the ‘why,’ it is far too easy for the messaging to get lost. Also, having the right leadership, as so many behaviors cascade from the C-suite. In addition to executive leaders’ commitment, operational and people leaders need to be included in the design process for executing and supporting the change, instead of just being informed. Finally, align employee resource groups (ERGs) with the HR and business strategy by working collaboratively and listening to their needs. The organization’s culture change goals are likely the things they want to change too.