Written by
Rose Gailey
Heidrick & Struggles

Published
20 Feb 2018

The four principles of reshaping culture

20 Feb 2018 • by Rose Gailey

Culture has become one of the most important words in corporate boardrooms. As an HR leader, how can you get buy-in for culture change and demonstrate success?

This article is provided to Changeboard by our Future Talent 2018 partners, Heidrick & Struggles. You can see Heidricks' Managing Partner Colin Price in conversation with Aviva's CEO, Mark Wilson, at Changeboard's Future Talent Conference 2018.

Companies that focus on culture are becoming icons for job seekers, especially the future generation of leaders, who place a premium on work-life balance and culture fit in choosing where to work.

Most CEOs know that culture matters and can have a strong impact on business results. And yet, many HR leaders are tasked with reshaping the organisation’s culture - without the support and involvement of the CEO or other executives. This lack of support leads to many culture-shaping efforts failing or falling short of their potential.

Culture needs to start at the top, with the CEO and senior team setting the example. HR leaders who successfully shift their company culture bring their CEO into the process and focus on the following four principles.

Purposeful leadership

Leaders cast a powerful shadow. A successful culture-shaping process requires an integrated approach; therefore, the culture needs to be explicitly defined through values and behaviors and modeled by members of the senior team.

HR leaders and CEOs must work together with a clear, compelling purpose for themselves and their organization, coupled with a strong business rationale. And the process needs to be supported by resources and a systematic execution plan.

When CVS was rebranding to CVS Health in 2014, the leaders took a hard look at their culture and established an organisational purpose focused on health. They determined that to credibly support the health of their customers and be true to their purpose and values, they should stop selling tobacco products. CEO Larry Merlo led this change and championed the decision.

Personal change

The more HR leaders and CEOs focus on shifting their employees’ mind-sets and behaviors in a desired direction, the more successful they will be.

People need to be clear on the “from and to” of the culture-shaping journey to understand what's in it for them to make a personal connection to the desired change. This connection occurs on an emotional and intellectual level, can only develop through insight-based learning, and is best accomplished in natural work teams to shift thinking and reinforce change.

Merlo’s deep personal commitment to shaping the culture was clear—after all, he and the rest of the CVS leadership were willing to risk the $2 billion in sales that tobacco products brought in each year.

The leaders recognised that voicing their support or intentions wasn't enough—that they had to commit personally to show employees that they really meant it. For some, including executive vice president of CVS Health Helena Foulkes, whose mother died from lung cancer, the commitment was an easy one. Paired with learnings and coaching, this obvious commitment made a lasting impression on employees throughout the organisation.

Broad engagement with energy, momentum, and mass

HR leaders, with the sponsorship and commitment of the CEO, should implement an integrated process to shift behaviors, reinforce principles, apply learning, and measure culture changes across the organisation.

Momentum, energy, and critical mass are needed to engage people in the culture at all levels of the organization because cultures resist what is most needed. HR leaders, then, should direct the change process as quickly as possible from the CEO team to next-level teams to the whole organisation.

An active, visible group of senior leaders and culture champions who get the culture, demonstrate it, and communicate it in actions and words will ensure the culture sticks. CVS trained and deployed such culture champions across the organisation - from the executive team to the front lines. These facilitators ensured the momentum didn’t start and end with the leadership but rather carried through the entire organisation.

Focused sustainability

Systematic reinforcement is needed at the individual, team, and organisation levels. Institutional practices, systems, performance drivers, and capabilities need to drive toward the desired culture - including, but not limited to, communication, training, measurement, rewards and reinforcement, performance management and HR practices, and physical layout.

Visible application, measurable results with feedback and coaching, rewards, and consequences are needed to make the culture real and create accountability. Organisational culture is a journey, not a destination.

CVS lives that value by consistently taking the company’s pulse and reinvigorating their commitment to their values. For instance, along with cutting tobacco products, the company has moved to stock more healthy snacks, such as KIND bars. They also began placing those items near the checkout instead of common impulse items like candy and cookies. And CVS Health continues to develop and shape their culture, recently with a focus on inclusion. Leadership is working on stepping back to make sure they have the right mix of skill sets, backgrounds, and perspectives—and that each one of those is being harnessed and heard.

Culture and business performance

Over time, a sustained commitment to culture can generate significant benefits. Consider the example of financial services company USAA, where CEO General Jose Robles drove a sustainable culture change by creating an army of champions whose role it was to drive long-term change.

With this focus, the team was able to create the highest customer loyalty and customer service scores in the United States, ultimately growing the business by 45%.          

Too many organisations neglect the role that organisational culture plays in business performance. Through a combination of purposeful leadership, personal change, broad engagement, and focused sustainability, smart HR leaders help involve everyone from the top down and shape their company’s culture - instead of allowing the culture to shape the company.

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About the authors

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Rose Gailey is a partner in Heidrick & Struggles’ Huntington Beach office. She leads the center of excellence in culture for Heidrick Consulting’s Senn Delaney Culture Shaping Practice.

The author wishes to thank Larry Senn, the founder and chairman of Senn Delaney, for his contributions to this article.

Heidrick & Struggles