Changing Corporate Cultures: The Bad, the Ugly and the Good

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What do we mean by corporate culture? It has been defined as the shared values, attitudes and behaviours that characterise members of an organisation, which in turn are linked to the organisation’s strategies, structure, and approaches to its stakeholders. These patterns of values and behaviours define what is encouraged and discouraged in the organisation – they may be implicit or explicit.

All thought leaders would agree that it is no easy feat to change a corporate culture, just as it is not easy for individuals to change entrenched values, habits, behaviours. Research has shown that only 10% of people who have had heart bypass surgery or an angioplasty make the necessary major modifications to their diets and lifestyles. In other words, most individuals (and organisations) don’t alter behaviours, despite overwhelming evidence that this is necessary.

In a previous article, I referred to a model which shows that humans typically deal with major change and uncertainty in four phases: denial (this isn’t happening; this won’t affect me), resistance (this is terrible; I’m going to fight this), exploration (this could work; I’ll give it a try); and finally commitment (this is great; I’m going to make this work). Unfortunately, many people and organisations never get to the commitment phase.

I attended a seminar on mergers and acquisitions some time ago, where an attendee told us that he was part of a company which had been taken over by another company 18 years ago. The employees of his company were still wearing the ‘old’ company uniform and not communicating with employees from the ‘new’ company! Another attendee then shared that this had happened in his company, but it was only twelve years ago!!

Fortunately, many organisations have shown us that major, positive corporate change is possible. My next article will examine some key organisations that didn’t change when they needed to and in fact paid the ultimate price (the ugly), as well as organisations that were quite unethical and even unlawful, and also paid dearly for those transgressions (the bad). The following article will then examine organisations that overcame significant challenges and implemented effective strategies to become highly successful (the good).

Corporate Paradigm Shifts
A paradigm is a distinct set of thought patterns, a way of looking at something. Albert Einstein’s theory of relativity created a new paradigm which challenged the Newtonian way of thinking.

Organisations have paradigms that drive their strategies, policies and procedures. When there is a takeover or merger, paradigm shifts are likely to occur. I have worked with some major organisations involved with mergers, and seen first-hand the paradigm shifts and also paradigm paralysis (inability or refusal to see beyond the current models of thinking) that can occur. This can be driven by resistance to the merger/takeover, particularly when the corporate cultures of the two organisations were very different. For example, in one merger, the one company had a fairly informal, laid-back culture, whereas the other company was more formal, aggressive and rules-driven. Employees of both organisations were quite critical of, and threatened by each other.

In the next two articles, we will see examples of paradigm paralysis, as well as powerful paradigm shifts.

Two questions for you: how would you describe your organisational culture? Does it resist or encourage positive and necessary change? And how do you deal with significant change?

Narayan van de Graaff

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