The most common time for an organisation to do a culture review seems to be after a critical event (for example following the Royal Commission in the Australian banking sector, or when there is a negative story in the press).
But why wait for a critical event? Are there other times that a culture review would be a very good idea?
By considering other times when a culture review might be in order many organisations may be able to avoid the critical event in the first place.
Here are 4 key times to consider a culture review:
When there is a new CEO.
Assuming there hasn’t just been a culture review this is a really good time to do one. It means that the new CEO can get immediate transparency on where the culture is hurting and helping your organisation and put steps in place from day 1 to make these changes. It takes time to change culture and yet the CEO is accountable, even when the culture is a legacy one from the previous leadership, so to get started on this early in their tenure as CEO is a really good idea.
When you have merged, or acquired, another company.
The new entity is the coming together of two cultures. You will want to actively design the culture of the new entity from the beginning.
The success of a post-merger integration is very dependent on the merging of the two cultures. There may be attributes of one culture that you want to preserve and expand across the whole organisation. Doing a rigorous culture assessment, that includes asking the newly merged organisation (if not all the organisation, then a significant part of it) what culture they need in order to thrive, is a great starting point for a successful merger or acquisition.
It is not necessarily the case that the acquired must subsume their culture into the culture of the acquirer. I have seen examples where the other way round can work too, especially when the acquired company has a cultural element that has been identified as a key enabler (for example in customer centricity or innovation). The key is to be intentional, about which parts, of which culture to dial up and down, and what the new culture needs to be.
When you have a major change of strategy.
I wouldn’t suggest that whenever you tweak your strategy you try to change your culture, but if you are embarking on a major change of direction then it’s a good idea to review your culture. Embedded in your strategic choices will be assumptions (“what must be true for this to be a great strategic choice”) some of which will relate to culture. So, as you pivot, check in on the new strategic assumptions, is there anything there that needs a different element of your culture to be dialled up or down?
These are the obvious points in time to do a culture review. There is another time though, and it’s more difficult to attribute to culture: it’s when some metrics, probably not all, are just slipping a bit.
When your culture dashboard has some amber flags.
This could be a subtle indicator, like turn-over, lack lustre results, project failures, customers leaving…. whatever you are regularly measuring, if it’s not going the way you want it to consider “is it culture or strategy?” It’s in these situations that it’s easy to explain away the outcomes to some other factors (market conditions, global challenges etc), so try to catch these moments when you are attributing changes to external events. It’s not necessarily your culture that is causing these changes, it’s usually a complex series of events and influences, but your culture is the “how” your organisation responds to these events. Your culture can make a bad situation worse, or not-quite-so-bad.
My final call out is the same as “when to review your strategy”, with best practise being that culture is something that is constantly monitored through the regular reporting of culture indicators on a culture dashboard and keeping communication channels open up, down and across the organisation.
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