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Use Corporate Culture to Drive Leadership Transitions

July 15, 2019 • Scott McMurray

Leadership transitions are all about change. New team, new goals. Get off the “burning platform.” Front-load major initiatives in the first 100 days just like FDR and his New Dealers. In this context, corporate culture is too often an afterthought, or it is considered part of the problem that drove the need for new leadership in the first place. That’s being short-sighted on both counts. Here’s why you should consider corporate culture an asset, rather than a liability, to help you shift your leadership transition to a higher gear.

Complacency culture

We tend to think of corporate culture as unchanging. It is how we behave toward each other, customers and other stakeholders. It reflects our group values. It is our rock and our ruler—our measure of success. It gives work meaning. It makes us us. What does any of the above have to do with change?

At times, certain aspects of a corporate culture recede to the background, while others come to the fore. This is especially true if a company has grown to lead in one or more fields. The disruptive, entrepreneurial drive that propelled the organization to the top is enshrined in aging photos and untouched files. Today’s workforce has trouble seeing themselves as part of that startup story.

The current generation of managers focuses on growing existing accounts or businesses. Double-digit sales growth and customer service awards are impressive. They also may mask eroding market share and lagging innovation. Risk-taking becomes a thing of the past. When the new leadership team assembles, it sees the recent expression of the corporate culture as hindering the need for change.

In with the old

Leaders willing to look under the hood are likely to find plenty of examples to support their culture change initiative. For example, a global health care client preparing for a leadership transition is making explicit cultural connections with its founding nearly a century ago: The company’s past is its future.

The company draws parallels between a recent string of overseas acquisitions and its founder’s entrepreneurial drive, which created the enterprise. Successful integration of the new businesses, a few of which actually started in their founders’ garages, is taking place in the context of celebrating and fostering the entrepreneurial risk-taking that made these startups a success. Headquarters hopes for some back-office operational economies of scale among the newcomers. That said, it is loath to subject local leadership to heavy-handed bureaucratic leadership from afar.

Cultural crossroads

Closer to home, the leadership team faces a different cultural challenge. The company is committed to its second-to-none service and first-class treatment of employees and customers. That is what the founder embraced as he built the business. Employee surveys report that it’s a pretty nice place to work. All good, as far as it goes.

In previous decades, leadership teams tended to bifurcate the corporate culture. The leadership group embraced the entrepreneurial drive of the founder, while managers and the rank-and-file employees focused on the “soft” side of the culture, such as how employees treat each other and clients. Market share and strong financials made this approach look very successful.

However, the leadership team recognizes today that disruptive competition, cost pressures and looming technological advances put the status quo at risk. They can’t maintain a great place to work if they are put out of business. Change has to happen. How can culture help?

Evolve or die

A global cultural task force did a deep dive into the heritage of the company’s principles, values and mission. They resurfaced and proposed a set of cultural behaviors that the company needed to embrace to succeed in the future.

Each of the behaviors links explicitly to existing cultural touchstones and values. But the future behavior hadn’t been explicitly stated as such in the past. They proposed a cultural evolution, not revolution.

These behaviors emphasize taking personal ownership and responsibility and have a strong bias for action—no excuses for complacency. Employees understand that their culture requires them to actively drive business success in all aspects of their work. Culture enables success enables culture.

Culture in transition

Culture is not an afterthought to this leadership transition. It is part of practically every thought: tapping the entrepreneurial spirt of old to align new businesses with the much bigger existing enterprise. It marks an evolution of the widely embraced corporate culture to emphasize a results-oriented path to success for employees. It all comes down to embracing culture as a key to shifting your leadership transition into overdrive.

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