HR’s Strategic Role in Organizational Culture Change
Culture change in the workplace is unavoidable and is typically a continuous change. The frequency of emerging technologies, as well as fluid economic conditions, employee expectations, government regulations, and social influences, means businesses must consistently reassess their priorities.
HR professionals need to stay on top of organizational culture change to help their companies remain competitive. This article will explore how.
Why HR is facing an increasing need for organizational culture change
HR’s role in organizational change
Challenges HR faces in organizational culture change
How HR can drive successful organizational culture change
What is organizational culture change?
Culture change, also referred to as cultural transformation, happens when an organization embarks on a process to align the culture to its updated vision, and core values to help the business achieve its new objectives. As mentioned, culture change does not happen once, but rather occurs continuously.
Culture change can also happen unintentionally through VUCA – or Volatility, Uncertainty, Complexity, and Ambiguity of the current environment.
HR faces an increasing need for organizational culture change
Organizations have always had their own distinct culture that evolves naturally over time. However, the events of recent years have prompted a need for adaptation at an unprecedented pace. A global pandemic, tight labor market, and remote/hybrid work models compelled businesses to respond swiftly to ongoing change.
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Few organizations escaped the need for renovation. Most learned that the old methods and rules no longer applied to their new normal. Some companies that struggled to implement the needed adjustments faced an organizational crisis.
Staying relevant in business requires frequent transformations. Leadership must guide how the organizational culture acclimates to help it thrive during turbulent times. This requires new, purposeful ways of addressing the employer-employee relationship. HR needs to consider how employees’ expectations and mindsets have progressed to keep people engaged and connected to the organization.
HR’s role in organizational culture change
The Human Resources function is truly unique from the rest of the organization. Senior leadership’s priority is setting and achieving goals. Other employee teams are focused on how to get the job done and also how they feel about it. HR is the fulcrum between the two groups that advocates for both the company’s goals and employees’ needs. It’s HR that should be determining how to change culture in the workplace and steering the process so that businesses can better navigate present and future conditions.
Global management consulting firm McKinsey spoke with 350 HR leaders about looming uncertainty when the 2020 pandemic hit. They indicated their desire to focus on fortifying their organization’s capacity to spur positive change in key areas, with culture being one of them.
According to Gallup analytics, the highest-performing organizations have HR departments that are actively involved in stewarding the desired culture. They do this by taking on the following three roles:
- Champion – Define what needs to be changed and promote awareness for initiatives and activities that will reshape culture.
- Coach – Put solutions in place that inspire the behaviors needed to support company goals.
- Consultant – Interpret data to advise leadership about culture change outcomes.
As you embrace these roles and look for ways to update and reform how your organization operates, you’ll also need to factor in what you may be up against.
Challenges of organizational culture change
Organizational culture change is a complex mission. Culture is entrenched in every facet of the business and inherent in the shared beliefs, attitudes, and assumptions that have been shaped over time.
Transforming the prevailing culture requires more than just developing new goals, processes, or policies. It involves changing mindsets. This, along with other internal factors, means there will be obstacles and resistance to a culture change in the workplace.
Let’s look into 4 of the main challenges HR can face when executing an organizational culture transformation:
Challenge #1: HR is overburdened to efficiently drive the change
Human Resources encompasses a vast array of responsibilities. Some HR teams are overburdened with operational tasks and aren’t adequately staffed to tackle everything categorized under the HR umbrella. There may not be anyone available who feels equipped to take a critical role in ensuring the success of culture change. However, strategic HR matters when it comes to staying competitive.
HR leaders who can make the shift to a strategic role will ensure their efforts add value and become more essential in helping the company thrive. They understand and can demonstrate to other leaders how their people initiatives are linked to business results.
Challenge #2: Employee buy-in for the change
Top-down mandates rarely achieve culture change, so there has to be employee buy-in. However, employees will have reservations if they don’t see the point or have any incentive to change. Since people naturally become comfortable with their outlook and habits, they tend to resist the discomfort or effort it takes to change their perceptions and ways of doing things.
You can confront this by drawing on psychology to motivate employees. It starts with promoting the change as a positive event. Research conducted by psychologist and behaviorist B.F. Skinner showed that reinforcement, not punishment, inspires long-lasting change. There must be enjoyment, admiration, and reward throughout the process.
There should also be a purpose for employees to believe in. Social psychologist Leon Festinger observed that people feel distressed when their beliefs are not in line with their actions. Applying this to organizational change would propose that when employees have trust in a new initiative, they willingly change their behavior to support it. You can accomplish this by thoroughly explaining why the initiative is worthwhile and how crucial their contribution is.
Challenge #3: Lack of reinforcement with the organizational culture change
Implementing change is difficult, but maintaining it is even harder. If organizational culture is not consistently emphasized throughout the company, it won’t prevail.
Employees are less likely to embrace new values when they aren’t underscored by the company’s objectives and KPIs. For example, if you require employees to join forces across teams but evaluate their performance on an individual basis, there is no motivation for them to collaborate.
HR needs to ensure that the right reinforcements are in place to fortify the culture change. These include operational processes, reporting structures, measurements, and financial and non-financial incentives.
Challenge #4: The company culture does not reflect leadership styles or employee skills
A new organizational culture initiative will not be successful if leadership methods and employee skills aren’t updated to support it.
If leadership continues to lead the same way they always have, there is no foundation to innovate the culture. For instance, let’s say a new company culture embraces a flattened hierarchy that encourages employees to work more agilely across departments. However, leadership excludes itself and continues to promote a more hierarchical structure. This won’t set the right tone and sends a mixed message to employees.
HR should equip managers and leadership to be role models for the behavior changes so that employees will emulate the conduct necessary to embrace the new culture. Additionally, HR needs to help ensure that high-value talent is identified or developed and then allocated properly to key roles.
How HR can drive successful organizational culture change
Facilitating workplace culture change is an extensive endeavor that certainly has its challenges, but it can be achieved with the right strategies in place. HR is central in making this happen.
Here are 5 ways HR can guide effective and meaningful culture change:
1. Become a strategic partner in developing the new culture
HR must have a seat at the decision-making table. If HR’s role is only to champion culture change by communicating the new strategy, aligning policies, etc., crucial factors will be overlooked.
HR should be a strategic partner that contributes to developing the new culture by balancing leadership’s mission with the reality of employees’ needs and capabilities. After all, a winning culture won’t materialize without actively engaged employees.
Being able to analyze and present relevant data is one of the best ways for HR to take a more strategic approach to change management. Instead of operating from hunches, popular trends, or just repeating what’s always been done, you can articulate outcomes and offer valid ideas based on evidence. HR can analyze the current type of organizational culture and outline the process to deliver on the desired type
If you are looking for further insights into how to identify the need for transformation of your organizational guide, AIHR has developed a free step-by-step guide to assist you.
2. Bring purpose and values to life
HR is in the best position to communicate the new purpose and values to employees and help shift their paradigms. Be sure that the reasons for change are clearly conveyed and discernable, so everyone feels like they’re part of making a difference in something important.
You can build a strategy for identifying ways the desired culture should be or is already being displayed throughout the company. Then you can turn these into the standards that all levels of employees should model and aspire to.
Here are a few real-world examples of how 3 companies live up to their values in making business decisions:
- ClearCompany: Talent management software provider ClearCompany rewards employees who demonstrate its values by naming them “employee of the month” or featuring them in the company newsletter or on its website.
- Scania: A commercial vehicle manufacturer that has a commitment to sustainable operations. They hold a “Climate Day” where they pause work for one hour to hold training on climate change and gather input from employees.
- Starbucks: Believes that if employees are treated well, they will deal with customers in the same way. One of its cultural values is to make staff feel like they’re a priority. They are referred to as “partners” instead of employees, and even part-time workers are offered educational opportunities, health insurance, and stock options.
3. Align policies and processes with the culture change
You can’t implement a new culture while still acting under policies and processes from the previous one. Key practices must align with the desired behaviors to build credibility and give employees an accurate perception of what you’re trying to bring about.
It’s helpful to assemble a team of leaders from different departments to help you assess policies and processes and search out areas that may undermine the updated cultural expectations. These could include core values, mission, vision statements, hiring processes, L&D, talent management, etc. Then you can update them to align with the culture transformation and new business goals.
For example, a new CEO envisions a high-context communication culture. HR would need to oversee the transfer from traditional performance reviews to feedback sessions with more regularity, such as weekly one-on-ones.
HR should also embed the purpose and values into all processes that it’s involved in across the organization. Recruitment, onboarding, compensation and benefits, succession planning, etc. can all incorporate ways to convey and encourage the ideal culture. In recruitment, for instance, you can tailor job postings and interview questions to expand the desired qualifications to include culture-based attributes, such as an entrepreneurial mindset or collaborative spirit.
4. Help employees learn the skills required
Adopting a new type of behavior is difficult for employees who are not prepared with suitable competencies. HR needs to consider where the skills gaps are and assist employees with training and leaders with coaching to develop the abilities needed to progress the culture.
This is another area where you can apply psychology to HR endeavors. David Kolb, an adult learning specialist, discovered that adults need time to assimilate to new behaviors. Kolb’s “four-phase adult-learning cycle” assumes that people learn best from experiencing something directly in stages with an emphasis on their preferred learning styles.
Kolb defines the styles as follows:
- Diverging (feeling and watching)
- Assimilating (thinking and watching)
- Converging (thinking and doing)
- Accommodating (feeling and doing)
Furthermore, organizational psychologist Chris Argyris devised the “double-loop learning” theory. It proposes that mindsets are changed by examining objectives and questioning the assumptions about them. Then people integrate new information better by sharing with others how they can embrace it within their own circumstances.
With these concepts in mind, the methods for the learning you offer could consist of:
- Coach managers to provide personal feedback to employees and guide then in understanding the new behaviors.
- Setting up social learning opportunities, such as coaching and mentoring programs, which offers employees the opportunity to assimilate.
- Provide opportunities for employees to define and actively engage in the new set of behaviors and norms.
5. Use metrics to measure your workplace culture
Measuring your efforts by quantifying your culture change efforts is crucial. There are intangible elements of corporate culture, but what can be measured should be.
You’ll need metrics and data-driven insights to see where the new culture is prevailing and what needs to be improved. Having pre-determined KPIs based on the business goals will allow you to calculate the new culture’s impact on certain outcomes and the bottom line. Some tools you can use to measure culture include:
- Organizational Culture Assessment Instrument (OCAI)
- Organizational Culture Inventory
- Glassdoor ratings
You can also conduct a culture-specific survey to learn what employees are observing and adopting. Your regular engagement survey should also reflect whether employees are resonating with the new culture.
For further insights into measuring culture change, AIHR has created an in-depth article outlining 8 methods you can use for your business.
The more relevant and clearly displayed your organizational culture is, the better employees will live it out and support your business goals. Being an HR professional who takes the lead in organizational culture change means you can facilitate a smoother process and ensure it’s carried out effectively. On top of that, you’ll be asserting your influence to secure a strategic role in the company.