The role management plays in organisational change

There is a collective agreement that what leadership does and how leaders act determines a great deal of what happens within an organisation. What they say, how they say it, and the actions that leadership take mark the expectations of employees and customers alike.

When shaping the culture of the organisation, this might be even more true than on other fronts. If, for instance, the employees are advised to follow the guidelines and stick to the processes but the management team is known for doing the opposite, is it really a surprise that this contradictory behaviour trickles down and spreads across the organisation?

When organisations are looking to implement cultural transformations, change starts with the leadership walking the talk. In this article we will dive deeper into why that is and what it looks like in practice.

Organisational Culture

We use organisational practices to define Organisational Culture. Organisational practices are measurable and can be compared over time to ensure that the company is moving in a way that best suits its strategy. These practices can be anything from unwritten rituals at the water cooler or simple norms for meetings to the complex processes such as those used for recruitment, or manufacturing products. Once the optimal Organisational Culture has been defined, these practices can be connected with organisational strategy to create the Best Culture for the organisation.

However, the existing practices might not always be the best, most efficient, or most practical ways to carry out specific tasks. With years of experience working on Organisational Culture transformation, it is not uncommon to see that over relatively short periods of time, practices can be modified to better support your strategy when change is perceived as a positive thing within an organisation. In addition, organisational transformation can be relatively easy to carry out as long as the people involved understand why the changes are being implemented.

Why Leadership Behaviour Matters

Leadership practices can be both positive and detrimental to the overall success of the organisation. Employees will naturally look to their leaders for the best behaviours to model. When leaders walk the talk and align their actions with the strategic vision of the organisation, they will explicitly and implicitly encourage their employees to do the same. 

However, if the leadership team fails to lead by example in supporting an optimal Organisational Culture, it will ultimately undermine the organisation's overall goals.

One great way to address this is connecting the organisational practices with the broader strategy. When leaders demonstrate that their actions align with the strategy, others will follow their lead.  

For example, if an organisation is looking to implement a more easy-going culture and wants to implement a less formal dress code, the management team should be the first group to take action. If they continue to wear full suits, it might discourage the rest of the workers from following the new dress code. However, if the CEO actively encourages the management team to try and dress more casually on a regular basis, it will show everyone that the dress code is actually changing on all levels. This trickle down of employee behaviours can greatly impact the overall Organisational Culture.

Why Change Happens from the Top

While you might see grass roots change occasionally, most lasting change comes from the positions of leadership where change can be aligned with the overall vision of the organisation. This is because the leadership team is the one that sets the organisational strategy and decides upon the Optimal Culture. 

Leadership also has the ability to see the gaps between where the organisation is and where it wants to be. They are able to see an overall vision of the organisation and hone in on those focus areas which have the most strategic impact. Change starting at the top is key for long-lasting transformation because it shows leadership dedication and communicates the importance of the actions they are talking about. 

For example, at the manufacturing or service level, it can be quite difficult to perceive a need for a change to more innovative practices because people are working on the daily tasks of that job. People tend to continue carrying out tasks the same way for comfort reasons, without necessarily seeing a need for change, and are often too busy to think outside the box. However, from the leadership perspective, it is possible to see a larger, overall picture of the situation. In the case that the organisation wants to become more innovative, it makes sense that management identifies this need and begins to implement direct or indirect forms of change, which we dive into more below. 

If you are interested in how to foster a culture of innovation in a large organisation, read more here.

The ability to create change is also dependent on the National Culture of where an organisation is located or headquartered. In countries where there is high Power Distance, for example, change almost always has to come from the top because the leadership team is seen as the only place with the legitimate authority to lead organisational transformation.

How to Carry Out Change

Not only does leadership behaviour play a big role in how Organisational Culture is formed, it also is essential when it comes to change. 

At The Culture Factor Group (Previously known as Hofstede Insights), we often talk about two types of organisational transformation.

Indirect Change:

This sort of change occurs when modifications are made to current practices. For example, if a team wants to limit the amount of informal communication they receive, they can create a “closed door policy”, impacting the number of requests that come to their door. However, if leadership wants to create a more open atmosphere, they can indirectly change the perception of openness by encouraging an “open door policy”.

Sometimes the changes can be small and quite simple. These changes will require working closely with management to ensure that the company is moving in the direction of the organisational strategy. 

For example, one transformation solution is teams or squads dedicated to Organisational Culture that can support management in planning, initiating and carrying out changes. Such “Culture Squads” work together with leadership teams to design solutions that benefit the organisation and then work to carry them out.

Direct Change:

However, to ensure direct change in an organisational culture transformation project, leadership plays a more active role. In this scenario we look at how well what leadership does fits with the organisational strategy. To measure this fit, we use Cultural Executive Ownership Programme. 

This tool measures how well a leader aligns with the Optimal Culture of the organisation according to their colleagues, subordinates and themselves. It shows where the Optimal and Actual Cultures are most unaligned and areas that need more focus. Understanding cultural alignment helps organisations connect how their leadership fits the end goals of the organisation and where change needs to take place. 

Once points of improvement have been identified, it is possible for leadership to take direct action to support cultural transformation towards organisational strategy. 

Related to what we shared earlier, a major benefit of direct change is that management often plays a key role in the day to day practices within the organisation. Any change that is made to how they work will also be reflected in the organisation as a whole. This can make organisational transformation rather quick and seamless, especially when it is aligned with the organisational strategy.

For example, results of this tool could be an indication that the leadership team might want to keep their doors open or closed, or that management needs to give their subordinates more specific instructions. These recommendations can then be tailored to the working reality of an organisation and create targeted impact and the leadership teams can know that the changes they make will have a direct impact on the organisational culture as a whole.

If you're ready to explore how The Culture Factor Group can support your management team or help drive your company's transformation, reach out!

Editor's Note: This post was originally published in May 2022, and last updated in September 2024.