Agility In Organizational Culture

An interview with Egbert Schram, Group CEO of Hofstede Insights, on how firms can adapt

Toward the end of 2019, Stanton Chase signed a global agreement with Hofstede Insights. A leader in organizational culture transformation that was founded more than 30 years ago, Hofstede Insights builds on the work of Professor Geert Hofstede and operationalizes his academic theory and research through advanced analytics and engineering combined with deep human insights, helping thousands of companies across the globe.

At the beginning of 2020, the impact of a functional organizational culture and agile leadership became more visible than ever, bringing crucial business topics into focus. Stanton Chase explored these through a survey for senior leaders that was then shared with the business community.

Alexandra Lekkou: More than half of the companies we surveyed declared that their strategic objectives changed during 2020. In your expert opinion, what are the imperatives for organizational culture management under such circumstances? How do you see organizational culture affecting the way businesses respond to a crisis?

Egbert Schram: Change is the only constant. As no organization has the resources to anticipate what might happen next, the only way to ensure its ability to respond quickly to whatever comes its way is to make this ability an inherent quality and standard ways of working. Some call it agility; I would call it adaptability, but what is important is that it means real practical interventions and new practices. 

Examples from organizations we have worked with include putting in place cross-functional business outlook teams who help keeping external awareness high and scenario planning – this ensures people keep their eyes and ears open. This is complemented with having rapid reaction forces ready who again draw from across business units to respond quickly to crises situations – and have been given a formal mandate to take over control when crises hit so no time is lost on internal turf wars.

A.L.: Organizational culture transformation is among the top five topics on senior leaders’ agendas. In your vast experience of change management programs, what should leadership teams watch out for?

E.S.: The No. 1 enabler is definitely active top-level involvement, owning culture like the strategic asset it is. This includes an educated team of change navigators/cultural ambassadors who understand where, how, and when culture is impacting the business strategy execution. Teams like this need to be able to spend about 25% of their time on ensuring cultural alignment with every strategic initiative. 

“The No. 1 enabler is definitely active top-level involvement, owning culture like the strategic asset it is.”

I would also highlight that although more and more surveys indicate a top-level interest, our experience is that sometimes top management delegate culture management to HR because “it is a people thing,” so no real executive ownership is shown. And as people tend to mirror the top, if the top doesn’t own it, neither will the rest of the organization.

For multicultural organizations, there is another critical factor: cross-cultural awareness. There is what we do and then there is how it makes us feel. For sustainability, these two elements need to be aligned, and that starts with top-level management understanding how national culture influences people’s emotions. 

An example of this is a statement like “People matter, results count.” Depending on the country where this statement is being used, its values system, and the practices on different cultural levels, you will get a very different set of emotional reactions, as shown in the graph. 

As no organization has the resources to anticipate what might happen next, the only way to ensure its ability to respond quickly to whatever comes its way is to make this ability an inherent quality and standard ways of working.

A.L.: When it comes to the actual implementation of an organizational culture transformation program, which factors have you found to be critical in ensuring success for your clients?

E.S.: I would share five key lessons learned from companies across countries and industries:

1. Create a dedicated change team, sponsored from right at the top.
2. Know the culture and find out what needs to change where.
3. Ensure continuous communication on the project progress and buy-in into its importance.
4. Ensure full buy-in at executive level by making management team members co-responsible for aligning culture and strategy.
5. A supportive culture is business critical to strategy execution, so it is a never-ending journey, and as such requires constant monitoring. If the environment changes, or when a strategy changes, cultural transformation is critical.

A.L.: You already mentioned agility, and in fact it came up in our survey as the key quality organizations intend to build for creating a sustainable future. But how should organizations go about it?

E.S: Always keep in mind that your organizational culture should be the culture that best supports your strategy. Taking that into account, having clarity on how flexible your organization actually is, and if it should be more or less so, is crucial. 

In our experience, many organizations want to be flexible, but not all organizations should be. To go even deeper, not all functions within organizations should be equally flexible. For example, should the accounting team be as flexible as the R&D department? Almost certainly not. The reality is that in most organizations there is some need for flexibility in certain functions. That is why many organizations have teams that are accustomed to pivoting quickly.

Especially for larger organizations, the level of flexibility should not be the same throughout the organization. Instead, the organization’s culture should be designed appropriately for the organization as a whole and for its separate functions.

A.L.: For most of the organizations we talk to (more than 90%, according to our survey), applying an organizational culture management methodology will be a new experience. What business results should they expect, based on your experience?

E.S.: Applying the Hofstede Insights methodology with our clients has supported them in achieving the specific outcomes they wanted, which range from reducing customer service email traffic by 30% to increasing profit by 29% within a year, or to installing drilling platforms within three months after having been at a standstill for six months. 

The critical success factor is to make culture measurable in the first place. To not be afraid to visualize differences, because only by visualizing differences can you understand what people have in common. And those commonalities are instrumental in building an identity to which people can relate. An identity which creates predictability and with that, psychological safety: safety to innovate, safety to fail, safety to grow.