How to change your culture for a unique competitive advantage

How to change your culture for a unique competitive advantage


By Davina McArthur

Culture drives strategy. Organisations invest in organisational culture change initiatives because they recognise that culture is a unique form of competitive advantage. It is also a fundamental enabler of organisational performance.

Nous works closely with clients to understand how their current culture delivers their vision, mission and strategy and whether, and by how much, the culture needs to change to deliver on those. Does it need to be ‘built’, ‘evolved’ or ‘strengthened’ to support complete alignment and maximise performance? We then design a strategy around one of these approaches.

Changing culture is a challenge, but a holistic, integrated and robust approach will position your change for success

We use three guiding principles to design culture change strategies with our clients:

  1. Take a holistic approach that addresses the key levers of culture change.
  2. Integrate with whole-of-business activity, rather than a standalone exercise.
  3. Employ a robust approach to change engagement.

The first of these is the principal determinant of success and the one on which we will focus here. We have developed a change model focussed on a holistic approach and grounded in our experience.

Nous’ seven levers model ensures the approach is holistic

Our seven levers model builds upon academic thought and addresses the levers for change across all elements of an organisation’s operating model. Culture change must be embedded within every aspect of the model to really stick. It needs to cover both the ‘people’ and ‘technical’ parts of an organisation.

This model is useful for all types of cultural change, but is applied differently in each situation. For example, if an organisation adopts a ‘strengthen’ approach, their culture change strategy may need to action a few key things across a couple of the levers. Alternatively, if an organisation adopts a ‘build’ approach, their culture change strategy will need to action a number of things across all of the levers – focussing particularly on levers 1 and 2 – Leadership commitment and Values and behaviours.

The seven levers are:

  1. Leadership commitment: Leaders must have an absolute commitment to focus on culture change and model this commitment to ensure success. Where leaders drive and model the requisite culture, this emphasises to staff the importance of the commitment. Initiatives for this lever clarify the leaders’ role in the implementation of change and develop clear accountability mechanisms for effective implementation.
  2. Values and behaviours: The workforce must be clear about the culture – the values and behaviours expected of them – and hold themselves and others to account. While the purpose and espoused values of an organisation rarely change, behaviours are refined over time as the culture evolves. This lever often includes initiatives that engage the workforce to translate the values into complete and clear expectations of not only what, but how, work is executed. This may be through, for example, sessions with staff to explore what the values and behaviours really mean when lived every day and agree to the mechanisms or tools they will use to hold themselves to account.
  3. Workforce capabilities: The workforce, including leaders, must be equipped with the skills and qualities that enable cultural change and the valued behaviours to be lived every day. Initiatives for this lever can include targeted development of existing staff as well as for new recruits into the workforce.
  4. Recognition and consequences: The desired culture is reinforced when positive behaviours are frequently recognised and rewarded, and poor behaviours are consistently addressed. This lever includes initiatives across formal and informal reward frameworks to ensure that behaviours aligned with the desired culture are promoted and violating behaviours are quickly and clearly discouraged. For example, ensuring that behaviours are an assessed criteria for promotion will demonstrate that positive behaviour is viewed as mandatory, not a ‘nice to have’.
  5. Practices and procedures: Barriers are removed when practices and procedures are realigned to shift habitual behaviour. The determination of specific initiatives for this lever requires the organisation to review processes and systems to ensure they promote behaviour aligned with the desired culture. For example, if the culture shift includes the devolution of delegations, the organisation must assess all processes to ensure the requisite sign‑offs match the new delegation framework.
  6. Underpinning structures: Organisation structures, hierarchy, locations, physical layout and ICT investment enable the mission, values and behaviours. If these structures are misaligned they will act as barriers to the desired behavioural shift. For example, if the desired culture is one of cross-team collaboration and teams are physically separated on different floors or in different buildings, then the physical layout will work against integration.
  7. Monitor and evolve: An organisation must identify, measure and report on cultural change for early insight into the success of the culture change strategy. This allows for short‑term, iterative adjustment to the strategy as well as longer‑term review of whether the culture is being embedded. This lever serves to maintain both focus and accountability for the change process and ensure implementation across the other levers remain contextually relevant and on track.

The enduring characterisation of organisational culture as “the way we do things around here”[1] highlights the inextricable link between the technical and the people sides of an organisation. To try and affect one without deep consideration of the other is a fundamentally flawed approach. In fact, 70% of transformation efforts fail due to the inattention to the human side of transformation: this includes leadership, organisational culture and employee engagement with the business case for change.[2]

You can change culture to drive strategy and organisational performance. Through consideration of each of these levers and how they determine and reinforce the culture your organisation sets and perpetuates, you can design the most effective change interventions to shape an organisational culture that delivers competitive advantage.

[1] Bower (1966) The Will to Manage.

[2] Kotter (1996); Parry, Kirsch, Carrey and Shaw (2013); Gilled, McMillan and Gilley (2009); Jones, Jimmieson and Griffiths (2005); and Fedor, Caldwell and Herold (2006).