Irrational Exuberance: Systems vs Culture.

How to Successfully Shift Company Culture

It’s not uncommon for employees to feel frustrated by their company culture, especially if they believe that urgency is essential to the company’s success. Many leaders believe that announcing a new culture is the best way to create change, but this simply doesn’t work. Real cultural change requires an alignment between systems and behavior. In this article, we’ll examine the common traps that leaders fall into when trying to change their company’s culture and explore how to avoid them.

Announcing Culture Doesn’t Work

One common trap that leaders fall into when trying to change company culture is announcing a new culture without changing the underlying systems. This approach simply won’t work because culture and systems are interconnected. To create real change, systems must be aligned with the desired culture.

For example, if a company wants to move with urgency but insists that all external facing work is reviewed by the founder, this will become a bottleneck as the company grows. Employees will lose a sense of urgency because they know that they’ll get stuck in the approval process regardless of how quickly they complete the work. A successful cultural shift towards urgency requires addressing the systematic bottleneck in productivity.

Misaligned Actions and Structures

Another common trap that leaders fall into when trying to change company culture is being earnestly trying to change culture, but their own actions and structure are getting in the way. This trap can be avoided by ensuring that systems and behavior are aligned.

For example, an executive team that collaborates well together, but is often misaligned on the latest strategy, can struggle to make progress. If the founder changes details of the strategy frequently and doesn’t communicate the changes consistently to the executive team, they’ll spend a significant amount of time stuck or reworking their approach. A successful cultural shift towards urgency requires either clearer communication about strategy changes or a more durable strategy to operate against.

Similarly, an executive team that is struggling to align on the budget can create a culture in which private decision making takes precedence over the budget. If one executive gets the CEO to approve an urgent hire outside of the budget, and the CEO agrees with the need, costs can spiral out of control. A successful cultural shift towards company-first decision making requires either a shift away from private decision making or accountability to the shared budget.

Conclusion

When trying to shift company culture, it’s essential to remember that culture and systems are tightly connected. Real change requires an alignment between systems and behavior. Announcing a new culture without changing the underlying systems simply won’t work. By avoiding these common traps, leaders can create a culture that supports urgency and success.