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Managing Change Blog

Culture's Role in Corporate Transformation

Culture's Role in Corporate Transformation

Four moves can renew a company's corporate culture.

  • min read


Culture's Role in Corporate Transformation

Company culture can be a powerful competitive weapon. Approached the right way, it can be the wind in your sails, propelling your business forward with speed, strength and purpose. If the wind is blowing against you, however, it becomes a lot harder to get where you want to go.

Like the wind, a company’s culture can feel hard to define, and harder still to influence or shape. Yet increasingly executives and boards are trying to do just that, betting that an entrepreneurial, innovative and agile culture can be a critical competitive advantage in today’s business environment of increasingly rapid change and digital disruption. The right culture will not only attract and retain great talent, but it can actually make the difference in what and how quickly a company brings compelling goods and services to market.

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Recently I had a conversation with an executive facing this very challenge. It didn’t take long for our talk to turn to the field of behavioral science—after all, corporate culture is essentially the aggregation of many individuals’ behavior.

As we talked, an approach to shaping his firm’s culture began to crystallize for him. The discussion focused on four moves that at first glance can seem counterintuitive:

  • Moving from values to behaviors. “We act like owners.” “We are entrepreneurial”… “collaborative”… “solution-oriented”… “innovative.” This is the well-articulated language the executive used to describe his company’s culture. All good things, but as we pushed a little deeper, he acknowledged that simply stating these corporate values won’t change behavior. They are too broad and too general. Behavioral science teaches that people can change only two or three behaviors at a time, and that the desired behavior must be specific. After some discussion, this executive zeroed in on two things he would do differently: first, listen more in update meetings, and second, praise out-of-the box thinking, even when it fails. These two behaviors are likely to do more to create an accepting environment for new ideas than any neatly worded statement of corporate values ever could.
  • Moving from communication to engagement. As we started to discuss how to communicate his goals for the culture, it became clear that most of the tools this executive used were one-way megaphones. Things like executive speeches, CEO videos, newsletters. All good—in fact, necessary—but far from sufficient, as he quickly understood. To foster a broad feeling of ownership, he decided to open up two-way communication. Instead of just giving speeches, he knew he needed to make time for reflection, questions and discussion. In addition to newsletters, the company could start to encourage ongoing conversation with tools like chat boxes. This approach is much more likely to unleash the discretionary energy of employees.
  • Moving from HR to the line. In human psychology, proximity trumps hierarchy. How likely someone is to adopt any change is most influenced by the cues of their direct supervisors and teammates. Of course, human resources and communications specialists play an important role in any cultural overhaul, but it made sense to this executive that it is his operating line, not HR, that needs to own any attempt at cultural transformation. It won’t work if it’s delegated to others, so how would his line model and drive change?
  • Moving from top-down to bottom-up. The need to tie concrete business objectives to cultural change took up a good part of our conversation. In the airline business, for example, when an executive team wants to cultivate a culture of pragmatic problem solving instead of staying at the high level of “winning share in commuter routes,” it’s better to work on specific problems. Start with, “how do we solve our average 60-minute delays on the Frankfurt-London route on Thursday evenings?” and then scale that solution up to other times and routes. We call this a micro-battles approach: specific, time-boxed, winnable objectives that are run by cross-functional, fully dedicated, agile teams. This can release enormous energy in the organization, lending legitimacy by showing that this is not culture for culture’s sake, but is also generating tangible business outcomes. It avoids bureaucratic approaches disconnected from the day-to-day realities of running a competitive business. These become microcosms of the company you want to be, with the culture you want to have.

By the end of our conversation, this executive could see how a few moves could begin to release enormous energy in his organization. Over time, those new behaviors would expand through the company, a fresh breeze, renewing its corporate culture.

David Michels leads Bain & Company’s Results Delivery® practice in Europe, the Middle East and Africa.


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