How to change culture to move ahead

Culture is like the wind. It is invisible, yet its effect can be seen and felt. When it is blowing in your direction, it makes for smooth sailing, but everything is more problematic when it is blowing against you.

For organisations seeking to become more adaptive and innovative, culture change is often the most challenging transformation. Innovation demands new behaviours from leaders and employees. These are often antithetical to corporate cultures, which are historically focused on operational excellence and efficiency.

If you have a top-down mandate, change can’t be achieved. It lives in the collective hearts and habits of people and their shared perception of “how things are done around here.” 

Somebody with authority can demand compliance, but they can’t dictate optimism, trust, conviction, or creativity.

One leader who understands this well is G.V. Prasad, CEO of Dr. Reddy’s, a 33-year-old global pharmaceutical company headquartered in India that produces affordable generic medication. With the company’s more than seven distinct business units operating in 27 countries and more than 20,000 employees, decision making had grown more convoluted, and branches of the organisation had become misaligned. Over the years, Dr. Reddy’s had built in lots of procedures, and for many good reasons. But those procedures had also slowed the company down.

Prasad sought to evolve Dr Reddy’s culture to be nimble, innovative, and patient-centred. He knew it required a journey to align and galvanise all employees. His leadership team began with a search for purpose. Over the course of several months, Dr. Reddy’s team worked to learn about the needs of everyone, from shop floor workers to scientists, external partners and investors. Together they defined and distilled the company’s purpose, paring it down to four simple words that centred on the patient: “Good health can’t wait.”

Then, instead of plastering this new slogan on motivational posters and repeating it in all-hands meetings, the leadership team began by quietly using it to start guiding their own decisions. The goal was to demonstrate this idea in action, not talk about it. Projects were selected across channels to highlight agility, innovation, and customer-centricity. Product packaging was redesigned to be more user-friendly and increase adherence. For example, the role of sales representatives in Russia was recast to act as knowledge hubs for physicians since better physicians lead to healthier patients. A comprehensive internal data platform was developed to help Dr Reddy’s employees be proactive with their customer requests and solve any problems in an agile way.

At this point, it was time to more broadly share the stated purpose — first internally with all employees and then externally with the world. At the internal launch event, Dr Reddy’s employees learned about their purpose and were invited to be part of realising it. Everyone was asked to make a personal promise about how they, in their current role, would contribute to “good health can’t wait.” The following day Dr Reddy’s unveiled a new brand identity and website that publicly stated its purpose. Soon after, the company established two new “innovation studios” in Hyderabad and Mumbai to offer additional structural support to creativity within the company.

Prasad saw a change in the company culture right away:

“After we introduced the idea of “good health can’t wait,” one of the scientists told me he developed a product in 15 days and broke every rule there was in the company. He was proudly stating that! Normally, just getting the raw materials would take him months, not to mention the rest of the process for making the medication. But he was acting on that urgency. And now he’s taking this lesson of being lean and applying it to all our procedures.”

What Does a Movement Look Like and its effect upon culture?

To draw parallels between the journey of Dr Reddy’s and a movement, we need to understand trends better.

We often think of movements as starting with a call to action. But movement research suggests that they start with emotion. There needs to be a diffuse dissatisfaction with the status quo and a broad sense that society’s current institutions and power structures will not address the problem. This brewing discontent then turns into a movement when a voice arises. This voice provides a positive vision and a path forward that’s within the power of the crowd.

Bad crowd, folks that resent change? They need time to adjust to change.

What’s more, social movements typically start small. They begin with a group of passionate enthusiasts who deliver a few modest wins. While these wins are small, they’re powerful in demonstrating efficacy to nonparticipants, and they help the movement gain steam. The movement really gathers force and scale once this group successfully co-opts existing networks and influencers. You need agreement! 

Eventually, leaders leverage their momentum and influence in successful movements to institutionalise the change in society’s formal power structures and rules.

The Challenge to Leadership

Unlike a movement maker, an enterprise leader is often in a position of authority. They can mandate changes to the organisation — and at times, they should. However, when it comes to culture change, they should do so sparingly. It’s accessible to overuse one’s authority in the hopes of accelerating transformation.

It’s also easy for an enterprise leader to shy away from organisational friction. Harmony is generally a preferred state, after all. And the success of an executive transition is often judged by its seamlessness.

In a movements-based approach to change, a moderate amount of friction is positive. 

A complete absence of friction probably means that little is changing. Look for the places where the movement faces resistance and experiences friction. They often indicate where the dominant organisational design and culture may need to evolve. This is where we need to start to identify the pain points.

And remember that culture change only happens when people take action. Start there. While articulating a mission and changing company structures are essential, it’s often a more successful approach to tackle those sorts of issues after you’ve been able to show people the change you want to see.

Taken from Changing Company Culture Requires a Movement, Not a Mandate (hbr.org)