Changing an organization's culture — what people think and how they behave — requires clearly articulated beliefs and principles.
An organization's culture determines what employees consider appropriate behavior and how they interact with one another. It influences how individuals, working groups and the organization plan, execute and manage their work. In this way, it helps determine the speed and efficiency with which work is completed. Culture also helps determine how receptive or resistant an organization will be to change. As we see it, the right culture can equip an organization for success in times of growing volatility and accelerating disruption.
The difficulty of change
Having an appropriate culture is vital, but changing the organizational culture is challenging for numerous reasons:
- Culture includes both formal processes and informal, unwritten rules: Cultural change requires more than reconsidering official processes and procedures.
- Culture comprises both mindsets and behaviors: Changing culture is as much about changing what people think as it is about changing what they do.
- Culture is shared: Culture does not belong to just one group within the organization, such as leadership. Cultural change needs to involve everybody.
- Culture is self-reinforcing: Every time someone acts in a particular way, it sends out a visible and immediate signal to others in the organization.
EY has an approach for culture transformation and core values implementation that addresses the challenges and is centered on the alignment of the organization’s purpose, vision, core values and behavioral statements.
What is purpose?
Purpose is an aspirational reason for being that is grounded in humanity and that inspires and calls to action. Purpose-led transformation is a journey from purpose definition to purpose activation across the organization. EY’s purpose-led transformation approach is centered on aligning leadership and sharpening priorities, transforming at an agile business pace, mobilizing the full culture and unlocking strategic thinking and innovation. Defining the purpose is the first step in the culture transformation and must be translated into the organization’s vision and core values to be carried out effectively.
What is vision?
The organization’s vision is the underlying value of what an organization brings to its customers that provides meaning to its employees. It creates a sense of direction and guidance into the future and is designed to create enthusiasm, inspiration and commitment.
What are core values?
Core values are a set of statements that explain the organization’s beliefs about people, work and non-negotiable behaviors.
Core values can be considered the “moral compass” that guides employees on how they should perform their day-to-day activities thereby enabling the organization to move in the desired direction. Core values are important because they will fundamentally drive employees’ decisions.
As organizations respond to the competitive pressures in a disruptive market, the culture of the organization must align to support the revised strategy and its purpose.
Organizational core values help employees understand how they should treat one another at work and how they should treat customers and clients. They also help employees understand how the organization intends to achieve its vision and increase its effectiveness.
Reasons why an organization might decide to define or refine its core values
An organization might consider a core values refresh and implementation if:
- It is undertaking an overarching cultural transformation, such as a purpose-led transformation. Defining and implementing core values can help an organization make its purpose more influential in its day-to-day activities.
- It is considering M&A. Having an agreed set of values can reduce the risk that divergent cultures pose to potential synergies.
- It has found damaging or disruptive differences in behavior among divisions or geographies.
- A change of strategy is needed that requires a change to the prevailing culture and behaviors.
- It has a problem with low morale and performance issues. The organization may wish to implement core values as part of a general cultural change to address such problems.
Example of EY’s core values and supporting attributes
- People who demonstrate integrity, respect, teaming and inclusiveness
- People with energy, enthusiasm and the courage to lead
- People who build relationships based on doing the right thing