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Global Consulting Practice

White Paper

Building Resilient Organizations through


Cultural Transformation

About the Author

Shivam Sopori
Shivam Sopori is a Business Consultant within the Global Consulting Practice at
Tata Consultancy Services (TCS), and specializes in Organizational Change and
Transformation initiatives. He has over 10 years' experience in both strategic and
operational aspects of executing large-scale transformations, while working in a
fast-paced, dynamic environment. He completed his Bachelor of Engineering in
Computers from Pune University (Government College of Engineering, Pune) and
MBA in General Management from SP Jain, Mumbai.

Abstract

Organizations face the dilemma of preserving their core expertise while being nimble
enough to adapt to both external and internal stimuli. External factors may include
aggressive new market entrants, dynamic market forces, demanding customers, and rapid
liberalization of regulatory practices. Internal factors may span process inefficiencies and
employees who seek greater empowerment and decision-making power. Complacency and
living on past glory while clinging to established practices and rituals can stifle innovation
and intrapreneurship within the enterprise.
To thrive, and perhaps even merely survive, an organization needs to transform into an agile
enterprise. It needs engaged employees capable of embracing change.
Some organizations have cultures that are conducive to such transformation, while others
may need to mold their existing cultures to usher in transformative changes. Organizational
culture, when used as a source of energy and inspiration, can act as a powerful lever in
navigating periods of pernicious uncertainty in any transformation lifecycle and help build an
emotional connect across the workforce.
This paper presents a comprehensive framework for creating a culture of transformation in an
organization. It presents a matrix that shows different archetypes of organizational culture
and the transformation styles that may suit each best. Our model for cultural transformation
offers leaders a series of steps they can use as a basis for planning their change journeys.
Common pitfalls that can derail transformation are identified. A case in point looks at the
application of these constructs in the context of an Asian airline.

Contents

The Components of Organizational Culture

Why Is Culture Relevant to Transformation Effort?

The Culture Quadrant Typical Styles of Organizational Culture

An Approach and Framework for Cultural Change

Key Challenges and Pitfalls while Undergoing Transformation Programs

10

Case in Point Passenger Service System Transformation


for a Southeast Asian Airline

11

Conclusion

12

The Components of Organizational Culture


Organizational culture is often described by the phrase 'how we do things around here'. It is that ethereal
something which influences virtually every aspect of working life within the organization. It includes how people
communicate, the number of coffee breaks, the number of working hours, who fits in and who doesn't, how
products and services are delivered, and the critical success factors for projects. It determines the psychological
perception of the work environment. Thus, culture in the enterprise also represents the underlying values,
principles, and behaviors that have passed the test of time, are understood to be critical for future success, and
hence need to be preserved and passed on to new members.

Visible

Invisible

Individual/Group
norms

Organizational
Culture

Leadership style

Work environment

Customer centricity

Implicit assumptions

Shared values

Core beliefs

Figure 1: Components of Organizational Culture

Organizational culture is intertwined with the business strategy and management practices and has a significant
impact on the workforce. Figure 1 depicts its components which can be broadly classified as overt or 'visible', such
as individual or group norms, work environment, and customer centricity in processes; and covert or 'invisible', such
as implicit assumptions, shared values, and core beliefs that prevail under the radar. For instance, 'doing business
ethically', 'ensuring customer delight', and 'adhering to company policies' are not clearly visible but form an
important part of an organization's culture.

Why Is Culture Relevant to Transformation Effort?


It's a well-known fact that more than half of transformation programs across all organizations either fail to
accomplish their objectives or fizzle out after some initial gains.
In a bid to understand more about what happens with transformation programs, the Katzenbach Center at Booz &
Company surveyed more than 2,200 executives, managers, and employees. Some of the results from this survey
point to a clear correlation between the company's culture and the success of the transformation program: Eightysix percent of C-suite executives and 84 percent of all managers and employees say culture is critical to their
organizations' success, and 60 percent see it as a bigger success factor than either their strategy or their operating
model. However more than 50 percent think their organization's culture needs a major overhaul. Some of the
results from the survey are depicted in Figure 2.

84%

...agree that their organization's culture is


critical to business success

44%

...say culture change should take less


than one year

60%

...say culture is more important than


strategy or operation model

48%

... think, other than communications and


leadership alignment, they do not have the
capabilities to effectively deliver change

45%

...do not feel their culture is being


effectively managed

#1

... barrier respondents said prevents


sustainable change as there are too many
competing priorities, creating change fatigue

47%

...do not feel culture is an important part


of the leadership team's agenda

#1

... reason respondents resist change is they


are skeptical due to past failed change efforts

51%

...think their organization's culture is in


need of a major overhaul

#2

... reason respondents resist change is they


do not feel involved in the change process

Figure 2: The Importance of Organizational Culture

Though respondents overwhelmingly acknowledged culture as a key determining factor for transformation, the
survey goes on to highlight a major disconnect between accepting culture as a factor and actually using cultural
levers to ensure sustainable change. In fact, only 24 percent of survey respondents agreed that their companies
used the existing culture as a source of energy and influence during the change initiative.
The survey highlights a lacuna between the importance of culture and the priority it is afforded when an
organization is going through a transformation. There is a clear need to make better use of culture as an enabler or
make changes in the existing culture of an organization to support its transformation journey.

[1] Strategy& (formerly Booz & Company), Culture's role in enabling organizational change, November 2013, accessed on December 2, 2014,
http://www.strategyand.pwc.com/media/file/Strategyand_Cultures-Role-in-Enabling-Organizational-Change.pdf

The Culture Quadrant Typical Styles of


Organizational Culture
TCS has developed a Culture Quadrant, shown in Figure 3, which classifies organizations on the basis of their
existing cultural environment and rules of working. There are many parameters that define organizational culture:
leadership style; strategic direction; size and nature of the workforce; technology and innovation index; power, role,
task, or person culture; and so on. Of these, two have been chosen as the most important:

High

III. Federated

IV. Latticed or
Decentralized

Low

a. Organizational diversity (geographical and cross-cultural, size, nature of workforce)


b. Levels of hierarchy (power, relationships, style)

I. Uniform

II. Top Down

Geo - cultural
Diversity

Low

High
Levels of Hierarchy

Figure 3: Typical Culture Styles for Different Organization Types

Broadly, organizations can be categorized into four categories:


1. Low Diversity and Low Levels of Hierarchy
Organizations in the first quadrant are seen to have a uniform culture with an entrepreneurial streak. Owing to the
flat structure, employees have direct access to the upper echelons of management and people across the
organization share similar ethos, values, and principles. This structure supports faster decision-making with an
action-oriented and synchronized workplace, and employees working in a highly dynamic environment. A unified,
systemic transformation approach can be used, making full use of the existing systems.
2. Low Diversity and High Levels of Hierarchy
Organizations in the second quadrant usually have little diversity or spread and an almost uniform work culture
across their limited locations. This is accompanied by high levels of hierarchy and limited access to leadership. Such
organizations are typically full of silos with minimal cross-department interaction. Owing to their top-down nature,
a layered transformation approach can be applied. Alignment at the top leadership level, followed by middle
management buy-in will allow changes to trickle down across the workforce.
7

3. High Diversity and Low Levels of Hierarchy


Organizations in the third quadrant typically have minimal hierarchy and high diversity. Such organizations often
have an eclectic mix of workers combining different strengths to leverage synergies, while ensuring high scope for
individual creativity. These organizations have a loose federated structure in which multiple units are coordinated
by a centralized management team. Common principles and values are balanced with localized autonomy.
A personalized transformation approach centered on a common theme can be instrumental in ushering in the next
level of change in such setups. A clear personalized campaign is required for each audience group.
4. High Diversity and High Levels of Hierarchy
Large organizations may have multiple sub-cultures and different levels of hierarchy across diverse locations. This is
equivalent to multiple smaller organizations co-existing within the same enterprise, or a latticed decentralized
organizational culture.
No 'one-size-fits-all' solution can work for such a complex and massive organization. Tailored approaches are
needed to meet the unique demands and requirements of each sub-culture and its groups of stakeholders.

An Approach and Framework for Cultural Change


Successful transformation requires a clear connection between organizational culture and strategy. Cultural drivers
and levers, if used effectively, can act as powerful tools to inform, engage, empower, and elicit commitment from
those affected. They can drive a sustainable change journey and create a more collaborative work environment.
TCS' 5E Cultural Transformation Framework, depicted in Figure 4, provides a step-by-step approach for successful
cultural transformation in any organizational change program. The five phases in the 5E framework are
explained below.
Visualize the transformation
Map to the business plan and
strategic goals
Identify the role of leadership
Plan the cultural change and
involvement of others

n
n

n
n

n
n

Envision

n
n

Engage
n

Build momentum shortterm wins and success stories


Learn from failures and
external sources
Conduct continuous
assessment and evaluation

Emphasize

Transforming
Organizational
Culture
n

3
n

n
n
n
n

Identify new skills and


capability gaps
Integrate new capabilities
Train and reskill
Assign new roles
Share knowledge

Gain political support


Create a visual impact
Demonstrate leadership
commitment
Engage emotionally tell stories
Link to organization's core
purpose/corporate mission
Create change champions

Enable
4

n
n

Develop new business


policies and framework
Rejig the organizational
structure and infrastructure
Reinforce cultural messages
Create new roles

Empower

Figure 4: 5E Cultural Transformation Framework

1. Envision:
Having a clear idea of 'Why the change is needed?' and 'What will be the end outcome from this change?' right from
the outset is paramount. It is critical to visualize the transformation program in its entirety and map the endoutcomes to the strategic direction and goals of the organization. Without this step, the program runs the risk of
becoming just another 'also-ran' with no clear motivation for the executive support needed for success. A well
thought-out roadmap for cultural change, as part of a detailed plan for the core change team, will aid
transformation. Leadership alignment must be sought on the envisioned program objectives and roadmap.
2. Engage:
Political support from the leadership is crucial for the success of long-term sustainable change. Executive
sponsorship and sustained commitment to the change program help build employee morale and sustainable
change. Workshops with the top strategists and thought leaders of the organization should aim for 'a common case
for change'. Shared understanding of the program benefits and risks will clarify expectations and allay fears.
Visible and tacit support from the leadership team will be needed at critical junctures during the lifecycle of the
program. The leadership will need to demonstrate their support and drive adoption of the changed ways of working
to send a strong message to the workforce. Leaders and managers setting an example of why change is important
could act as a key trigger for employee buy-in.
Engaging employees by telling stories and linking the change to the organization's core purpose will help sow seeds
of change. Change champions must be created across organizational hierarchy and locations as an extension of the
core change team.
3. Enable:
It is important to codify the new business policies and framework, and operationalize the new rules in the form of
practices and procedures. The intent is to ensure order and uniformity of purpose throughout the organization as it
embarks on a cultural shift. This will help build confidence and avoid confusion in a period of major turbulence. The
organization's structure and infrastructure may need to be adjusted to support sustainability of the changed
practices.
The organization needs to reinforce cultural messages and new procedures continuously across a range of media,
and demonstrate benefits for each group by answering the question: 'What's in it for me?'
4. Empower:
In the transformed work environment, organizations need to identify new skills and capability gaps through a
complete skill assessment. Based on the assessment, organizations might need to assign employees to new roles
and plug the gaps to strengthen the new operating structure. These new capabilities can be integrated by training
employees to inculcate additional skills and sharing knowledge to help them accomplish tasks, work with systems,
or carry out procedures. Training will help clarify expectations and create consistency in behavior.

5. Emphasize:
In this last step, organizations can build momentum and foster commitment by identifying short-term wins and lowhanging fruit. Recording these and highlighting them as success stories can overcome areas of resistance within the
organization.
Finally, the change team needs to develop plans for the future and learn from past efforts, failures, and external
sources. It is also important to institutionalize what has already been achieved through continuous assessment and
evaluation, establishing rewards and recognition to keep the workforce engaged as they move into the next orbit.

Key Challenges and Pitfalls while Undergoing


Transformation Programs
n

A cookie-cutter approach to cultural change will not work: By the very nature of the impact a change program
has on a diverse cross-section of employees and the different sets of interests and priorities each one represents, a
one-size-fits-all solution will almost certainly fail. The greatest chance of success comes from emotionally
connecting with each group of employees, ensuring they are receiving the requisite support during the change
period, and they are all attuned to the direction the organization is headed in.
Pushing people to embrace change without giving them a choice will spell doom for the change program:
It is human nature to resist forced change, if not overtly then at the sub-conscious level, because of inertia. Town
halls, leadership messages, and training sessions can only do so much in piquing interest. Commitment to change
will materialize only if people choose it of their own accord. An elaborate plan for facilitating and engaging the
workforce should be created at an early stage.
Ineffective participation of middle managers will result in the change program losing steam: While the
leadership plays a key role in setting the right direction and provides sponsorship throughout the program, midlevel managers provide the critical mass essential to steer the change on the ground. Empowered managers can
tip the scale in favor of the changed ways and directly influence their team members. On the other hand, bad
publicity from managers will prematurely scuttle the change program and spawn resistance.
Incremental rewards and recognition affect employee morale: Keeping employees engaged throughout the
journey is an onerous task. Small actions of recognition and encouragement (both monetary and non-monetary)
at major milestones will go a long way towards enhancing employee morale and building a mood of positive
productivity in the organization.
Making change stick is difficult: Quite often, the management team may fall into the trap of declaring victory
too soon. In the absence of a solid plan for institutionalizing long-term change, it is easy for the workforce to
revert to the old ways of working. Codifying and linking change to SOPs and processes, with targeted metrics, will
ensure lasting change results.

10

Case in Point Passenger Service System


Transformation for a Southeast Asian Airline
An airline set up a transformation program to replace the 20-year-old custom-built Passenger Service System (PSS)
with the best-in-class community-based PSS. The airline wanted to incorporate industry best practices and business
processes and eliminate functional silos. The migration would impact a series of critical systems across multiple
departments and global branch offices that determined the airline's performance and service delivery. At a strategic
level, this migration would serve as a critical step in the airline's plan to join the SkyTeam alliance and expand its
international network in terms of services and offerings.
The program demanded a shift towards a global mindset and customer-centricity across all layers of the airline,
including a renewed thrust on the use of English as a medium of communication instead of the local language. The
Self-Reinforcing Cultural Alignment wheel shown in Figure 5 summarizes the key aspects of the cultural
transformation. These eight steps helped create a virtuous cycle of positive change in the quest to shift the
workforce towards the desired set of behaviors.

ze
gi
te
e
ra
St and ang
ch

an

pl

3. Ensure visible
leadership
support

7. Showcase
quick wins

2.

ch 8. F
a e
in mp licit
ce io at
ch nt ns e
an iviz an
ge e d

1. Build the case


for change

Cultural Shift

6.
E
em nab
po le a
we nd
r

ild al
Bu ion t
.
4 ot ec
n
em on
c

5. Focus on
communication

Figure 4: Cultural Alignment Wheel

11

The case for change: The program started with Executive Alignment and Visioning Workshops focused on 'value
discovery', and the team of consultants tried to understand the reason for the PSS migration. This produced a
compelling case for change, including the vision and envisaged future benefits, alignment with other strategic
programs, and an understanding of the consequences of not embarking on this journey. The leadership team was
convinced that the new PSS was critical for managing future growth and expansion.
Planning: A roadmap and action plan was created that detailed all phases of the program. Key stakeholders and
influencers across all departments were identified at an early stage. Change history and learning were thoroughly
analyzed for lessons that could be applied to the program.
Leadership support: Discussions were held with key stakeholders and heads of relevant departments, including
Network; Revenue Management; Strategic Alliances; Departure Control; Maintenance, Repair, and Overhaul; and
Reservation and Ticketing. This ensured engagement and co-operation right from the outset, while identifying
potential champions and intransigents across the airline. The transformation program kicked off with an event
where a very visible and concerted effort to build urgency and showcase leadership support was made. The airline's
top leadership and industry partners presented a clear vision: 'Change is the only way forward.'
Workforce engagement: Slogans, videos, road shows, town halls, change workshops, communication with
leadership, idea sharing, and crowdsourcing, using a mix of local culture and the program vision, created an
emotional connection with the workforce. The thrust was on building a groundswell in support of the transition and
getting people to own the program. Ineffective practices were discouraged, and the workforce was exhorted to
communicate in English across all levels.
Employee empowerment, celebration of quick wins, and incentivization of change: Impacted employees were
trained and re-skilled through a comprehensive training program across regions and departments in preparation of
the go-live phase. Employees were always kept aware of what was in store and what the next steps were.
Celebrations of interim successes at major milestones kept the momentum going; success stories and live
testimonials were highlighted.
Ensuring that the people remained in sync with the airline's future strategy and vision, through effective
engagement across all phases of the program, ensured success of the program.

Conclusion
The prevailing culture within an organization is critical to transformation. But cultures vary from organization to
organization and include many factors: leadership styles, the hierarchies and sub-hierarchies that exist within the
structure, the diversity and adaptability of the workforce, and the strategic direction. This paper demonstrates that
cultural shifts can be made by following a systematic approach. It suggests a clear-cut framework for change based
on the organization's diversity and levels of hierarchy.
Organizational culture is deeply ingrained, and such a wide-sweeping change is likely to meet with opposition. But
creating 'change champions' within the organization can help overcome resistance. It's also important to make the
change stick: establishing a well-planned system of rewards and recognition, and incorporating change metrics into
performance measurement can make the difference between a failed initiative and a successful transformation.
12

About TCS' Global Consulting Practice


TCS' Global Consulting Practice (GCP) is a key component in how TCS delivers additional value to
clients. Using our collective industry insight, technology expertise, and consulting know-how, we
partner with enterprises worldwide to deliver integrated end-to-end IT enabled business
transformation services.
By tapping our worldwide pool of resources onsite, offshore, and near-shore our high caliber
consultants leverage solution accelerators and practice capabilities, balanced with our knowledge
of local market demands, to enable enterprises to effectively meet their business goals.
GCP spearheads TCS' consulting capacity with consultants located in North America, UK, Europe,
Asia Pacific, India, Ibero-America, and Australia.

Contact
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http://www.tcs.com/offerings/consulting/Pages/default.aspx
Email: global.consulting@tcs.com

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