Values-based Leadership Transforms Organizational Culture

Exchange espoused values for deeper belief

When you need to lead your organization through a change initiative – whether it is organizational change to remain competitive, integrate new rules and regulations, improve productivity, etc. – it is almost inevitable that you will need to transform your organizational culture, too. New behaviors require new ways of thinking.

What is organizational culture?

Organizational culture is evidenced by the way that people within the organization act. This depends upon how they think – the values and beliefs that they hold to be true. Often, organizational culture evolves over time. It is not something that is identified and developed proactively or intentionally. It is entrenched in the soul of an organization, defined by decades of organizational evolution.

Why does organizational culture matter?

Because of its very nature, organizational culture is difficult to change. In a 2018 blog, McKinsey likened organizational culture to an iceberg. The part of the iceberg that you can see is the behaviors – the what is done and how it is done. Beneath the surface (90% of the iceberg’s mass) is the why – the cultural element. McKinsey’s research shows that 70% of organizational transformations fail, and 70% of those failures are due to organizational culture issues. The piece of the iceberg that can’t be seen.

What part does organizational culture play in transformational failures?

Organizational culture is the foundation on which decision making stands. It is the rock on which the existence of the company depends. Only when values and beliefs are held to be genuine will people come on board with new ideas, processes and procedures.

If your leaders and managers do not believe in the new values of your organization, they will communicate without influence. As Edgar Schein established in his work, leaders will act in accordance with what they think they believe. These espoused values and beliefs create a false organizational culture. One that is unsustainable.

Transformational change must be values-led with authenticity

To drive change, leaders must communicate the new organizational culture and the values on which it rests with authenticity. They must walk the talk. They must measure successes and failures based upon the new values, and not on statistical milestones.

If a leader does not believe in these new values, the inauthenticity will become evident. It is basic underlying assumptions (what you truly believe) that drives your behavior. Thus, to change organizational culture, you must influence these basic underlying assumptions.

How does an organization align espoused values and beliefs with basic underlying assumptions?

Few organizations fully understand their organizational culture. Once an organization strives to learn about itself in depth, and commits to describing its culture in writing, its values and beliefs take on a new meaning. An organization often finds a disconnect between its espoused beliefs and its basic underlying assumptions.

Having identified this disconnect, the organization can strategize to ensure alignment between its real values and what it says it values. This effort needs to occur from the top down, guiding leaders and managers to the behaviors expected by the realigned values.

The new basic underlying assumptions become the guiding light for new model behaviors. New values and beliefs are communicated with authenticity, and fan out as they spread down through the organization’s hierarchy.

Values-based performance is recognized and rewarded as the organization adjusts its behavior. New thinking, new values and new cultures bring new ways of doing things. Values-based leadership plays an integral role in the process of transformation. It ensures that people are aware of the new values, and these values are aligned with the organization’s vision and mission.

This is same page thinking and acting that helps people understand and engage in transformational change, with a new purpose and motivation founded on the organization’s genuine basic underlying assumptions and not espoused values and beliefs.

Contact us today, and discover how we could help your leaders and managers lead more effectively and authentically through periods of change.