Culture eats strategy for breakfast – ‘even more with digital transformation’

16 June 2022 6 min. read

It’s a pattern Rogier Offerhaus, the founder of People Change, is all too familiar with: organisations spend big on new strategic digital transformation projects but neglect the cultural side of the transformation. His phone rings, and he’s speaking with yet another disgruntled CEO who feels much of his digital transformation investment has not lived up. “Ultimately, success boils down to one thing: successfully changing the people and their culture.”

Everyone knows the saying that happy employees make productive employees. Despite this belief being burned into the mind of every executive, however, when transforming their businesses, they tend to underestimate (or even neglect) its importance.

In the context of change, adopting new ways of working is not always enjoyable for employees – it can see them ‘lose’ operational freedom to more rigid ways of working, or land them with extra responsibilities they are not used to.

At the same time, specialists who have perfected their way of working with a legacy system, over many years of loyal service, inevitably miss the previous ways of working. And then, of course, there are some who will feel that management are not “setting the right example,” either in terms of leading change properly, or in terms of communicating what the actual end-goals are.

After more than two decades in business, Rogier Offerhaus has seen all this and more. The founder of People Change, a consulting firm dedicated to leadership and cultural change, is an expert in making sure that the strategic objectives of any change are aligned with the leadership and culture agenda.

“With over 70% of digital transformation programs failing [IMD Business University), working on a happy and committed culture is a real triple win: for the company, those involved in the change, and the employees themselves. Open any best practice model on digital transformation and change is right up there as a success factor. Everyone knows it, but few measure and manage it continuously,” said Offerhaus.

One of the key reasons for this is that many leaders overestimate the change readiness of their people – so while they assume their “clear business case and goals” will cascade down to the work floor, this simply doesn’t happen. In part, this is due to a disconnect between the new digital transformation strategy and the existing organisation processes and culture.

“Leaders aren’t on the work floor every day,” Offerhaus explained. “So they don’t have enough insight into what is really playing at the grassroots level. What do people think of current processes? Are the current digital tools really that bad?

And by the time they design and roll out a digital transformation plan, and stuff hits the fan – “it is often too late” warned Offerhaus.

Measuring change & culture readiness

Repairing a digital transformation program is notoriously difficult. Unlike processes and systems, there are no quick fixes for people. Having encountered this time and time again throughout his career, some years ago, Offerhaus set out to come up with a new methodology to measure cultural and change readiness.

“The key lies in measuring cultural readiness ahead of change, and then using that information to design the change properly and orchestrate transformation in a way that meets the change demands of people.” Enter the People Change Scan, “a unique model that helps make the normally elusive aspects of an organisation change & culture tangible.”

Through an online tool, employees answer a range of questions on the organisation, company culture, views to change and more. There are also a number of personal questions – “which always remain private – from everyone, including the management.”

The depth and privacy of the scan enables People Change to identify four key factors. The current culture within a team; the extent to which employees feel at home within that culture; the culture within which they would prefer to work; and the change preferences for the transformation from the current culture to the desired culture.

This final point is arguably most important, and one which sets the People Change Scan apart from other tools in the market. “The scan not only gives insight into the existing culture, how healthy the current culture for everybody is but offers a picture of a desired culture, and a possible change path to getting there.”

Explaining how these conclusions are reached, Offerhaus said, “Crucial to all the questions is that we don't look at the answers in isolation, but rather at the relationships between the answers. Are there discrepancies? Does a person's mindset fit the culture? Can an employee deliver what is asked? One answer or discrepancy does not say much, of course, but when combined, all the indicators paint a revealing picture.”

Reaching a next level healthy culture

Simply receiving the results of the scan is far from an end to the matter though: it merely outlines the starting point and an indication of the desired end point for change. What is important then is that a discussion ensues how to get to the future.

That path ahead is often easier said than done, however, as building a next level healthy culture is inherently much more complex than simply rolling out a new software system. In this case, the People Change Scan offers two valuable insights into the challenge ahead. 

This includes a model that describes a collective development of consciousness, including the cultural development of a team, department or organisation, and can be seen as climbing a staircase step by step. Secondly, on an individual basis, the scan gives an assessment of which employees are best placed to take the lead in the journey towards the desired culture.

Importantly, in the case of cultural change in an organisation – identifying employees sympathetic to the shift can be key in getting the rest on board. “We only work with employees whose mindset is closely aligned with the desired culture, who want to change and who enjoy the trust of their colleagues,” Offerhaus added.

“Together, they form the first coalition for change, which can be seen as the seed of the new culture. They function as ambassadors of the new culture, so that it gets the chance to nestle within the rest of the organisation.”

With this ‘coalition’ in place, change can take place team by team, department by department – “and really that is the only way forward, as ultimately culture remains something that has to develop organically.” This process kickstarts change – meaning firms need not be “at the mercy of the culture that is currently in place.”

Offerhaus concluded, “With the insights of our scan we quickly could explain to the CEO which steps he needs to make to engage his people in the right way and motivate them to become partners in the change. Leaders and employees build their next level culture together, it should be a joint effort.”

“We keep supporting and coaching leaders and teams with the insights of newer editions of the People Change Scan [the scan is typically conducted every six months during change].”