The world is going through a lot right now. We are living in a time of overlapping crises – difficult economic times, ecological crises ranging from climate change to species extinction and geopolitical tensions. All of this is accompanied by rapid technological developments that are simply overwhelming us in their speed – consider the topic of artificial intelligence, which on the one hand still seems to be in its infancy and on the other is already leading to massive changes in almost all areas of life.
All of this is triggering massive pressure for change in companies.
The question is no longer whether you have to change, but rather how often, how quickly and how profoundly.
The time of slow adjustments is over. Today, it’s all about being faster, more agile and more flexible on the one hand, while on the other, the content of change is becoming more and more complex – in a world where it feels like the rules of the game change every few hours.
This brings us directly to culture, because there is no getting around it when it comes to change. However, it plays a completely different role depending on the type of change. And this is precisely the crux of the matter: many transformations fail not because of the strategy, but because the culture doesn’t play along. Or, more specifically: That too little thought has been given to what culture actually means in each case. Because not every change is a cultural change, but every far-reaching transformation necessarily has a cultural dimension. But which one?
Different types of change – and different roles of culture
Not all change is the same. In systemic thinking, a distinction is made between first-order and second-order change. And even with the latter, it is now advisable to recognise the different depths of change.
And depending on the depth of the change, the role that culture plays in it changes massively. From the mere context to a potential obstacle to the core object of the change.
1st order change: optimisation within the existing logic
We define first-order change as improving things within the existing logic. More efficient reporting, new software, a leaner process. You know what I mean. And culture? Yes, that’s there too, of course.
However, it does not have to be actively addressed in such cases, but is merely the context in which the change takes place. Nevertheless, cultural patterns can also be used to establish changes more quickly and sustainably, for example by thinking about the way feedback is typically handled or which forms of recognition are highly valued. The culture does not have to be changed here, but rather understood and skilfully used.
What does this mean for executives?
- Use culture as an ally: What existing values and routines will help embed this change?
- Expect different perceptions: Groups in an organisation often evaluate innovations very differently – and this is normal, legitimate from their perspective and usually makes sense.
- Shape communication consciously: Get your message across in a way that reinforces the cultural patterns that are helpful.
Pattern change – culture as a stubborn opponent
When the solutions based on the previous logic are no longer sufficient, when not only processes or structures but also long-established behavioural patterns have to be changed, we talk about second-order change. And then things get exciting. Because this is where culture shows its insistent, conservative side.
Patterns describe shared behaviours and similarities in how things are seen, explained and evaluated within a group, which have been practised over a long period of time. Patterns arise because behaviour that proves to be helpful is repeated again and again and ultimately becomes a matter of normality. These are unwritten rules that everyone adheres to, but which hardly anyone can specifically name or describe. Similar to the grammar of our mother tongue: who can explain the rules for separable verbs exactly? But we use these rules all the time. And we hardly ever think about them unless someone breaks them. That would prove that they don’t really belong – see? It’s exactly the same with culture.
So patterns normally emerge because they make sense. But when the world around us changes, patterns can become dysfunctional.
And suddenly, for example, the long-established pattern of not criticising each other too harshly, which has previously ensured such pleasant cooperation and harmony, prevents people from giving each other sufficiently open feedback or learning from mistakes.
When patterns need to be changed, culture often becomes a stubborn obstacle and makes change difficult. We all know that.
An example: An organisation wants to move away from a culture of control and towards more autonomous working. In this case, it is not enough to write a new process description. You have to actively question habits and established patterns of interaction. You have to create a setting in which trust makes just as much sense for management as taking responsibility for employees. And this is where the real work begins, because changes of this kind not only need clear messages, but also spaces for experience in which new things can be tried out and new patterns can be practised.
What does this mean for executives?
- Expect resistance and be happy about it! When patterns are changed, resistance is to be expected. Although people want change, they prefer not to change themselves. Resistance is therefore even a positive signal that something is actually shifting. However, the associated emotions must also be considered and addressed. Leadership must deal with people’s fears, anger and sadness – and with its own emotions.
- Make patterns visible: Even identifying patterns often makes a big difference: How have we made decisions in the past? How do we deal with mistakes? How do our important meetings run? And what of this is not described in any policies or processes? You have to look beyond the behaviour and focus on the invisible. Just like in football, when you no longer observe the moves of individual players, but the team’s interaction.
- Establish new routines: You cannot simply instruct people to behave differently. But you can create contexts in which new behaviour makes sense. For example, if you want to establish less competition and more cooperation, you could switch from incentive systems that primarily reward individual performance to new systems that make mutual support and cooperation more attractive.
- Lead the way! If you want to establish new behaviour, you have to live it yourself. And not just once, but consistently over time. Leadership must always make itself the object of change.
Profound transformation: Questioning basic assumptions – culture as a central object
The most profound type of change concerns not just behaviours or patterns, but the deepest convictions, beliefs and values.
Far-reaching transformation becomes necessary when the organisation’s perception of itself in its environment is no longer resilient, previous business models no longer work or the fundamental goals of the organisation are no longer perceived as meaningful.
Then it’s about questions of identity: What do we stand for as an organisation? What drives us? And: What assumptions about people, markets and the economy are our actions actually based on?
An example: A company that for decades has pursued a strategy primarily aimed at maximising profits wants to transform itself towards genuine sustainability and social responsibility. This doesn’t just mean new processes or perhaps new products, but a completely new way of looking at itself and the environment. And that is difficult. Because it goes to the core of your own identity and core values.
When changes are so profound, and this is increasingly necessary in times of such major upheaval, the corporate culture itself must become a central focus of the work. We have to take a closer look at the glasses through which we see the world. And perhaps develop new lenses for them.
What does this mean for executives?
- Create spaces for reflection: Transformation does not begin with measures, but with new perspectives. Time is needed for in-depth discussions about the basic assumptions of one’s own behaviour.
- Question your beliefs: People understand their reality through narratives. If fundamental assumptions are to change, then new stories need to be told. To do this, beliefs need to be consciously questioned and sometimes thrown overboard.
- Be patient: Cultural change is not a sprint. If you are serious about change, you need time, consistency and, above all, credibility and trust. And a fortune of trust can only be saved up in small coins.
Systemic perspective: What does this mean for cultural change?
All of this sounds extremely complex. And it is. In order to deal with complexity well, it often helps to have a good theoretical foundation. And when it comes to dealing with complexity, experience has shown that a systemic perspective is particularly helpful. Let’s therefore place the three central theoretical pillars of systemic thinking on top of the question of the role of culture in change: Constructivism, cybernetics and the theory of social systems.
1. Constructivism:
From a constructivist perspective, there is no objective reality – only what we collectively construct as ‘reality’ in our heads. But it’s not just every person who constructs reality – groups do it too. Together. Every organisation or department has its own logic, its own way of describing, explaining and evaluating things. Which sometimes looks pretty weird when viewed from the outside. All intercultural surprises thrive on this. On the inside, however, constructing reality together is extremely practical in everyday life because it is much easier to understand each other. At the same time, however, a jointly constructed world view can also appear very stable – and therefore entrenched.
For first-order change, this means considering the perspectives of different groups and taking them seriously. Even those of the critics. This does not mean giving in, but recognising the perspectives as legitimate and still setting clear guidelines. That is the task of leadership.
If patterns or beliefs need to be set in motion, this means that you cannot simply ‘reprogramme’ an existing culture. Change begins with people becoming aware of how they see their world. Managers and organisational developers should listen carefully to what stories are being told in the organisation – then, for example, new stories can be used to slowly introduce new perspectives into people’s minds and thus give them some direction as they continue to develop.
In the case of far-reaching transformations which affect the identity of the organisation, the way in which reality is constructed must itself be examined. It is a matter of very consciously questioning basic assumptions and beliefs and setting them in motion. This way, step by step, new shared constructions of reality emerge, which give rise to a new identity.
2. Cybernetics:
From a cybernetic perspective, culture is not a rigid thing, but a dynamic, self-regulating system. In social interactions, cause and effect cannot be clearly distinguished, actors refer to each other in self-referential loops, the question of how something started is replaced by the question of how conditions reproduce themselves. Sounds complicated, and it is. But in essence, it means that we do something through which we want to trigger something and the system does what it wants with it. And that’s not always what we had in mind. We ourselves often don’t know what we’re going to do next. Sometimes a small impulse is enough and suddenly a lot happens – sometimes nothing happens at all.
In the case of pure optimisation, the reactions are usually reasonably predictable. Management has the task of communicating the change well. As a rule, this is all the more successful the better you know the perspectives of the groups involved, which is where asking questions and listening helps.
More far-reaching changes, on the other hand, do not require a quick ‘big solution’, but rather targeted experiments, i.e. work in iterative loops. For example, managers can consciously change their own behaviour – for example in decision-making processes or in dealing with mistakes – and then see what this does to the system. And then the next loop. This can be quite frustrating for people with a strong need for planning certainty.
In the case of particularly fundamental changes, these mechanisms of action, in which the system constantly keeps itself in balance, must also be analysed and questioned. Is this how we want to react to each other? Is this helpful for what we want to be?
3. Social systems theory:
Systems theory views groups as living, social systems. Their boundaries are not always clear, but are drawn by observers.
As soon as a group sees itself as a group, i.e. in systemic terms: makes a distinction between itself and the rest of the world, common cultural patterns emerge. This means that culture always becomes a demarcation. Shared patterns define who belongs – and who doesn’t. Think of young people starting at a new secondary school. As soon as a group forms, this group develops patterns, i.e. shared norms about what you can and can’t wear, whether drinking alcohol in large quantities is cool or rather embarrassing, which teachers you like and which you don’t, and so on. And so they draw a boundary around themselves and say: We are a group.
For companies, this means that culture is not just a set of implicit rules, but also a mechanism for setting boundaries. Anyone who is part of the organisation learns its cultural rules – and those who want to stay stick to them. This is usually unconscious and happens automatically. The same applies, of course, to subcultures such as departments, divisions or generations.
As long as changes remain within the existing logic, the boundaries generally remain untouched. However, they can be used to strengthen common identity and cohesion. Leadership must focus on the ‘we’ during change.
When patterns are set in motion, however, the subcultures of individual groups within the company often react, feeling that their identity and boundaries have been violated. Strong and emotional counter-reactions are normal here. Management is then well advised to offer the big picture as a focus for drawing meaningful boundaries and at the same time to consciously address the identities of subgroups such as departments, teams and generations and bring them into dialogue.
If the transformation goes so deep that basic assumptions are questioned, this also affects the identity and self-image of the company. And consequently also the boundaries that define the system itself. This means that cooperation partners, suppliers and other groups that were previously considered part of the organisation’s environment can suddenly be considered part of the system.
Questions about how to differentiate between ‘us’ and ‘the others’ are coming into focus. And it is all about the conscious creation of rituals and practices that consciously define and reinforce these boundaries.
Conclusion: Make culture your friend!
The crucial question is not whether culture plays a role, but which one. Those who understand this can steer change in a targeted manner – and prevent it from failing due to resistance. The trick is not to ‘change’ culture per se, but to utilise its potential for change and to know when deeper levels of culture need to be reflected upon and addressed with targeted interventions. Smart organisations build a framework in which this can be discussed without apportioning blame, i.e. they reflect on their patterns.
It is not the people who have to change, but their view on things. Because culture is constantly changing anyway. The question is whether we consciously help to shape it or consciously utilise its current nature to achieve our goals.
