Building Organizational Culture that achieves Business Objectives — My learnings of leading product and data science organizations
Long time ago, when I was at IIT, I used to read a lot of business write-ups in my free time. Once I read a line in a business journal,
“Culture eats strategy for breakfast”
often attributed to Peter Ducker though there is no confirmed source linking this exact version to him. Nevertheless, I found this line pretty ludicrous, irrelevant, and meaningless. Of course, now I know better.
In fact, for a very long time, I thought ‘Company culture’ is often hyped by those who sell business books or management training to stay in business. Until I actually landed in a company, details of which I will not mention for obvious reasons, that struggled to ship anything meaningful. Everyday team members blamed each other over actually doing anything meaningful, senior leadership kept busy managing upwards, as highlighted by Brian Chesky in his recently famous speech, and founders felt frustrated.
Operating in the environment, I wondered, what differentiated Nvidia, Qualcomm, Apple or other companies that witness Hockey stick growth and that I was lucky to be a part of from some other companies who struggled to go past any meaningful traction and seemed stuck. What leads to this ceiling that many companies get limited by? Is it an absence of a strong product, is it lack of good branding, is it a subpar technology team or something else. The earlier version of me would have thought that it must be absence of a real product that the market wanted at a price that made sense but the more time I spent studying these companies the more I realized they had a decent product with strong value proposition, there was a market, there was sufficient strategy on paper, but Quarter after Quarter, these companies and leadership struggled at shipping anything meaningful, yet tech team kept busy building stuff, and the R&D budget kept creeping up.
I spent months studying some of these companies and the more I observed, the more it occurred to me how
“Bad culture subdues great strategy every single time”.
In a similar such organization, when I started leading the product team, I realized my role as a product leader changed from
“Building the right product” to “Leading the organization through digital transformation” to “Leading the organization through a cultural transformation”.
I realized without actually building the right culture in the organization, leadership would see very little value delivery if at all. This is why I say
“As a leader — Build culture first, Mechanism second, and Strategy later.”
My learning was “a strong culture will eventually lead to a strong product” or as is said by James clear “We do not rise to level of our goals, we fall to the level of our habits”. If I were to rephrase it, I would say
An organization does not rise to the level of its strategy, it falls to the level of its culture.
In this article, I will share some lessons that I learnt through my experience of leading the organization through the cultural transformation. I will also share some key frameworks that you can use to lead your own organization through a similar transformation.
Some key questions that we will answer are:
“What is an organization culture?”,
“How to build the right cultural values in the organization?”,
“How to lead an organization through a cultural transformation”
Finally, I will tell you what happened to the organization once I moved out. It fell back to the level of its previous culture so why did I fail to make the cultural transformation the fabric of the organization? Well there is ample of learning in that failure too. So let us get started.
1. What is an organization culture
Organizational culture, often described as the “soul” of a company, is the collection of values, beliefs, and behaviors that shape how a company’s employees make decisions (Strategy), interact (Communication), and perform their work (Execution).
Later we will see what ties Strategy, Communication, and Execution together is Mechanisms and the power of Mechanisms.
Some of the key elements of organizational culture include:
1.1. Core values: The principles that guide decision-making and behavior within the organization.
During my MBA at UC Berkeley, Haas School of Business, I came across an absolutely brilliant write-up on performance management in organizations. The article was
‘On the folly of rewarding A, while hoping for B’ — Kerr Steven.
The author discusses how leaders in organizations stress on seeing a particular behavior B but constantly reward behavior A and then feel surprised why behavior B is not exhibited by employees. A prime example of that is all leaders or organizations want to see ‘collaboration’ among their team members. They highlight how what they do everyday is a team sport and that they win together and they lose together. The hope here is to be able to see teamwork among employees. However, most of these organizations when it comes to Promotion cycle, rarely asks give examples when you helped someone else in the organization succeed. Instead they ask write your personal accomplishments. If you are rewarding individual performances then expecting collaboration will only lead to despair. No wonder most of these organizations end up having a lot of talented non-collaborative players in the team.
So what is like a team of all stars and yet end up on losing side? There is no better example of this than the Real Madrid Football team of 2003-2004. They had 7 world stars players on their side — Zidane, Ronaldo, Raul, Figo, Casillas, Roberto Carlos and David Beckham. Any football lover from 2000s will tell you what this star studded line-up meant.
Yet their record in 2003-2005 was abysmal to say the least. While there were many reasons for the failure, a huge contributing factor was while they were exceptional individuals, they lacked cohesion as a team. Managing a team with so many big egos and strong personalities would be a nightmare for any manager and it indeed did turn out to be for new managers, who came at the backdrop of the transfer of iconic manager Vicente del Bosque. This goes to show that having a superstar team alone does not guarantee success. We will discuss this more when we get to our 9-Box Framework.
This is why, I strongly suggest leaders to start thinking about the core values that the organization stands for.
1.1.1. Why Core Values Matter
1.1.1. Guidance for Decision-Making: Core values provide a framework for making tough decisions. When choices need to be made quickly or under pressure, aligning decisions with organizational values ensures consistency and integrity. Have you heard the term ‘Decision by committee’ — This is usual in organization filled with individual of big egos, no leadership, and lack of clear ownership.
Good cultured organizations, on the other hand, have clear ownership and understand the importance of ‘Debate Openly but Disagree and Commit’ — a powerful idea that allows intellectual debate and yet keeps a clear accountability and ownership. Apple, for example, follows the concept of DRI — Direct Responsible Individual.
1.1.1.2. Cultural Foundation: Values shape the organization’s culture by setting expectations for behavior and interactions. A well-defined culture fosters employee satisfaction and retention, and helps attract talent that aligns with the company’s mission.
1.1.1.3. Alignment and Focus: Clearly defined values keep everyone in the organization aligned with its overarching goals. This is especially important as the organization scales, preventing mission drift.
1.1.4. Customer and Market Perception: Core values also play a role in how customers and the market perceive a brand. Organizations with strong, positive values are more likely to build trust and loyalty with customers.
1.2. Best Practices for Defining Core Values
Copy pasting Values from other organization will not help as the values should guide your company given the stage that it is in and the direction that you want it to go and aligned with your true belief system. When it comes to setting core values, do:
1.1.2.1. Involve Leadership and Employees: While leadership often drives the process of establishing core values, it’s critical to involve employees across all levels. This ensures the values resonate with everyone and are representative of the company as a whole.
1.1.2.2. Keep it Authentic: Core values must be authentic and reflect the actual culture of the organization. Avoid aspirational values that sound good but are not followed in practice.
1.1.2.3. Make them Actionable: Values should guide daily actions, so they must be specific enough to provide practical guidance. Broad, vague terms like “integrity” or “excellence” need to be clarified with examples of how those values manifest in day-to-day operations.
1.1.2.4. Limit the Number: Too many values dilute their impact. Typically, organizations focus on 3 to 5 core values that encapsulate their most important beliefs. I find Amazon’s principles a tad too many and confusing, but they do an exemplary job at communicating and reinforcing them through the organization.
1.2.5. Communicate and Reinforce Regularly: Values need to be more than words on a poster. Regularly communicate them to employees, customers, and stakeholders through meetings, employee onboarding, training, and leadership actions.
1.1.3. Examples of Core Values from Leading Organizations
1.1.3.1. Amex:
- We Do What’s Right: Customers choose us because they trust our brand and people. We earn that trust by ensuring everything we do is reliable, consistent, and with the highest level of integrity.
- We Make It Great: We deliver an unparalleled standard of excellence in everything we do, staying focused on the biggest opportunities to be meaningful to our customers. From our innovative products to our world-class customer service, our customers expect the best — and our teams are proud to deliver it.
1.1.3.2. Zappos:
- Deliver WOW through service: Zappos prides itself on offering exceptional customer service, focusing on customer experience as a key differentiator.
- Create fun and a little weirdness: Encourages a unique company culture where creativity and individuality are embraced.
1.1.3.3. Patagonia:
- Build the best product: Patagonia emphasizes quality and sustainability in every product it makes.
- Use business to protect nature: Reflecting their mission to combat environmental challenges through their business model and activism.
1.1.3.4. Netflix:
- Encourage independent decision-making by employees: Netflix empowers employees to make decisions with minimal red tape.
- Freedom and responsibility: Netflix maintains a flexible, high-performance culture but expects employees to manage their own time responsibly.
1.1.4. How to Build Core Values for Your Organization
Often when I join an organization, I follow some of these steps to build organizational values.
1.1.4.1. Assess Your Current Culture: Conduct surveys or interviews with employees to gather insights into the existing culture. Understand what behaviors are valued, how decisions are made, and what the company already stands for.
1.1.4.2. Identify Key Stakeholders: Involve key leaders and long-term employees in workshops to brainstorm and discuss the core principles that should define the organization. It’s important to strike a balance between leadership vision and employee experience.
1.1.4.3. Determine Key Drivers of Your Business: Identify the main drivers of your company’s success. For example, if innovation or customer service is essential to your business model, these should be central to your core values.
1.1.4.4. Keep Values Grounded in Reality: Ensure the values you define can be consistently upheld. If a core value is “commitment to innovation,” for instance, you need to invest in fostering a culture where new ideas are welcomed, and employees have the resources to innovate.
1.1.4.5. Align with the Mission and Vision: Core values should naturally flow from your organization’s mission and vision. They form the bridge between your long-term aspirations and daily operations.
But just having the values are not enough. You would need to socialize these values to make it a fabric of the organization lest these will just remain on the walls of your company as another poster. In fact, this exactly was the case with one of the startups, we will call it Company A. They had beautiful posters of company values, they called them Operating Principles — one of them was ‘Don’t Be a Know-It-All…Be a Learn-It-All!’, plastered on the company walls in cafeteria, yet no one in the company knew what those values were and needless to say employees never exhibited those values. So how did they fail? They failed to communicate, exhibit, reward the values they wanted to see. We will talk more about this in the next section.
1.2. Norms and behaviors: The informal rules that govern how employees interact with one another. This should be closely tied to organizations’ guiding principles and core values.
“The culture of any organization is shaped by the worst behavior the leadership is willing to tolerate” — Steve Gruenert and Todd Whitaker.
This is a very powerful idea, yet time and again, I have seen leadership at organizations putting up with bad behavior from a handful of team members. Why does this happen? There are several contributing factors that allow toxic behaviors to persist, despite the obvious negative impact they have on morale, productivity, and overall organizational health:
1.2.a. Lack of technical know-how: Leaders without a deep understanding of their product or industry may be hesitant to confront employees with specialized skills. I was advising an organization. It was a small organization and CEO/Founder tolerated toxic behavior from a key technical leader because they were perceived as indispensable. This individual held unique knowledge about the company’s systems, and the CEO, lacking technical expertise, was afraid that losing this person would create disruption or delays. This is a common trap: when leadership feels insecure about their ability to understand or replace a critical team member, they become willing to overlook poor behavior to maintain operational continuity.
The problem is that in the long run, this person’s toxic behavior leads to more harm than good. High-performing team members are likely to leave, collaboration is stifled, and a culture of entitlement begins to emerge, where expertise is valued over teamwork and values.
1.2.b. Multiple single point of failures in organization: Organizations with single points of failure often find themselves in a vulnerable position. These are individuals or processes on which the entire operation relies, meaning that if they fail or leave, critical functions of the business could be severely impacted. In such environments, leaders tend to overlook problematic behavior because the perceived risk of losing these individuals is too high. This is especially common in startups or small companies where one person may have built or designed key systems.
Instead of addressing bad behavior, leadership may rationalize it with thoughts like, “Yes, they’re difficult, but we can’t afford to lose them.” Unfortunately, this approach builds dependency on individuals rather than on strong processes, leading to even greater vulnerability over time. The better approach is to mitigate single points of failure by ensuring knowledge is shared, roles are cross-trained, and no one person holds too much operational power.
1.2.c. Lack of codified cultural values: In organizations without clearly defined and codified values, it’s difficult for leadership to enforce positive behaviors or hold people accountable for negative ones. Without a strong cultural framework, employees don’t know what behaviors are expected of them, and bad behavior often goes unchecked. Leaders, too, may not feel confident in reprimanding a toxic team member because there’s no formal standard to point to.
In these environments, the loudest voices or the Toxic & highest performers are often able to define the culture themselves, leading to inconsistency and unfair treatment across the organization. Employees who align with these dominant voices thrive, while others feel marginalized or demotivated.
To prevent this, it’s essential to have a clear set of core values that is communicated across the organization. These values should not just exist on paper but be reflected in every decision, from hiring to performance reviews. This allows leadership to confidently uphold the culture and address behaviors that don’t align with the company’s values.
1.2.d. Lack of a mechanism to embed values in the organization: Even when cultural values exist, they often fail to take root if there isn’t a mechanism to embed them into the organization’s processes. As I mentioned earlier with Company A, they had beautiful posters of values plastered on the walls, but the behaviors they hoped to see were rarely exhibited because those values weren’t reinforced. There was no mechanism to ensure that the values were reflected in hiring, performance management, or daily operations.
To successfully embed values, organizations need to go beyond lip service and ensure that these principles influence every aspect of the company. This could involve:
1.2.e. Bad leaders set bad culture: It’s often said that culture starts at the top, and this couldn’t be more true. Bad leadership can set the tone for an unhealthy culture. If leaders exhibit or tolerate toxic behaviors like micromanagement, favoritism, or poor communication, those behaviors will inevitably trickle down through the ranks. Leadership that lacks integrity or fails to uphold the organization’s values creates an environment where those values are seen as optional or irrelevant.
Bad leaders may not only fail to address toxic behaviors but may actually encourage them, either intentionally or unintentionally. For example, a leader who rewards aggressive, cutthroat behavior because it delivers short-term results may unintentionally foster a toxic, competitive environment where collaboration and trust suffer. Additionally, bad leaders may surround themselves with people who mirror their own worst traits, reinforcing negative cultural patterns.
Leaders have to realize that their behavior directly impacts the culture of the organization. If leaders prioritize transparency, collaboration, and accountability, those values will be reflected across the company. Conversely, if they prioritize power, secrecy, or personal gain, the culture will reflect that too.
1.3. Communication patterns: The degree to which information is shared openly and transparently. Most bad cultured organization feared transparency. Leadership thrived on hiding information under the veil of secrecy. But what makes secrecy at Apple such a powerful force while when other companies try to emulate, they fail at it. It is because they want to copy the body without understanding the soul.
1.4. Work environment: The physical and emotional atmosphere in which employees operate. Most great cultured organization are very good at pulling brightest minds together and build greatness through collaboration while others stay stuck in an environment where Rumor triumphs Truth, Opinion trumps Data, and Blame is the name of the game .
Quick Tips on how to identify a culture in an organization
Now that we discussed the importance of cultural values in an organization, if an individual ends up landing in an organization, here is how are some quick identifiers to help distinguish whether an organization is cultivating a toxic culture that stifles growth or a thriving environment that drives business success.
Bad cultured organization emphasizes hierarchical decision-making, where approval from the highest authority is always needed. Great cultured organization empowers employees at all levels to make decisions autonomously.
In bad cultured organizations, failure is punished, creating a risk-averse environment. Great cultured organizations treat failure as a learning opportunity, fostering innovation and experimentation.
Bad cultured organizations often have vague accountability, with responsibility pushed around. Great cultured organizations have clear ownership and celebrate those who take accountability for outcomes, good or bad.
Bad cultured organizations foster blame cultures, where mistakes are hidden to avoid repercussions. Great cultured organizations encourage transparency and constructive feedback, allowing teams to learn from their missteps openly.
Bad cultured organizations have leaders who micromanage and hover over day-to-day tasks. Great cultured organizations trust their teams and practice servant leadership, where leaders remove obstacles rather than control.
In bad cultured organizations, communication is one-way, with decisions trickling down without explanation. Great cultured organizations embrace open dialogue and cross-functional collaboration where diverse ideas are welcomed.
Bad cultured organizations reward busywork and hours worked. Great cultured organizations prioritize results and value work-life balance, recognizing the importance of sustainability and employee well-being.
Bad cultured organizations exhibit siloed thinking, with departments working in isolation. Great cultured organizations promote cross-functional teamwork, encouraging collaboration across departments to solve problems together.
Bad cultured organizations have a fear-based leadership style, where employees are afraid to speak up. Great cultured organizations foster a psychologically safe environment, where everyone feels comfortable sharing their thoughts without fear of reprisal.
Bad cultured organizations resist change, holding on to old processes and systems even when they no longer work. Great cultured organizations are agile and continuously adapt, encouraging experimentation and iteration to stay competitive.
2. How to build the right culture?
Now that we have built Organizational values or founding principles. there are some key strategies for Building a Strong Organizational Culture, when you are starting up and there is no defined culture in the organization.
2.1. Define and Communicate Core Values
Begin by clearly defining the core values that are important to your organization. These should be communicated regularly through leadership speeches, team meetings, and internal communications. Employees should understand how their work connects to these values and why they matter.
2.2. Hire for Cultural Fit
Hiring employees who align with the company’s values is essential to maintaining a strong culture. During the recruitment process, assess not only technical skills but also how candidates’ attitudes, behaviors, and beliefs fit with the organizational culture. Employees who are a good cultural fit are more likely to thrive and contribute positively to the company.
2.3. Lead by Example
Leaders should model the behaviors they want to see in their teams. If you want to foster a culture of transparency, openness, or accountability, it starts at the top. When leaders embody the company’s values, employees are more likely to follow suit.
2.4. Foster Open Communication
Encourage a culture where employees feel comfortable sharing ideas, giving feedback, and raising concerns. Regular town halls, one-on-one meetings, and feedback loops can promote an atmosphere of trust and inclusivity. When employees feel heard, they are more engaged and loyal.
2.5. Celebrate Achievements
Create a culture of recognition where successes are celebrated, whether it’s through formal awards, bonuses, or simple public acknowledgment. Recognizing employees for their hard work reinforces positive behaviors and encourages others to strive for success.
3. How to lead an organization through a cultural transformation
But what if you landed in an organization when the culture was already built. How to lead the organization through a cultural transformation.
First, I want to remind that Cultural transformation of an organization that is set in its own way is 100x more complex than building a billion dollar product. So if you ever land yourself in such situation, use the below framework to see whether the organization that you are in is small (<$100M) or Big and then are you playing small game (Tactical, Juggling through toxic culture in a highly politically charged culture) or Big game (Focus on strategic, value multiplier, high-impact initiatives).
This was my mental model for early professionals to reflect how staying in the company can help build or limit their career. In short, never play small game in a small company and if possible avoid playing small game altogether.
But if you are a leader and you have to lead the organization through the cultural transformation, then follow this framework:
3.1. Evaluate
We will start with an evaluation of culture any organization. This is the first exercise that I do and I have trained many leaders on how to do this in a fair way. The goal here is not to compare the culture of one organization with the other, which many incoming leaders do, but to evaluate given what the organizational objectives are, is the organization culture conducive to achieving it.
In order to achieve a congruence between business objective and organizational culture, we need to look at Nadler Tushman Congruence Model that talks about 4 components — Culture, tasks, Structure, and People — that must be in congruence with each other to convert an organizational strategy into business performance. Only a highly congruent organization can transform its strategy into performance.
The higher the congruence, or compatibility, amongst these elements, the greater the performance.
So what are these components? Let us look at them one by one:
3.1.1. Tasks: Defining Roles and Incentivizing Excellence — Who does what in the organization, and how is good work rewarded by senior leaders?
A company’s ability to succeed depends largely on how tasks are distributed and how effectively they are carried out. Tasks define the day-to-day activities and responsibilities of employees and should be aligned with their skills and the company’s broader objectives. The clarity in task delegation ensures that employees know their roles and have the necessary autonomy or guidelines to perform them well.
Key Questions to Answer:
1. Does the work require specific knowledge or skill?
2. How standardized is the work (rules, policies, procedures)?
3. How is work measured, incentivized, and rewarded?
The Role of Skill and Knowledge:
In organizations where business objective demands specialized knowledge, such as Machine learning, it is imperative to understand the key skills that staff need to have to play in the new landscape. This would necessitate upskilling existing staff, hiring new staff with the required skill sets, and also nurturing and retaining such talent.
Standardization of Work:
I have seen organizations struggling with drawing a boundary on what responsibility or tasks belong to which role. This leads to a structure in which a few people wearing multiple hats and while it makes sense to do it when the organization is 20–30 people, it rarely makes sense as the organization starts growing beyond that. Soon you will have dropped balls and single point of failures in the organization. The level of standardization though will vary by industry and function. A healthy culture balances necessary guidelines with the freedom to innovate.
Reward and Incentivization:
How employees are recognized for their contributions defines the value system of the company. Are achievements celebrated openly? Do rewards prioritize teamwork or individual accomplishment? Misaligned incentives can create silos, where employees prioritize personal gain over collective success. For instance, if a company emphasizes collaboration but rewards only individual performance, this mismatch will hinder the team-oriented culture they aim to build.
I strongly suggest reading the article ‘On the folly of rewarding A, while hoping for B’ — Kerr Steven.
3.1.2. Organizational Structure: Defining Roles and Lines of Authority — Who reports to whom, and how do management policies differ from control policies?
The organizational structure influences how work flows, decisions are made, and how information is shared. It also has a direct impact on company culture. A structure that encourages openness and collaboration can foster innovation, while one that is too rigid may stifle creativity and slow decision-making.
Key Questions to Explore:
1. How is the company organized? Who reports to whom? Are there dotted lines of authority?
2. Are there distinct business units or separations?
3. How clear is the organizational structure to employees?
4. Is there healthy “coopetition” between senior leadership?
Reporting and Leadership Dynamics:
Who reports to whom greatly influences an organization’s ability to execute its strategies. For instance, having Product Management report to a CTO instead of a CPO could stifle product innovation because of a narrow technological focus. Similarly, reporting misalignments, like design teams reporting to technical heads, could dilute creative excellence.
Clarity of Structure:
Bad organizational cultures often suffer from unclear or convoluted structures. When reporting lines are ambiguous, employees may be unsure of their roles and responsibilities, leading to inefficiency and disengagement. An effective culture ensures that reporting relationships are clear and well-communicated.
Healthy Co-opetition:
In organizations with distinct business units, a healthy level of competition (co-opetition) between leadership can foster innovation and efficiency. However, unhealthy competition or poor cooperation can lead to fragmentation, where different units work in silos rather than aligning toward shared goals.
3.1.3. People: Understanding Motivations and Interactions — Who are the people in the organization, and what drives them internally and externally?
At the core of any organizational culture are its people. The motivations, values, and interactions of employees determine how work gets done and how well the organization functions as a whole. Leadership plays a crucial role in setting the tone for the rest of the team, but understanding individuals’ motivations — whether for recognition, career growth, or compensation — is essential for building a cohesive workforce.
Key Questions to Answer:
1. Who are the key people and where do they lie in modified 9 Box and change adoption
2. Who interacts with whom to get work done?
3. What are employees’ preferences for compensation, rewards, career progression, recognition, and organizational commitment?
3.1.3.a. Key People and Framework to assess Change Readiness
Thriving organizations are living organisms, they change rapidly so much so that startups / early stage companies change completely every six months and Late Stage/Big corporations go through a major change every two years. Those who do not end up dying. As the organization change, some people evolve to embrace the change, while some resist. It is important to understand who falls in which bucket — The one who embraces the change of the one who resists change.
To map this out, we will use a variant of Product diffusion curve, which you may remember looks something like this.
In traditional product adoption, the Diffusion of Innovation model classifies consumers into segments based on their willingness to adopt a new product. These segments — Innovators, Early Adopters, Early Majority, Late Majority, and Laggards — help companies understand how to introduce new products to different audiences.
This same concept can be applied to organizational change, particularly cultural transformation. By identifying where employees fall on a similar adoption curve, leaders can strategically manage the rollout of new cultural initiatives. Both AirBNB and Zomato had to go through the journey of rolling out new culture — a culture of innovation.
In this article, we’ll introduce a variant of the product diffusion curve for cultural transformation, where the segments are: Champions, Early Joiners, Wait and Watch, Laggards, and Resistors.
3.1.3.a.1. Mapping Employees to the Change Curve
To effectively transform a company’s culture, it’s essential to know how employees will react to change. Through the lens of these five buckets, one can take targeted actions to bring everyone on board through the cultural transformation.
3.1.3.a.1.1. Champions
• Who They Are: Champions are the leaders of cultural transformation within the company. They are proactive, aligned with the vision of the new culture, and influence others with their enthusiasm. These individuals aren’t just supportive; they actively advocate for and drive the change. They tend to be seen as role models by their peers and are usually well-respected across the organization.
• How to Engage Them: Empower Champions by giving them formal roles in the cultural transformation initiative. They should be involved early and often, whether that means leading workshops, mentoring others, or offering feedback on strategies for embedding the new culture. Publicly recognize their efforts to amplify their influence.
3.1.3.a.1.2. Early Joiners
• Who They Are: Early Joiners are enthusiastic about the new culture but may not necessarily lead the charge like Champions. However, they quickly adopt the new norms, values, and behaviors when presented with the rationale for change. These employees are eager to contribute but need more guidance and support than Champions.
• How to Engage Them: Provide Early Joiners with structured opportunities to get involved, such as training sessions, discussions with leadership, and cross-functional team activities. Offer them the tools they need to succeed in their new roles within the changing culture and encourage them to help support their peers.
3.1.3.a.1.3. Wait and Watch
• Who They Are: This group comprises employees who prefer to observe how the change unfolds before committing. They aren’t necessarily against the change but are hesitant, cautious, and need proof that it will benefit them and the company before they get on board.
• How to Engage Them: For these employees, it’s essential to provide data, case studies, or examples that demonstrate the benefits of the new culture. This group responds well to measurable results and positive peer influence. Highlight success stories from Champions and Early Joiners, and address any concerns they may have in a transparent manner. Gradually build their trust in the process.
3.1.3.a.1.4. Laggards
• Who They Are: Laggards are slow to adopt cultural changes, often due to a deeply entrenched belief in the old ways of doing things. They may reluctantly comply when the new culture is fully embedded, but they are unlikely to proactively support it.
• How to Engage Them: Rather than pushing too hard, it’s often more effective to give Laggards time to adjust. Continue to reinforce the cultural values through consistency, peer pressure, and by making the benefits of the new culture clear. Help them understand that the change is inevitable, but show patience and avoid alienating them.
3.1.3.a.1.5. Resistors
• Who They Are: Resistors actively block cultural transformation, either through direct opposition or subtle sabotage. They may feel threatened by the new culture or hold significant power in the old one. Left unchecked, Resistors can derail transformation efforts by influencing others or creating roadblocks.
• How to Engage Them: Address Resistors head-on, using a combination of empathy and firm expectations. Understand their motivations for resisting, and attempt to convert them by involving them in the process. If their opposition is based on fear or misunderstanding, offer opportunities for dialogue. However, if Resistors become a persistent barrier, leaders must be prepared to either manage them out of positions of influence or, in extreme cases, consider whether they still belong in the organization.
3.1.3.a.2. Applying the Curve: Using the Map for Cultural Transformation
Once employees are mapped onto this curve, leaders can use this knowledge to tailor their transformation strategy for maximum impact. Here are five key steps:
3.1.3.a.2.1. Identify Key Individuals in Each Bucket
Start by assessing where each employee falls along the cultural adoption curve. This can be done through surveys, observation, and one-on-one conversations. Look for patterns in their behavior toward change, and be sure to talk to managers and leaders who work closely with them.
3.1.3.a.2.2. Create a Champion Network
Empower your Champions to become the ambassadors of the new culture. Give them leadership roles in the transformation process, and ensure they have the visibility and tools they need to influence others. The more vocal and visible Champions are, the more likely they will bring others along.
3.1.3.a.2.3. Focus Early Engagement on Champions and Early Joiners
Early successes are crucial for momentum. Focus your efforts on those who are already aligned with or enthusiastic about the new culture. Invest in training and equipping these individuals to succeed in their new roles. As they begin to see positive results, they will create a ripple effect throughout the organization.
3.1.3.a.2.4. Provide Clear Communication and Evidence for the Wait and Watch Group
For employees in the “Wait and Watch” category, clear communication is essential. Offer them data, metrics, and real-life examples of how the new culture is succeeding. Create feedback loops where their concerns can be addressed, and highlight the positive outcomes from the early adopters.
3.1.3.a.2.5. Address Resistors Proactively
While Resistors should be given a chance to adapt, leaders must not ignore the damage they can do if left unchecked. Engage them early, provide opportunities to air grievances, and offer them a role in shaping aspects of the new culture. If they continue to block progress, leaders must be prepared to take decisive action to minimize their impact on the broader organization.
Conclusion
Cultural transformation is never easy, but the framework above acts as a lens to guide your workforce through change, tailor senior leadership’s approach to maximize engagement, minimize resistance, and ensure the new culture is successfully embedded into your organization’s DNA.
Cultural change isn’t just about policies or procedures — it’s about people. Understanding where your employees stand in relation to change is key to making that transformation a lasting success.
3.1.3.b. Internal and External Motivations:
People are driven by different factors. For some, recognition and career progression are key; for others, work-life balance or social impact might be more important. Understanding these drivers helps leadership foster a culture that aligns with employee motivations, ensuring higher engagement and satisfaction.
3.1.3.c. Cross-functional Collaboration:
In organizations where departments regularly interact, such as between engineering and marketing, a culture of collaboration is critical. If teams are motivated by conflicting incentives — e.g., sales rewards closing deals at any cost while product teams prioritize quality — friction will emerge. Strong organizational cultures balance these interests, fostering cooperation rather than competition among teams.
3.1.3.d. Talent Retention and Growth:
Organizations that nurture their employees’ aspirations tend to have stronger cultures and lower turnover. Career development opportunities, skill-building, and recognition not only retain top talent but also make the organization more resilient by developing future leaders.
3.1.4. Culture: Core Beliefs, Behavior, and Communication — What are the core beliefs, behaviors, and communication patterns in the organization?
The most intangible but arguably the most influential part of an organization’s culture is its underlying beliefs and values. This encompasses how employees think, communicate, and behave on a daily basis, shaping everything from decision-making to risk-taking.
Key Questions to Answer:
1. What are the beliefs and values of individuals in the organization?
2. How does information flow throughout the organization?
3. How can leadership be leveraged?
3.1.4.a. Beliefs and Values:
Values form the bedrock of a company’s culture. Are people motivated by innovation, stability, or customer satisfaction? Companies with strong core values like integrity, teamwork, and accountability tend to attract people who resonate with those beliefs. This alignment creates a cohesive work environment.
3.1.4.b. Communication Patterns:
Transparent communication is critical to a healthy culture. In some companies, information is hoarded by leadership, leading to mistrust and disengagement. In others, open communication allows for rapid problem-solving and innovation. A good culture is one where information flows freely, allowing employees to contribute meaningfully to the company’s goals.
3.1.4.c. Leveraging Leadership:
Leaders must model the values and behaviors they want to see in the organization. If the leadership prioritizes openness, transparency, and innovation, these values will filter down to the rest of the organization. Conversely, if leadership operates in secrecy or tolerates poor behavior, the rest of the organization will follow suit.
Conclusion
An organization’s culture is a powerful force that influences every aspect of its functioning. From task distribution to organizational structure, from the motivations of individuals to core beliefs, culture determines whether a company thrives or merely survives. Leaders play an essential role in shaping and nurturing culture, making it a critical area of focus for any organization aiming to achieve long-term success. By carefully examining these four elements — tasks, structure, people, and values — organizations can ensure they build a culture that fosters collaboration, innovation, and sustained growth.
3.2. Codify — Defining the Culture
Once we have assessed the organizational culture, we can move onto codifying the desired culture. This means clearly defining the values, behaviors, and norms you want your organization to embrace. Codifying culture creates a reference point against which all behaviors and actions within the company can be aligned.
Example: A company that values innovation might codify behaviors such as risk-taking, continuous learning, and the open sharing of new ideas without fear of criticism.
Since we have already discussed how to do this in section 1.1.4. How to Build Core Values for Your Organization, we can go onto the next section.
3.3. Align — Ensuring Structural and Behavioral Alignment
Once the desired culture is codified, the next step is to align your people with this cultural vision. This involves assessing attitudes towards change, understanding individual and collective readiness, and ensuring that employees at all levels are prepared to embrace the new values and behaviors. Misalignment in people’s attitudes and perceptions can pose a significant risk to the success of any cultural transformation.
We can leverage the cultural change management curve framework that we discussed earlier to bring onboard the change agents, the early joiners, etc. Whether we deal with Resistors proactively or not depends upon the context as many a times it may make sense for resistors to be touched last.
3.4. Change — Embedding Cultural Shifts
Cultural transformation requires active change across the organization. This involves not only communicating the desired changes but also creating mechanisms to embed these shifts into everyday activities.
This phase is about taking action to ensure the desired culture comes to life. This involves rolling out the cultural values into the organization, connecting it to the reward cycle, highlighting it through repetitions, and measuring the change regularly.
Key Actions:
• Initiate Change Programs: Start with change programs such as training, workshops, and initiatives that promote the desired culture. Employees should be educated on the behaviors, values, and attitudes expected of them.
• Promote Quick Wins: Encourage visible, small-scale wins that reflect the new cultural direction. These wins demonstrate the benefits of the new culture and inspire further participation.
• Hold People Accountable: Cultural change requires everyone to participate. Leadership should hold employees accountable for demonstrating the new values and behaviors. This is done through regular feedback and coaching.
In bad cultured organization, I have seen everybody being treated equally. Fair. right?
Wrong.
“Maturity is when you realize, Fairness is not treating everyone equally but everybody according to the equity”
While most staff evolve with the change, there are times when some employees will become a hurdle to achieving the new state. Many organizations go through a 9 Box Exercise, which typically looks like this:
We suggest a variant that takes into account the cultural readiness of staff.
Explanation of Each Bucket:
3.4.1. Cultural Asset (Low Performance, High Cultural Alignment)
Description: These employees strongly embody the company’s cultural values but currently struggle with performance.
Action: First action would be to re-evaluate the role that they are in. Usually an employee who embodies organization culture, but underperform can be turned into a high performer in a role that aligns best to their skill sets. Once they are in new role Invest in skill-building, coaching, and training to build them into emerging leaders.
3.4.2. Emerging Leader (Medium Performance, High Cultural Alignment)
Description: These employees are performing well and are strongly aligned with the company culture. They have the potential to become future leaders. Great organizations should have at least 20% of the employees here.
Action: Provide leadership development opportunities and mentorship to groom them for higher roles. The biggest challenge I have seen is to discover this group as most often they are hidden under layers of management that are great at managing upwards but dont really bring any value add. Refer Founders Mode from AirBNB CEO Biran Chesky Talk.
3.4.3. Potential Leader (High Performance, High Cultural Alignment)
Description: Top performers who are also cultural champions. These individuals are the ones who take the organization to the next level. Great organizations should have at least 20% of the employees here.
Action: Recognize and reward their contributions. Involve them in strategic initiatives and offer leadership roles. Save them from low level politics. These employees when involved in Big game bring big dividend for the organization in the long term.
3.4.4. Potential Misfit (Low Performance, Medium Cultural Alignment)
Description: Their performance is low, and they only show partial cultural alignment. They might struggle in the current environment.
Action: Determine if they can be coached to improve both performance and alignment. If not, consider a reassignment or exit. I want to highlight that I am not using the word exit in a light way. But sometimes, mutual separation is a new start for both the employee and the organization.
3.4.5. Complacent (Medium Performance, Medium Cultural Alignment)
Description: Consistent performers with reasonable alignment to cultural values. They contribute steadily but are not top-tier in either category. I find this group extremely detrimental to rebooting an organization for the next level. As they say “What got you here will not get you there” — Complacent groups are the prime example of this. Deepinder Goyal, Zomato CEO, explains how he had to let go of their top brass as they had gotten complacent after the IPO.
Action: Coach them in as direct form as possible, observe for changes. Some will come out of complacency and will either get to ‘Emerging leader’ quadrant or ‘Star on Edge’ quadrant.
3.4.6. Star On Edge (High Performance, Medium Cultural Alignment)
Description: High performers who show signs of cultural misalignment. While their output is excellent, they may clash occasionally with core values. They are on Edge about the cultural elements.
Action: Provide coaching and align them with the organization’s cultural expectations. If alignment isn’t achieved, it could become problematic despite their performance.
3.4.7. Disconnected (Low Performance, Low Cultural Alignment)
Description: These employees are underperforming and do not align with the company’s culture, posing a significant risk to the organization. From my experience, I have seen 10% of such individuals in organization that struggle at innovation. They are not a lot but they along with their ‘disruptor’ and ‘Drag Force’ counterparts can throttle any engine.
Action: This is a critical zone for performance management or exit discussions. Immediate intervention is required.
3.4.8. Drag Force (Medium Performance, Low Cultural Alignment)
Description: These employees perform moderately well but are misaligned culturally. They may negatively influence others.
Action: Address misalignment through coaching, and clarify expectations. If cultural misalignment persists, they may not be the right fit.
3.4.9. Disruptive (High Performance, Low Cultural Alignment)
Description: These individuals deliver strong results but are poorly aligned with the company’s values. They are disruptive and the most detrimental as they command respect from ‘Disconnected’ and ‘Drag Force’ group.
Even 5% of them could bring the whole engine down. I have seen senior leadership struggle with this group the most. They seem indispensable given their contribution and end up hurting the most in the long run.
Action: Immediate focus on aligning them with the culture. If they refuse to adapt, their misalignment might outweigh their performance benefits, and tough decisions need to be made.
Disruptive Individual at the top level could do even more harm as they skew dynamics given their priveled access to information.
“Your contribution should not be based on privileged access to information.” — Jensen Huang
I suggest regular skip level meetings to discover ‘Emerging leaders’ and ‘Future Leaders’ hidden underneath Disruptive Leadership.
Three ways to avoid this skewed dynamics beyond skip level meetings:
3.4.9.1. Include the project’s DRI (directly responsible individual) in exec discussions, regardless of their level.
3.4.9.2. Get updates directly from the DRI instead of filtered through management.
3.4.9.3. Eliminate behavior like pre-meetings before decision meetings and multiple management layers polishing a slide deck.
This Modified 9-box framework helped me evaluate culture of multiple organizations, advise leadership on the right course of action, and build a growth culture in the organizations.
3.5. Freeze: Reinforcing and Sustaining the Culture
The final step in the cultural transformation process is to “freeze” the new culture. This means embedding it so deeply into the organization that it becomes self-sustaining and resistant to regression.
This stage involves long-term reinforcement, where the new culture is institutionalized through ongoing practices and policies.
Build Values in organization. What gets iterated, gets emulated. What gets displayed day-to-day, gets embedded in the fabric.
“Don’t just tell but live, breath, do.”
Build values in how we do business to how we provide coaching to how we reward excellence.
Key Actions:
• Institutionalize New Practices: Make the new cultural practices part of standard operating procedures. Regularly reinforce the culture through communications, training, and leadership modeling. Ensure the culture becomes integrated into all HR practices — from recruitment and onboarding to performance management and career progression.
• Recognize and Reward Behavior Continuously: Reward and recognize employees who embody the new culture. This could be through awards, promotions, or peer recognition programs. Consistent reinforcement signals to employees that the cultural change is here to stay.
• Monitor and Adjust: Culture is not static, so regularly assess whether the new culture is being maintained. Conduct regular surveys, feedback sessions, and culture audits to identify any potential misalignment and make necessary adjustments.
“Culture should be fluid” — Don’t get rooted to the values that your founders built. If something does not make sense in the new world, it is okay to iterate. Remember
“What does not flow is already dead.”
Conclusion
Cultural transformation is a complex and long-term process that involves a careful blend of strategy and execution. By following the Codify, Align, Change, Freeze framework, organizations can approach this challenge in a structured way. Codifying culture ensures that everyone understands the desired state. Aligning structures and incentives guarantees that day-to-day operations support the cultural goals. Enacting changes through initiatives and accountability embeds the new culture, while freezing these changes ensures sustainability. With consistent effort and leadership commitment, an organization can successfully navigate the cultural transformation journey, ultimately enhancing performance and employee satisfaction.
Organizational culture is a powerful determinant of business success.
It influences everything from employee engagement and productivity to innovation and customer satisfaction. A strong culture is not built overnight; it requires consistent effort from leadership, alignment with core values, and a commitment to empowering employees. By investing in building and maintaining a positive organizational culture, companies can create an environment where employees thrive, and business goals are exceeded regularly.
