How to teach an old corporation new tricks

💼 Culture change has become big business because it is one of the most prominent — and frustrating — challenges facing executives today. Despite mns invested in culture transformation initiatives, research consistently shows that most efforts fail to deliver lasting results. Understanding why requires looking beyond the polished presentations and diving into the actual mechanics of how culture really changes.

Major consulting firms approach culture change with big promises, claiming that companies that create a healthy culture are five times more likely to be top performers and can boost shareholder return and EBIT growth by up to 500%. They position culture as behavior at scale, seeking to activate these traits through organizational practices embedded in policy.

But these methodologies reveal a fundamental misunderstanding about culture change. They focus heavily on structures, policies, and processes — what might be called “ wholesale ” interventions. These are changes that can be executed from a distance, centrally, by senior leadership teams working with consultants in conference rooms, far removed from daily operations.

The wholesale trap: A one-size-fits-all solution is messy, labor-intensive work that doesn’t scale elegantly. It may look like changing the stage-gate processes for R&D projects, pursuing a culture of accomplishment by modifying compensation rules, or mandating uniform KPI dashboards across all departments. These approaches may sound impressive and signal a commitment to transformation, but they rarely work because they target the wrong domain, pushing responsibility downward.

How steering mechanisms actually function: First articulated in Harvard Business Review’s 1993 article Changing the Mind of the Corporation and explored once again in Roger L. Martin’s 2022 book A New Way to Think, the steering mechanism framework identifies elements that operate as an integrated system: formal mechanisms — structures, systems, and processes designed to meet organizational goals — and cultural mechanisms — mental guidebooks that drive collective interpretations and actions.

A theoretical case study: Consider a scenario where a top performer dresses down a subordinate in an abusive and demeaning way during a meeting. If this behavior repeats and people interpret it as the top performer getting away with abuse because of their performance value, a mental guidebook emerges: abusive behavior is fine if you’re a top performer — if you work for one, expect it, and if you become one, you can do it too.

In strong cultures — not necessarily good, just strong — everyone watching such interactions arrives at the same interpretation. In weak cultures, interpretations scatter across the map, with no consistent guidebook emerging. This critical insight involves recognizing that culture derives from a mediating domain called interpersonal mechanisms — the patterns that form as members define and solve problems together. Formal mechanisms don’t influence cultural mechanisms; the connection runs through the interpersonal — or “retail” — domain.

Won’t changing retail culture in organizations with hundreds of employees take forever? Not necessarily. As Fast Company puts it, Kremlin watching doesn’t only happen in Moscow. In companies, managers throughout the organization watch leadership behavior like hawks — when leaders behave in interpersonal interactions the way they want managers to act, mirroring happens faster than most expect, branching down the chain of command.

ROI timelines: Wholesale approaches promise quick turnarounds, but rarely deliver sustained value. Organizations typically see initial momentum within 30-60 days as excitement builds around announcements and new structures, but by 3-6 months, a reality gap emerges as people realize nothing fundamental has changed. The decay phase arrives between 6-18 months when cynicism sets in as the initiative joins previous failed attempts. The net result shows minimal lasting impact and damaged credibility for future initiatives.

What if you inherit a toxic culture characterized by fear, politics, or abuse? Speed matters critically. Specialists suggest removing toxic individuals because they poison the retail domain. Incoming leaders hoping to make change need to overcommunicate the elements they want to preserve while explicitly explaining what requires a cultural evolution, modeling new behaviors while honoring appropriate old ones. Creating psychological safety through vulnerability and openness to feedback helps people believe change is real.