It is widely known that to realize its full competitive potential, a firm’s strategies and culture must be aligned. One implication of this observation is that when a firm changes its strategies, it must often change its culture.

But these simple ideas create one problem: Culture change is very difficult.  

What is it about a culture that makes it so difficult to change? We identify five reasons in our book, The Secret of Culture Change:

1. Culture is diffused throughout an organization.

Organizational cultures are typically diffused widely throughout an organization. Thus, the answer to the question, “Who is responsible for an organization’s culture?” is usually that everyone in a firm is responsible for its culture. When everyone is responsible for your organization’s culture, then no one is responsible for your culture. When you have a problem with manufacturing quality in your company, you know to call the VP of manufacturing. If you aren’t getting the kind of product recognition you need in the marketplace, you call the VP of marketing. If you can’t hire the kind of employees you want, you know the VP of human resources is responsible for addressing this issue. Who do you call when you must change your culture so you can more effectively implement your strategies?

2. Culture is an intangible asset.

Unlike many other resources that are important for your company’s financial success, organizational culture is an intangible asset. It is the values, norms, and beliefs that guide employee behavior when formal rules and policies do not exist or fail to give guidance. Thus, organizational culture is a social construct—culture is real in its effects but exists mostly in the minds and thoughts of your employees. While your culture can have a profound effect on the ability of your firm to implement its strategies, it is nevertheless an “invisible asset,” a term first introduced by Hiroyuki Itami and Thomas Roehl in their book, Mobilizing Invisible Assets. How do you “grab hold of” the thoughts, values, beliefs, and preferences of people in your organization to change them?

3. Culture change threatens the status quo.

Changing your organization’s culture often has the effect of upending many established practices and policies associated with your old culture. “Winners” in the old culture might become “losers” in the new culture; people who were on the “outside” of the old culture may be central and on the “inside” in the new culture; people who were your close friends and allies in the old culture may become mere acquaintances or even adversaries in the new culture. In this sense, culture change flips the script that your employees have known and used in your organization. Most people don’t like any kind of change—especially change that can affect their own status and the status of their friends in an organization. Changing your organization’s culture takes this resistance to the next level! 

4. Culture change is both fast and slow.

Culture change can proceed at different rates in different parts of your organization. Some organizational changes—approving a budget, promoting an employee, altering an HR policy—can happen quickly. Others—building a new plant, adjusting your supply chain, rebranding a product—can take longer. However, changing your organization’s culture is often both fast and slow. It can be fast when certain parts of your organization—like a particular office or work group—are able to change their culture quickly. But these “fast” culture changes often conflict with other parts of an organization where culture change is slow. And “slow” culture change can stop “fast” culture change. 

5. Culture change can test the commitment of business leaders.

Given the complexity of the culture change process, it is not unreasonable to expect that a business leader’s commitment to culture change can vary over time. In the early days of culture change, leaders can voice their commitment to creating a new culture, can fund culture training and other change initiatives, and can create a wide variety of culture change task forces. However, all of this is what economists call “cheap talk,” a phrase introduced by Vincent Crawford and Joel Sobel in “Strategic Information Transmission.” Employees throughout the firm know—or at least suspect—that their leader’s commitment to creating a new culture can change suddenly, and dramatically so.

Taken together, these attributes of culture suggest that culture change will often be challenging and difficult. Culture change is usually not about efficiently applying a single model of organizational change—it is more often about combining multiple models of change in a complex and constantly evolving way. It is operating in both top-down and bottom-up processes, appealing to both your employees’ hearts and their heads, and moving both fast and slow as you create quick culture change wins within your company while also trying to alter your firm’s overall culture.

Find out how to overcome these five challenges and successfully create culture change in part two of this blog series.