How to Change Company Culture

When organizations go through a significant change, like a merger, culture inevitably shifts. Two previously distinct entities must come together, align their values, and function as one. Without an intentional approach, misalignment can lead to friction, disengagement and inefficiency. That’s why cultural transformation isn’t a standalone effort, it’s a critical part of effective change management to recognize your business goals. 

Company Culture and Change 

Company culture is the collective mindset, behaviors and values that shape how an organization operates. It’s the written and unwritten code that influences decision-making, communication and collaboration. While some aspects, like mission statements and policies, are explicitly defined, much of culture is reflected in everyday interactions, habits and attitudes. 

A positive company culture fosters trust, innovation and collaboration, engaging team members and motivating them to contribute to shared goals. On the other hand, a negative culture breeds resistance, confusion and toxicity. Silos form, communication breaks down, and employees become disengaged. Without intervention, these cultural fractures can derail even the most well-planned organizational changes. 

 The Role of Company Culture 

Leadership plays a defining role in shaping culture. Employees take cues from executives and managers, while company policies, communication styles and recognition programs reinforce workplace norms. For example, a culture of innovation thrives when risk-taking is encouraged. A rigid culture, on the other hand, stifles creativity. 

Culture directly impacts business performance and employee well-being. A strong, positive culture fuels engagement, retention and collaboration, while a misaligned or toxic culture leads to low morale and high turnover. It also determines how an organization navigates change. Companies that prioritize adaptability transition smoothly through mergers and restructuring, while those resistant to change struggle.  

Reasons for Company Culture Changes 

Company culture evolves in response to internal and external forces. Major changes often require a shift in values, behaviors, and workplace norms to ensure long-term success. Here are the most common reasons organizations undergo a culture change:  

Mergers or acquisitions – Aligning disparate corporate cultures is essential to creating a unified workforce. 

Adjusting to market changes – Adapting to industry trends, consumer expectations or technological advancements requires cultural agility. 

New leadership and priorities – New executives often bring fresh strategies, values and priorities. 

Corporate restructuring – Downsizing, expanding or reorganizing operations disrupts established norms and requires cultural alignment.  

 When Does a Company Require a Culture Shift? 

A company’s culture should support its people and business objectives. If it’s not, some key indicators signal the need for a culture shift: 

• High employee turnover – Frequent resignations may indicate dissatisfaction, lack of alignment with company values, or poor leadership. 

• Stagnant business growth – A company struggling to expand may suffer from a risk-averse or resistant culture that stifles innovation. 

• Poor team collaboration – Silos, communication breakdowns, or lack of trust can  prevent teams from working effectively together. 

• Disconnect between leadership and employees – When employees feel unheard or disconnected from leadership’s vision, morale and engagement suffer. 

• Resistance to innovation – A reluctance to adopt new processes, technologies or ideas can prevent progress and competitiveness. 

• Misalignment of core values – If company actions don’t reflect stated values, employees and customers may lose trust in the organization. 

• Customer complaints – A company’s culture directly impacts customer interactions. A rise in complaints can indicate internal issues affecting service quality. 

• Decline in productivity and engagement – Disengaged workers mean inefficiency, lower motivation and reduced performance. 

Why Change Management is Critical to Culture Change 

Changing culture requires shifting the way people think, interact and operate at every level within an organization. But a new culture can’t be mandated by HR or through performance management tactics. A new culture must be actively embraced by people for it to take hold.  

Structured change management is essential here because it actively implements cultural shifts in ways that resonate with employees. Every change, whether it’s a new leadership approach, a restructuring, or a shift in corporate values, affects different groups in different ways. Change management provides a structured approach to guide employees through the transition, helping them adapt, understand their role in the change, and embrace a new way of working. 

High-Level Steps to Manage a Change in Company Culture 

Transforming company culture is a structured process that requires clear goals, active leadership and ongoing reinforcement.  

Define the desired culture 

Before any cultural transformation begins, leaders must articulate a clear vision of the desired company culture. What values, attitudes and behaviors will define the workplace and bring their desired culture to life? These behaviors should be observable, measurable and aligned with company values to ensure they can be reinforced at every level. 

Assess the current culture 

Leaders must evaluate the existing culture by analyzing leadership behaviors, employee engagement, communication norms and workplace dynamics. HR or change managers should gather insights from employees through surveys, focus groups, and one-on-one interviews to provide a reality check on workplace culture. This data helps identify gaps between the current and desired culture, as well as potential resistance points.  

Engage leadership 

A culture shift requires unwavering commitment from leadership. Executives and managers must actively model the behaviors they want employees to adopt. Their engagement sets the tone and provides the credibility needed to drive the transformation. 

Develop change management strategy 

An effective and structured transition requires applying change management principles. This includes defining key milestones, creating engagement plans, and proactively addressing resistance. 

Communicate the change 

Culture change doesn’t happen through policy updates alone; it must be communicated consistently and persuasively. Leaders should clearly explain why the change is happening, how it benefits employees, and what is expected of them. 

Provide employee training and development 

Shifting culture requires equipping employees with the skills and knowledge needed to embrace new behaviors. Training programs, leadership development and hands-on coaching ensure employees can confidently adapt to the cultural shift. 

Employees are the heart of company culture, and their involvement is critical to success. Organizations should create opportunities for employees to contribute to the cultural transformation, such as through feedback sessions, employee-led initiatives, or HR-led recognition programs that reinforce the desired culture. 

Monitor progress, measure impact and sustain change 

Culture change is an ongoing process that requires organizations track progress, measure engagement levels, and continuously refine their approach based on employee feedback and key performance indicators. Long-term success depends on embedding the new culture into everyday operations, reinforcing desired behaviors, and celebrating cultural wins. 

Challenges in Changing Company Culture 

The two most common challenges in a culture change are resistance behaviors from employees and inconsistent leadership. The former occurs most often due to a lack of awareness about a change, fear, and past experiences with failed initiatives. Employees may disengage, push back, or revert to old habits if they lack trust in leadership. Instead of dismissing resistance or blaming people, organizations should engage employees, address concerns, and show the benefits of change through action.  

The latter challenge usually happens when leaders fail to align their behavior with the desired culture. If leadership sends mixed messages, like promoting collaboration but working in silos, employees may do the same.  

Importance of Leadership for Driving Culture Change 

Not only do employees look to leadership for cues on expected behaviors, but they also expect clear, honest communication. Employees want to understand why change is happening, how it affects them, and what role they play. Uncertainty breeds resistance, so leaders must share the vision behind cultural shifts, acknowledge concerns, and invite feedback. Open dialogue creates confidence in the change and empowers employees to embrace the new culture. 

How to Measure the Impact of Culture Change 

Measuring the impact of culture change requires tracking progress at the individual, team and organizational levels. Without clear metrics, it’s difficult to determine whether cultural shifts are taking hold or delivering the intended benefits. Prosci’s 12th Edition of Best Practices in Change Management research shows a strong correlation between measuring compliance and overall performance with meeting and exceeding project objectives. Specifically, we found that of those who measured compliance, 76% met or exceeded project objectives, compared to only 24% of respondents who did not measure compliance. 

Here are a few key metrics that offer valuable insight into whether the cultural shift is taking root: 

• Engagement Levels – Employee sentiment surveys, participation in training and cultural initiatives, and feedback sessions indicate whether employees are embracing the new culture. 

• Productivity metrics – Workflow adoption, efficiency tracking and collaboration improvements help measure how well teams are functioning under the new culture. 

• Retention rates – How the culture is aligned and whether employees feel connected and supported during the shift.

• Adoption and utilization – Use of new processes, tracking system logins, and monitoring adherence to new policies. 

• Customer satisfaction – Understanding shifts in customer feedback, complaint volume, or Net Promoter Scores (NPS). 

• Overall Business Performance – Financial performance, innovation output, and operational improvements demonstrate whether culture change is driving measurable success. 

 Transforming Culture, Empowering People 

Changing company culture means reshaping how people think, act and collaborate to build a thriving organization. It’s the difference between reacting to change and leading it. When culture aligns with business goals, it fuels engagement, innovation and performance. Success comes from ensuring people at every level are prepared, equipped and supported to make the change a success. 

Empower your people, align your leadership, and lead with confidence. When change is managed with intention, the result isn’t just a new culture, but a stronger, more adaptable organization ready for the future.