The Role of Culture Change in A Business Turnaround

Culture change plays a critical role in turning around a struggling business. It can be the difference between the success and failure of a turnaround plan. Business owners must understand the importance of a culture shift and implement changes that will improve the overall health of the business. In this article, we discuss the role of culture change in a business turnaround and how it can be implemented successfully.

What is culture and why is it important?

Culture is the shared values, beliefs, and practices of an organisation. It shapes the way employees think, behave, and interact with each other and with customers. In a turnaround situation, a company's culture can be a significant obstacle to success. If the culture is toxic or dysfunctional, it can lead to low morale, high turnover, and poor performance. Therefore, a culture shift is necessary to create a healthy work environment and improve employee engagement and productivity.

How to implement successful culture change? 

1. Define the current culture and develop a vision for the future culture: to implement a culture change, business leaders must first understand the current culture and identify the root causes of its problems. This can be done through surveys, interviews, and focus groups with employees. Once the issues are identified, leaders must create a vision for the desired culture and communicate it effectively to all employees. This vision should be based on the company's values and goals, and it should be aligned with its mission statement.
2. Lead by example: business owners must then lead by example and model the desired behaviors. They must also empower employees to participate in the change process and give them the tools and resources they need to succeed. This can include training programs, coaching, and mentoring.
3. Accountability: business owners must hold themselves and their teams accountable for their actions and results. This can be achieved through performance metrics and regular feedback sessions. Business owners should also recognise and reward employees who demonstrate the desired behaviors and contribute to the company's success.

Implementing a culture change can be challenging, and it takes time and effort. However, it is a necessary step in turning around a struggling business. A healthy culture also attracts and retains top talent, which is crucial for long-term success. Business owners must understand the importance of culture and take the necessary steps to implement change. This includes understanding the current culture, creating a vision for the desired culture, modeling the desired behaviors, empowering employees, and holding themselves and their teams accountable. A healthy culture can improve employee engagement, productivity, and customer satisfaction, and it is essential for long-term success.

Find Out More

Groves & Partners are experts in advising struggling businesses and assisting them with turnarounds. As advisors on valuing business, and the sale of businesses and companies, we are particularly experienced in developing strategies to help ensure a company is profitable, viable and able to maximise its value.

To find out more about how we can partner with you to achieve success in the turnaround of your business, contact us on 1300 892 717 (+61 2 7208 7970) or email info@groves.com.au.