Culture change: how to lead it without losing people

Changing the way people behave at work is tricky. It’s one of the hardest transformations an organisation can take on because it’s asking your people – not just processes – to change, and sometimes quite radically. Embracing new strategies, dealing with restructures and mergers, navigating digital transformation, or handling ever-evolving customer expectations all require different ways of thinking and working. But if handled poorly, organisations can lose the very workers that they want to retain. 

Culture change is the process of carefully changing the everyday habits, beliefs, behaviours, and leadership practices that shape how people work within an organisation. A company’s culture isn’t really defined by what is stated on the website or the values stuck on the office wall. It’s reflected in how people experience work every day, how the managers behave, the decisions that leaders make, and what employees are rewarded for.

Organisational culture change happens when companies:

• Introduce new leadership.
• Merge with another business.
• Shift strategic direction.
• Undergo digital transformation.
• Adapt to new customer expectations.
• Respond to economic pressures.
• Embrace hybrid or flexible working. 

Most culture change initiatives don’t fail because leaders choose the wrong values; they fail because organisations underestimate the behavioural change required to make those values into a reality. Employees clock when leaders announce ambitious cultural aspirations, yet continue rewarding old behaviours.

To illustrate this point, examples can be:

• The promotion of collaboration, yet bonuses are rewarded just for individual performances.
• Innovation is encouraged, but mistakes are criticised.
• Wellbeing is prioritised, but excessive workloads remain unchanged.
• Openness is celebrated, but all major decisions go on behind closed doors.

These inconsistencies create a cynicism within the workforce, where the belief is that leaders say one thing but then do another. Research from the Chartered Institute of Personnel and Development (CIPD) backs this up by highlighting the fact that trust in leadership, fairness, and the employee voice are central drivers that increase performance and boost the wellbeing of staff.

Another factor where culture change fails is having low staff engagement. In the UK, employee engagement is low. Gallup’s State of the Global Workplace research on the UK found that only around 1 in 10 UK employees describe themselves as engaged at work, placing the country among the lowest-performing developed economies for engagement. That’s because disengaged employees are less likely to champion organisational goals or embrace new behaviours that are required during a culture change.

A further common mistake is treating culture change as an internal communications campaign. Displaying new logos, refreshed values, workshops, and launch events rarely change behaviour on their own.

Instead, employees judge culture through their day-to-day experiences:

• How are decisions made?
• How do managers behave?
• Are the right people getting promoted?
• Which behaviours are recognised?
• What happens when someone makes a mistake?

If these experiences don’t change, neither does the workplace culture.

So for HR and business leaders, the challenge isn’t just about changing behaviours, but maintaining trust, engagement, and performance when uncertainty is at its peak. Research shows that employees judge change, not necessarily by the decision itself, but by how leaders communicate, support, and steer them through the process.

Which leads to culture change being inseparable from employee retention. The organisations that navigate change the most successfully recognise that the work culture isn’t to be left on the sidelines, but is the human side of business transformation. Rather than imposing new values from the top down, they involve employees, communicate openly, and equip managers with the tools to lead in a consistent manner.

For those companies that are planning broader transformation initiatives, culture change should sit alongside an effective change management strategy instead of being treated as a separate entity.

Employees rarely leave because change is happening. They resign because they lose confidence in how the change is being managed. Periods of uncertainty will naturally increase anxiety. When communication becomes inconsistent or leaders appear absent, employees begin filling in any information gaps with assumptions.

This is especially true following restructures or redundancies. The CIPD’s Good Work Index in 2024 revealed that 22% of employees who left their previous job cited unhappiness with senior management as one of their reasons for leaving, underlining the influence that leadership behaviour has on retention during periods of change. Alongside that sits their 2024 resourcing and talent planning survey which found that 56% of employers said retaining talent had become more difficult over the previous year, making trust and communication critical during any culture change initiative.

For HR leaders, this is an important distinction – retention isn’t achieved by avoiding difficult decisions but by handling difficult decisions fairly, transparently, and in a consistent manner.

Employees are more likely to remain committed when they understand:

• Why change is necessary.
• How decisions are made.
• What support is available.
• What success looks like.
• Where they fit into the future of the company.

This is exactly where outplacement support can strengthen the employer’s reputation. Employees who leave with dignity become ambassadors rather than critics, while those who remain can clearly see that the organisation genuinely lives its core values, treating exiting employees with consideration and care.

That has immeasurable business value. Organisations that invest in compassionate transitions often protect the employer brand, preserve internal trust, and reduce voluntary turnover following a restructure.

At Careerminds, we boast a 99% client retention rate, witnessing first-hand that organisations which treat culture and people as central to change, and not as an afterthought, achieve better long-term outcomes.

No one culture change framework guarantees success, but several established models can provide a useful structure, when combined with strong leadership and the full involvement of employees. But while these models provide direction, they don’t replace human judgement.

• Kotter’s 8-Step Change Model

John Kotter developed one of the best-known approaches to organisational transformation. His model focuses on:

• Creating urgency.
• Building a guiding coalition.
• Developing a clear vision.
• Communicating consistently.
• Removing barriers.
• Delivering quick wins.
• Sustaining momentum.
• Embedding change into culture.

The last step is particularly significant, as many organisations celebrate success when new systems are introduced, but culture only changes when new behaviours become the norm.

• The McKinsey 7-S Framework

Developed by consultants at McKinsey & Company, this model recognises that culture interacts with every aspect of organisational performance. Rather than focusing just on people, it examines alignment across strategy, structure, systems, shared values, style, staff, and skills.  When these elements co-exist, the culture becomes easier to maintain.

• Schein’s Three-Level Model

Edgar Schein’s model suggests that organisational culture exists at 3 levels – visible artefacts, such as the office layout, dress code, and rituals, values, which are the principles an organisation says it upholds, and underlying assumptions, which are the deeply held beliefs that shape behaviour. To achieve a successful culture change, all 3 levels must be addressed. Lasting change only occurs when everyday behaviours, leadership decisions, and systems reinforce the culture that the business wants to project, helping build trust, instead of scepticism, during periods of change. 

Successful organisational culture change doesn’t work with just one single initiative. It happens through 100s of decisions that reinforce the behaviours over time. While every business is different, the most successful programmes tend to follow the same broad stages.

Culture should never be changed just for the sake of it. Employees are far more likely to support change if they realise that there is a commercial or strategic need behind it.

For example, your organisation may need to:

• Improve the customer experience.
• Integrate following a merger or acquisition.
• Adopt new technology or AI.
• Improve employee retention.
• Strengthen innovation.
• Support business growth.
• Increase collaboration across teams.

Many organisations publish values such as integrity, innovation or respect, but these values mean different things to different people. Instead, define observable behaviours.

For example:

Value	Behaviour
Collaboration	Teams involve colleagues early rather than working in silos.
Accountability	Managers give timely feedback instead of avoiding difficult conversations.
Innovation	Employees are encouraged to test out new ideas without fear of being blamed if something goes wrong or doesn’t work straightaway.

When behaviours are specific, they are easier to recruit for, develop, and reward.

Employees may hear organisational messages from the CEO, but they experience culture through their Line Manager. If managers aren’t confident in explaining any changes, handling difficult conversations, or addressing uncertainty, the culture change will become inconsistent. Providing practical support will help, such as communication toolkits, coaching opportunities, scenario planning, and regular leadership briefings. This consistency across management teams will build credibility.

Silence leads to rumours, and one of the biggest mistakes organisations make is communicating with staff only once decisions have been made. Including regular updates will address this issue, as staff generally cope better with uncertainty rather than a lack of information. So explain what has and hasn’t changed, what decisions are still being made, when they are likely to hear more, and when questions can be raised. The advice to employers from Acas is to give employees the opportunity to ask questions and raise concerns before changes are finalised, as this approach will increase trust and help leaders identify issues before they become bigger problems. 

Culture changes when reward systems change, so if promotions, bonuses, and recognition continue to favour old behaviours, employees will conclude that nothing has really changed.

Review if your organisation recognises people who:

• Collaborate across departments.
• Mentor colleagues.
• Embrace continuous learning.
• Share knowledge.
• Demonstrate inclusive leadership.
• Contribute to customer outcomes rather than individual targets.

People pay close attention to who succeeds in a company, with these examples often speaking louder than any values statement.

It’s clear that culture change and retention go hand-in-hand. The organisations that keep their top talent don’t avoid change; they just lead it well. As your next transformation begins, ask yourself this before launching the project: will your employees remember the change itself, or the way your leaders made them feel throughout it?

If your organisation is going through a change and looking to retain staff, reach out to us at the earliest opportunity to find out more.