The Side Effects of Culture Change: How to Anticipate and Manage Them

When a company transitions to a new culture, everyone, from those who are leading the change to those who are experiencing it, can have complex responses. Some are positive — and some are bad enough that they threaten the likelihood of the change’s success. It’s a leader’s role to manage those responses, including his or her own.

Greg Shea, Wharton adjunct professor of management and longstanding leader of Wharton Executive Education’s Leading Organizational Change, says years of research indicate that there are four major side effects of cultural transformation. Shea, who studied this phenomenon with coauthors Mike Useem and Tom Gilmore, stresses that when leaders anticipate and plan for them, their negative consequences can be overcome.

“The first is ambivalent authority,” he says. “Most culture change involves a push for empowerment, entrepreneurship, and teamwork. The old, more hierarchical culture is viewed as bad, and its legitimacy is attacked. But as the old ways get ‘unlearned,’ the new ways aren’t mastered yet. This tends to make employees feel insecure, so they fall back on the old ways.”

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