People don't spend much time analyzing their company's culture, but it's usually the source of many recurring problems.

By culture, I mean the overall behavioral style of the company and the people in it. It's sometimes referred to as the "corporate disease" people catch when they begin working in an organization. It can be a good disease, like being results-oriented, or a bad disease, such as a widespread acceptance of mediocrity. Whether it's good or bad, it impacts your policies, procedures, operations, and the day-to-day actions of your employees.

A recent client, the CEO of a medium-sized manufacturing company, was frustrated because his employees wanted him to make every decision affecting the company. He wanted his managers to be proactive.

In examining the organization, I found a restrictive bureaucracy with far too many rules and procedures. It was a climate in which risk-taking and creativity were actually discouraged. When employees disagreed with management, they were penalized. People were afraid to rely on their own initiative, fearing the boss might not approve.

When the CEO understood the negative aspects of the culture he and his management team had unknowingly created, he took the first step in changing the company's culture for the better.

Negative aspects of corporate culture can have tremendous staying power, unless they're changed by a concerted effort on the part of the management and the employees. People adapt to their environment, become complacent, and rarely question the culture around them. We simply get used to it, and don't see how it may be affecting our business.

The key to changing an organization's culture is to analyze its current state and define which aspects you want to maintain, and which you want to change. Sit down with your management team and list the major strengths and weaknesses in your company. Openness and honesty are imperative. Unless you have someone within your organization who can obtain an honest perspective from each member of your team, you may need the help of an experienced outside facilitator.

Many of your company's strengths and weaknesses will relate to your organization's culture. For example, you may hear people addressing the balance between being proactive and reactive: "We're always putting out fires. We don't stretch ourselves to achieve our goals. Our goals are too short-term."

Comments might relate to the aspect of creativity: "People are not encouraged to try new things, even if they sometimes make mistakes. We don't readily adapt to change." Other comments may involve bureaucratic structure, conflict-resolution, or even the tenor of the jokes told around the water-cooler. All these issues involve an organization's culture, which is more subtle and difficult to change than, say, a manufacturing process or hiring procedure.

Organize your strengths and weaknesses into categories. For example, strengths might be: "We are creative. We are risk-takers." Weaknesses could be: "We don't communicate well. We don't respect everyone in the organization." Use these comments to write your Cultural Mission Statement. Define the kind of culture you want, and the changes you need to make, stated in a positive way.

For example: "We will continue to be creative and risk-taking, but will also try to communicate with and be respectful toward everyone in the company." Try to be concise and avoid being overly idealistic or impractical. The list should be realistic, but require some degree of challenge for your employees.

Keep in mind that your company's culture is largely created and sustained by its leaders. If you want to change the culture, the leaders have to change the ways things are done. I often discover that the way leaders make decisions is contrary to the way they want their organization to operate. They'll tell you they want their organization to be proactive, but they may be stuck in a reactive mode.

The next step is communication. Once you have agreed on the culture you want for your organization, you then need to explain to your employees the importance of the new culture, and the benefits it will bring to them and the company. You can do this through announcements, memos, ceremonies, logos, signs and training.

Keep your Cultural Mission Statement posted where everyone will see it. You need to get people involved in the discussion and practice of changing the corporate culture. Ask for specific feedback on what is and isn't being done to support the desired culture. Make it a company-wide effort. People need to understand and feel a part of the changing philosophy of the company.

The final step is practicing the new culture until it becomes your culture. The most important way to achieve this is through your daily actions what you say, what you do and what you reward. Your employees will be watching and listening to see if you and your company leaders really "walk the walk." You and your management team will have to take a critical look at your own behavior and make consistent changes to support the new culture.

The most effective way to change your organization's culture is by solving relevant problems in a way that demonstrates and reinforces the culture you want. Both the problems you choose to solve, and the way you solve them, are of utmost importance. Your solutions should always reflect the culture you desire.

Defining that culture and making it happen can be arduous, but remember: If you want your company to change for the better, you must start by changing the culture.

Gary M. Reuben is a chairman of The Executive Committee, a 40-year-old international organization of CEOs and company presidents, and is a Los Angeles-based business consultant.

For reprint and licensing requests for this article, CLICK HERE.