The importance of cultural change management for companies

As a technology enthusiast in business transformation processes, Lívia Brandini, Founder and CEO of Kultua, spoke with Intelligent CIO Latin America about the challenges facing Brazil and highlighted the sectors that demand greater agility in terms of cultural change processes.

Diagnosing the dynamics and culture of a company to create a more collaborative, diverse and productive environment is the foundation of Kultua, a pioneer PeopleTech, a company aimed to solve problems in the Human Resources sector in personalized and in-depth culture diagnostics for companies and their partner consultancies.

Innovations in research application, data collection, analysis and change management in 2022 resulted in a 358% increase in Kultua revenue compared to 2021.

This rapid growth indicates that business decision-makers, CEOs and business owners are increasingly paying attention to change management and understanding the actual culture within their companies. However, there are still gaps to fill.

According to a survey by Tata Consultancy Services, a global IT services company, only 5% of data investments go to Human Resources (HR) and People Analytics, despite being a high priority for 70% of companies in the Americas.

As a technology enthusiast in business transformation processes, Lívia Brandini, Founder and CEO, Kultua, spoke with Intelligent CIO Latin America about the challenges of PeopleTech in Brazil and explained the sectors that demand greater agility in cultural change processes.

The CEO, with over eight years of experience in project management and consultancy in many industrial services segments of German multinationals, affirmed that the world, mindsets and expectations of work and business have changed.

How did the idea of founding Kultua come about?

I have a background in mechanical engineering, but I spent a long time in the manufacturing industry working for German multinational companies on the factory floor, focusing on production engineering, process optimization and change management in organizations to increase performance and business results.

From the beginning of my career, I considered myself an agent of organizational transformation and was enthusiastic about digital, cultural and innovative changes.

Throughout my corporate journey, I have seen many issues related to the lack of effective cultural management and clarity about cultural barriers as breaks to change in organizations. With this in mind, I realized that the HR area of companies was still under-prioritized, not very strategic and lacked data-driven decisions regarding leadership, the actual culture in place and employee experiences.

After years of working on continuous improvement in my former company, I clearly identified values and cultural patterns that no longer aligned with my vision and purpose. I realized I no longer felt a sense of belonging and inspiration to stay. Therefore, I decided to make a career transition.

This transition lasted almost two years because I was not sure if I was ready to start a business or what area I would focus on. Several factors came together, and I had absolute certainty when the most opportune moment arrived. Starting a company in Brazil requires courage, a lot of responsibility, focus and resilience.

In this movement, I participated in three crucial accelerations in my journey as an entrepreneur. In these opportunities, I had contact with methodologies, experimental errors and learnings that consolidated the path in building Kultua’s current solutions.

How have cultural change indicators in companies changed with the COVID-19 pandemic, and what factors currently impact organizational culture?

The COVID-19 pandemic and its immediate impacts on companies and their HR departments highlighted leadership challenges and cultural barriers that previously used to have little priority.

With a physical distance between teams and leaders, psychological health was affected, and the effects of the rapid adoption of remote work, there was a significant increase in demand for understanding how people were feeling, adapting, co-operating and producing this new reality. This emergent need for answers and quick actions led many companies to seek People Analytics collection tools.

In fact, before the pandemic, there were rare global platforms that already made in-depth, customized metrics to map culture and raise relational People Analytics (from the perception of frequent practices and behaviors in the organization) with as little bias as possible.

Until then, survey models were much more objective and had rigid and standardized structures with questions and answers – which guaranteed the scalability of quantitative methods.

After the pandemic and with advances in Artificial Intelligence (AI) and Natural Language Processing (NLP), this way of collecting data could become less biased and more flexible and allowed for the collection and treatment of subjective and spontaneous open responses from employees.

These were some of the main innovations offered to the market by Kultua: Semantic analysis with results delivery up to six times faster and more representative than traditional culture consulting firms, which take three to six months to deliver results with high resource allocation and consequently less accessible prices.

How does Kultua use technological variables – such as AI Data Analysis – to gain insights into the need for cultural change in an organization?

At Kultua, NLP processes have been part of our product since its inception and continue to improve with the cultural change journey of the organizations we serve. We are developing an AI algorithm focused on customizable People Analytics and NLP of employees who agree to anonymously contribute their views, perceptions and personal data to culture and organizational change management surveys.

With the launch of ChatGPT, we are refining our intelligence dictionary for some queries and validations of types of sentiment for some survey questions. Despite relying on external databases, we differentiate ourselves with a proprietary data modeling approach that draws from Kultua’s extensive history. Our focus is on ensuring the accuracy and effectiveness of our AI model rather than just using AI or external databases.

We use a proprietary qualitative-quantitative method in our periodic culture and change management surveys, including open and comprehensive questions based on employee opinions and experiences. It reduces research biases and categorizes their responses by sentiment type and key themes that spontaneously emerge without inductions or research biases.

This way, we can map out in-depth several dimensions of the company, such as the actual culture installed in the organization, the current relationship of employees with the company, the most admired characteristics in the work culture, the best practices to be maintained and the critical behavior patterns to be addressed.

Which sectors demand greater agility in the change process?

The sectors that demand greater agility in the change process are the ones that have not modernized, either technologically or in terms of management mindset. If these industries have not yet experienced disruption due to innovation, they certainly will soon. The companies that do not adapt quickly in adopting or launching new digital products will be the most impacted and threatened by the competition.

The world, mindsets and expectations regarding work and companies have changed. Often, leading and dealing with the new way in companies and management that have not reinvented themselves has not progressed at the same pace as technological leaps and new, more effective digital resources.

However, scale-ups and innovative companies also highly value and demand data-driven decision-making and as they grow exponentially, they face crucial organizational issues to be solved. Some of them are structural problems of systems and processes, as well as the emergence of subcultures and silos, a tendency towards declines in engagement, productivity and employee affiliation sentiment.

In general, market sectors with a more innovative or early-adopter profile of digital services or products have experienced experimentation, mistakes and successes more quickly in their journey to adapt to new ways of working, such as IT, finance, LogTechs, as well as startups, scale-ups and other pioneers in their segments.

How can this experience and knowledge in PeopleTech be leveraged for other areas and needs of the company?

Kultua’s culture and change management surveys capture not only indicators, strengths and critical points of People Management. But also diverse aspects of processes, the impact of customized initiatives for each client, operational excellence insights, ESG, internal marketing, leadership profile, strategy and overall organizational results.

The same technology and research method used for internal analysis in companies can also be directed to the experience and feedback from customers, community, partners and other stakeholders such as investors and shareholders – considering the proper adjustments in the research approach to the different audiences.