How Companies Navigate Change Without Losing Identity

Changing an organization’s culture is not easy. Culture is built over time through shared values, behaviors, and experiences. When a company needs to change, whether due to growth, a crisis, or new leadership, its culture must often change too. But if this isn’t done carefully, it can create confusion, resistance, or even failure (Kotter, 2012).

This article explores how companies can successfully transform their culture while staying true to their identity. We’ll use Lewin’s Change Management Model and real-life examples like Microsoft under Satya Nadella to explain how cultural change works in the real world.

Why Do Organizations Change Their Culture?

Organizational culture change is usually driven by:

• New leadership
• Mergers or acquisitions
• Rapid growth or decline
• Digital transformation or innovation
• Shifting market demands or global expansion (Cameron & Quinn, 2011)

A strong, adaptable culture helps companies survive and grow. But when the existing culture holds back progress, like resisting innovation or excluding diverse voices, change becomes necessary (Schein, 2010).

Example: Microsoft’s old culture was known for internal competition and secrecy. But under Satya Nadella, the company shifted to a collaborative and growth-focused culture, helping it become one of the most valuable companies in the world (Sharma & Grant, 2020).

Lewin’s 3-Step Model: A Simple Way to Understand Cultural Change

Kurt Lewin (1947) suggested that cultural change follows three key steps:

1. Unfreeze – Getting ready for change

This stage involves helping employees understand why change is needed. It means challenging old habits and making people aware of the problems with the current culture (Burnes, 2004).

2. Change – Moving to a new way

In this stage, new values, behaviors, and processes are introduced. Employees begin to experiment with and adopt new ways of working (Cummings & Worley, 2015).

3. Refreeze – Making the change stick

Here, the new culture becomes part of everyday life. New habits are rewarded, and the organization updates policies, structures, and leadership styles to support the change (Kotter, 2012).

Microsoft’s Cultural Transformation

When Satya Nadella became CEO of Microsoft in 2014, the company had a culture of internal rivalry and fear of failure. It was falling behind competitors like Google and Apple (Mehta, 2019).

Nadella introduced a new culture based on:

• A growth mindset – Encouraging learning from mistakes (Dweck, 2006)
• Empathy and collaboration – Breaking silos and promoting teamwork
• Customer obsession – Putting customer needs first

He applied Lewin’s model:

• Unfreeze: Publicly admitted the old culture wasn’t working.
• Change: Updated leadership styles, introduced new values, and promoted inclusivity.
• Refreeze: Embedded new practices through training and performance management (Sharma & Grant, 2020).

Today, Microsoft is seen as a model for successful cultural transformation.

What Makes Culture Change Succeed or Fail?

Success Factors:

• Strong leadership support (Kotter, 2012)
• Clear communication about the purpose and benefits of change (Armenakis & Harris, 2009)
• Employee involvement in shaping the new culture (Cameron & Quinn, 2011)
• Alignment between culture and business goals (Denison & Mishra, 1995)
• Patience and consistency – Culture change takes time (Schein, 2010)

Failure Factors:

• Lack of vision or leadership
• Employee resistance due to fear or confusion
• Poor communication or mixed messages
• Failure to align rewards and systems with new culture

Example: Yahoo attempted several cultural changes in the 2010s but lacked clear direction and consistent leadership, leading to low morale and eventual sale to Verizon (Zenger, 2016).

How to Maintain Identity During Change

Changing culture doesn’t mean changing everything. Companies should hold on to:

• Core values that define their purpose
• Positive traditions that employees are proud of
• Mission and vision that guide long-term goals

Example: LEGO modernized its approach to digital transformation while keeping its commitment to creativity and child-focused learning (Robertson & Breen, 2013).

Conclusion

Cultural change is challenging, but necessary for growth and survival. Using models like Lewin’s 3-step approach, companies can guide employees through change while keeping their identity intact. As seen with Microsoft and LEGO, thoughtful cultural transformation can create more engaged teams, better performance, and long-term success.

When done right, cultural change isn’t just about surviving, it’s about thriving in a new world.

References

• Armenakis, A.A. & Harris, S.G. (2009). ‘Reflections: Our Journey in Organizational Change Research and Practice’, Journal of Change Management, 9(2), pp. 127–142.
• Burnes, B. (2004). ‘Kurt Lewin and the Planned Approach to Change: A Re‐appraisal’, Journal of Management Studies, 41(6), pp. 977–1002.
• Cameron, K.S. & Quinn, R.E. (2011). Diagnosing and Changing Organizational Culture: Based on the Competing Values Framework. 3rd edition. San Francisco: Jossey-Bass.
• Cummings, T.G. & Worley, C.G. (2015). Organization Development and Change. 10th edition. Stamford: Cengage Learning.
• Denison, D.R. & Mishra, A.K. (1995). ‘Toward a Theory of Organizational Culture and Effectiveness’, Organization Science, 6(2), pp. 204–223.
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• Kotter, J.P. (2012). Leading Change. Boston: Harvard Business Review Press.
• Lewin, K. (1947). ‘Frontiers in group dynamics’, Human Relations, 1(1), pp. 5–41.
• Mehta, S. (2019). The Everything Store: Jeff Bezos and the Age of Amazon. London: Random House Business.
• Robertson, D. & Breen, B. (2013). Brick by Brick: How LEGO Rewrote the Rules of Innovation and Conquered the Global Toy Industry. London: Random House.
• Schein, E.H. (2010). Organizational Culture and Leadership. 4th edition. San Francisco: Jossey-Bass.
• Sharma, R. & Grant, D. (2020). ‘From hierarchy to culture of collaboration: A case study of Microsoft’, Journal of Organizational Change Management, 33(4), pp. 681–699.
• Zenger, T.R. (2016). ‘Yahoo’s Failed Turnaround Shows the Company Needed a Different Kind of CEO’, Harvard Business Review, [online] Available at: https://hbr.org [Accessed 28 Mar. 2025].