Culture Transformation: 7 Steps to Change That Sticks

Changing a company’s culture isn’t that different from trying to change a habit. You can talk about it all you want, but unless you build real systems — and stick with them — things snap back to the old way.

It’s the same inside teams and companies. Just as digital transformation is about more than a big speech, a rebrand, or a set of values printed on the wall, culture transformation is about shifting how people actually think, collaborate, and make decisions. And it doesn’t happen by accident.

In this guide, we'll walk through what company culture transformation really means. We’ll see why it matters for product-led companies, who’s responsible for making it happen, and the practical steps to lead real, lasting change — without getting stuck in endless "initiative fatigue.”

Top Tier Consulting at Product School

Our experienced team brings real-world lessons learned at top companies, providing guidance, fractional leadership, and training to transform organizations.

Learn more

What Is Organizational Culture Transformation?

Organizational culture transformation is the process of intentionally shifting the shared beliefs, behaviors, and ways of working inside a company. It’s about changing not just what people say the culture is — but how they actually operate on a day-to-day basis.

Now, imagine a company or a product team like a sports team. If a new coach steps in, they might talk about playing faster, being more aggressive, or working better as a unit. But unless the team actually changes how they train, nothing really transforms. The "culture" stays the same and so do the results.

Organizational culture works the same way. It’s not what’s written on a product vision or shared in a product strategy. It’s what people actually do when no one’s watching. It shows up in how decisions get made, how people handle conflict, how teams rally during product launches, and how product leadership responds when things go wrong.

Cultural transformation is the effort to shift these core habits. It touches real systems, leadership actions, and daily behaviors that drive cultural change.

Done right, culture transformation sets the foundation for better collaboration, faster learning, and smarter execution — especially inside product-led companies where speed, ownership, and adaptability are critical.

What Are the Benefits of Culture Transformation?

When culture transformation is done right, it doesn't just make the company "feel" better — it directly impacts performance, innovation, and long-term growth.

Here are some of the key benefits product-led companies see when they invest in real cultural change:

• Stronger alignment across teams
  Clear cultural values help product team, product design, engineering, and business teams work toward the same goals without constant hand-holding or miscommunication.

• Faster decision-making and better team effectivenessWhen the culture rewards ownership and trust, teams can move faster without needing layers of approvals or second-guessing.

• Higher employee engagement and retention
  People are more likely to stay — and do their best work — when they feel connected to a culture that matches their values and aspirations.

• More resilient product innovation cycles
  A healthy culture encourages experimentation, tolerates smart failure, and supports teams through pivots — critical ingredients for strong product development.

• Better customer focus
  When internal culture promotes empathy, collaboration, and continuous learning, it naturally sharpens how teams think about real user needs.

• Reduced burnout and healthier growth
  Moving away from toxic hero culture or endless firefighting leads to more sustainable organizational performance — not just short bursts of overwork followed by turnover.

• Stronger reputation in the market
  Companies known for strong, healthy cultures often attract better talent, more loyal customers, and long-term partnerships that value more than just short-term wins.

Who Is Responsible for Culture Transformation?

The short answer is: everyone. The real answer is: not everyone equally, nor in the same way.

Culture transformation touches every person in an organization, but it’s shaped most heavily by a few key forces. Those include leadership decisions, team behaviors, and the hidden structures underneath how work gets done. The roles that bear most responsibility shift depending on the size and structure of the product team.

In smaller companies or startups, culture transformation usually falls squarely on the shoulders of the founding team or top leadership. In tight, fast-moving environments, leadership is culture. People take their cues directly from how founders act, what they prioritize, and what they reward (or quietly tolerate).

In mid-sized and larger organizations, culture becomes harder to steer top-down. Responsibility spreads across multiple layers — executive teams, product leadership, people managers, and influential "culture carriers" within teams. Without buy-in across those layers, transformation stalls. It's not enough for executives to declare a "new culture" if directors, Senior PMs, and team leads don't model it every day.

And this is where real-world challenges creep in:

• Misaligned leadership styles: Different executives may unintentionally model conflicting behaviors. One Product Lead promotes transparency; another avoids hard conversations. Teams get stuck between the gaps.

• Middle management bottlenecks: Even when executives genuinely want change, if middle managers are overloaded, skeptical, or left out of the transformation process, they become an invisible wall blocking new behaviors.

• The frozen middle: In larger organizations, middle layers sometimes slow or resist cultural change. This is not because they’re malicious, but because change feels risky when they’re squeezed between frontline pressures and top-down mandates.

• People’s survival instincts: In any Product-led Organization, culture is tied to how people protect their jobs, navigate politics, and manage uncertainty. If the transformation threatens how people see their value, resistance is inevitable unless the process addresses real fears and incentives.

Culture doesn't transform just because someone "owns" it on an organizational chart. It changes when leadership consistently models new behaviors. Systems (like promotion criteria, feedback loops, and recognition structures) need to align with the new culture. It’s also important that teams have the space and safety to actually live into the shift.

If you’re in the middle of a cultural change or even Agile transformation right now and it feels frustratingly slow or stuck, that’s normal. 

Real transformation moves at the speed of trust. It’s messy, human, political, and nonlinear. But, with the right structure and sustained leadership, it can reshape everything from team morale to product outcomes.

How to Lead a Successful Culture Transformation

Culture doesn’t change because of one big announcement or a product leadership offsite. It shifts step by step, through real actions that reshape daily work and team behavior over time.

1. Get really honest about where you are today

Before you can talk about where you’re going, you need a clear, uncomfortable picture of where you are. Common sense, right? 

Well, this is the part most companies rush — and it's the reason many transformations fail before they start.

You can’t fix what you won't face. Culture is about how people behave when they’re under pressure, when priorities conflict, and when nobody’s watching. You need to observe this. 

Here’s how to make a real diagnosis:

• Talk to people at every level: Not just Heads of Product. Sit down with Product Owners, PMs, designers, and engineers. Hear about the real trade-offs they face, the real frustrations they carry, and the patterns they've come to expect.

• Look at moments of friction: Where do product launch strategies or product discoveries get stuck? Where do handoffs between teams fall apart? Where do decisions stall or disappear into endless loops? These moments reveal the culture more honestly than any values statement.

• Review exits and retention patterns: Who is leaving — and why? Are high performers quietly burning out? Are specific teams or leaders struggling to keep people engaged? Turnover tells you more about culture than a dozen engagement surveys.

• Name the contradictions: Where does what you say you value not match what you actually reward? For example, a company might say it values iterative testing, but punish teams when prototypes or MVPs fail. These gaps are the roots of cultural problems.

“If you need a starting place, encourage people to be fearless. So not worrying about taking risks, being okay going into new areas and seeing what happens, and having accommodation for trying new things.”

— Nick Caldwell, CPO at Peloton, on The Product Podcast

The key at this stage is humility. No defensive explanations. No sugarcoating. The point isn’t to blame. The point is to understand. Only once you map the real terrain can you chart a path through it.

2. Align leadership around one real, living vision

Culture transformation dies fast when leadership isn’t fully aligned. If executives, department heads, and team leads aren't sending the same signals — even subtly — people notice. When they notice, they stop trusting the change.

This isn’t about everyone memorizing the product vision. It’s about leadership showing, every day, what the new culture looks like through actions, not just words.

Here’s how to build real alignment:

• Get leadership in a room — and surface hard truths: No vague agreements. Force the real conversations: What behaviors are we rewarding today that have to change? What tensions are we willing to live with? What trade-offs are non-negotiable?

• Define clear behavior standards, not just values: It’s easy to say you value "cross-functional collaboration" or "ownership mindset." But what does that actually look like on a Tuesday afternoon when a project is late? Align on visible, repeatable actions.

• Address leadership misalignments directly: If one leader protects silos while another pushes for cross-functional work, that tension will break teams. These contradictions have to be named and resolved before any wider transformation can stick.

• Commit publicly and privately: It's easy for leaders to nod in meetings and then act differently when pressure hits. True alignment means agreeing to be accountable — both when things are easy and when it costs political capital.

In Product-led Organizations especially, leadership behavior cascades fast. If leaders embody the change — in meetings, in feedback, in priority setting, teams will start to believe it's real. If leaders don't, no amount of messaging will save any type of enterprise digital transformation.

3. Design systems that reinforce the new culture

Culture doesn't stick because people remember a speech. It sticks because the systems around them make the new way easier and the old way harder.

If your hiring, promotions, recognition, and feedback systems reward old behaviors, people will stick to the old culture. If you want a real transformation, you have to rebuild the structures that shape daily choices.

Here’s how to start shifting systems:

• Audit the systems already in place: Look at how people get promoted, who gets the best projects, and what behavior is rewarded or tolerated. Do these systems push people toward the culture you want or pull them back into old habits?

• Redesign incentives carefully: If you want more collaboration in your product culture, but still reward only individual achievement, you're setting people up to fail. Align incentives — public praise, bonuses, promotions — with the new cultural behaviors you’re trying to embed.

• Embed culture in hiring and onboarding: Culture change won’t survive if new hires are brought in under the old assumptions. Update interview questions, evaluation criteria, and onboarding programs to reflect the real behaviors you expect.

• Rethink rituals and meeting cadences: Regular touchpoints like standups, demos, and retros, are opportunities to reinforce culture. Use them intentionally. Don't let them become automatic box-ticking exercises that ignore the new ways of working.

Systems outlast speeches. They shape behavior long after the initial momentum fades. 

In product-led companies, where team effectiveness and ownership matter, reinforcing the right behaviors through systems is the difference between a real transformation.

Over-communicate early wins and real progress

Cultural transformation is slow. It's invisible at first. And if teams don’t see proof that things are changing, they’ll quietly assume nothing is and tune out.

That’s why one of the smartest moves you can make is to aggressively spotlight real, small wins early and often. People need proof that all the effort is moving the company somewhere better.

Here’s how to make progress visible:

• Celebrate behavior, not just outcomes: If a team takes a smart risk that aligns with the new culture — even if the result isn't perfect — shine a light on it. Show that the behavior itself is what matters, not just key product metrics or a North Star.

• Tell real stories, not corporate slogans: Highlight moments where someone challenged old ways of thinking, where teams handled failure differently, and where new rituals created better cross-functional collaboration. Make the change human and relatable.

• Update often and in multiple formats: Slack channels, all-hands meetings, team newsletters — whatever fits your company's rhythm. Repetition matters. People need to hear and see the same cultural signals reinforced over time.

• Let teams own the narrative: Encourage teams to share their own examples of change, too. Bottom-up storytelling is more believable than top-down messaging alone.

Progress isn’t just a KPI, it’s emotional fuel. People need to feel the shift to keep pushing when things get messy. 

5. Empower middle managers and frontline leaders

Middle managers are often called "the frozen middle" for a reason. 

They’re the ones caught between ambitious leadership visions and the gritty realities of day-to-day grind. And if they aren't fully bought in, or fully equipped, culture transformation will quietly stall right there.

Here's the hard truth: middle managers, like Senior PMs, Product Leads, or Product Marketing Managers, are either the greatest accelerators of culture change, or its biggest blockers. You can’t just "tell" them to lead differently. You have to give them the tools, the air cover, and the support to actually do it. Empowered product teams are free to make their own decisions within their unique structure. 

Here’s how to empower them the right way:

• Bring them in early, not last: Too many transformations are designed by executives and rolled out to managers like a set of marching orders. Involve managers in shaping how the new culture will actually show up inside product teams. If they help build it, they’ll help own it.

• Train for real behavior: Don’t just hand them slides about "leading through change." Teach them how to have hard conversations, how to model new decision-making, how to coach teams through uncertainty.

• Give them real authority and protection: If you expect managers to model new behaviors but still punish them based on old metrics (like pure output over collaboration), you're setting them up to fail. Align their product goals and incentives with the culture you're trying to build.

• Create a peer support system: Middle managers are stronger together. Set up forums, check-ins, or coaching circles where they can share wins, frustrations, and ideas. Transformation is lonely work without a crew to lean on.

Middle managers are your culture carriers. If they believe the change is real and they feel supported to lead it teams will follow. If they’re skeptical, exhausted, or stuck defending old systems, no amount of executive enthusiasm will save the effort.

6. Build feedback loops and be ready to adapt

Culture transformation is a messy, ongoing process — and if you don’t have real feedback loops built in, you’ll fly blind.

Without feedback, product leadership thinks things are fine while frustration brews underneath. Without feedback, teams think nothing is changing even when real progress is happening. Without feedback, old behaviors creep back in without anyone noticing until it's too late.

If you want the transformation to last, you need to keep your ear to the ground. You need to be willing to adjust when reality doesn’t match the plan.

Here’s how to set up real feedback loops:

• Ask specific, behavior-focused questions: Instead of vague surveys like “How do you feel about the culture?”, ask, “Where do you see old behaviors still showing up?” or “What new habits are helping you work better?”

• Create safe, low-risk ways to speak up: If people think feedback will backfire, they’ll stay silent. Offer anonymous channels, small group discussions, and regular one-on-ones where honesty is rewarded, not punished.

• Show you’re listening and acting: Feedback is worse than useless if people feel like it disappears into a void. Close the loop. Share what you heard. Share what you’re changing because of it. Make responsiveness part of the culture itself.

• Expect and plan for course corrections: No transformation plan survives first contact with reality. Build in regular checkpoints (every quarter, not every year) to reassess what's working, what’s not, and where you need to adapt.

You don't get cultural transformation right once. You get it slightly better every cycle — by learning, adjusting, and never letting the old ways sneak quietly back in.

7 Challenges to Corporate Culture Transformation 

Even with the best intentions, many culture transformation efforts lose momentum because of subtle forces inside the organization. These forces aren't always obvious at first. Still,  they quietly shape how product teams respond to change.

Recognizing them early gives leaders a real advantage. Let’s see what those forces are.

1. Initiative fatigue

When teams have lived through a dozen "new ways of working" that never stuck, they stop believing the next one will be any different. Even genuine culture transformation efforts can get lumped in with all the others.

To overcome initiative fatigue, early wins matter. Great digital transformation leaders know people need to see and feel small but real changes — in how decisions are made, how recognition works, and how leaders behave — before they’ll buy into a bigger product vision.

2. Cultural inertia

In any organization, the way things have "always been done" creates invisible drag against change. It’s one of the challenges of digital transformation as well. Even when teams are excited about new ideas, old habits pull them back without anyone realizing it.

You need to do more than just introducing new behaviors. You should create enough structure, support, and repetition that old patterns eventually lose their grip.

3. Silent resignation

This isn't the buzzy trend of "quiet quitting." It’s a deeper, slower disengagement where talented people stay but gradually stop caring because they no longer believe any change is possible.

One of the first priorities of any culture transformation should be to rebuild trust. Teams need to see that this change is different and that product leadership is truly committed to doing the hard work alongside them.

4. Hero culture

In some companies, firefighting is celebrated. Last-minute saves, late-night coding sessions, and personal sacrifices get more praise than smart planning or cross-functional collaboration.

While hero culture looks exciting on the surface, it quietly erodes long-term organizational health. Culture transformation often means shifting recognition away from dramatic rescues and toward collaboration, organizational agility, and calm, steady organizational performance.

5. Change blindness

Sometimes leaders are moving the right pieces behind the scenes. However, if teams don’t see clear signals of change, they assume nothing is happening.

Culture transformation needs more than quiet operations. It needs clear storytelling: highlighting early shifts, celebrating teams that model the new culture, and making progress visible across the Product-led Organization.

6. Ritual decay

Daily standups, Agile retros, sprint planning — all these rituals are supposed to reinforce healthy habits. But over time, they can lose meaning and turn into lifeless formalities that people go through without real engagement.

Culture transformation is a good moment to rethink rituals. Which ones still serve the team? Which ones need refreshing, or retiring altogether? 

Keeping rituals aligned with real values keeps culture alive instead of stuck in autopilot.

7. Leadership echo chambers

Executives often hear filtered versions of reality. When leaders believe change is happening because they’re only hearing the success stories, they miss the deeper frustrations brewing across teams.

Real culture transformation requires breaking through that echo chamber. Leaders need to seek honest feedback directly, spend time with frontline teams, and make listening — not just messaging — part of the transformation effort.

Culture Transformation Is Hard, but It's Always Worth It

If you're in the middle of cultural transformation right now and it feels frustrating, slow, or thankless, you're not doing it wrong. You’re experiencing what you are supposed to experience. The hard part is the work.

Strong product teams build better ways of working. They create environments where people think clearly, challenge ideas without fear, take ownership, and stay focused on delivering value. That doesn’t happen by accident. It happens through culture, whether that’s intentional or not.

There’s no one-size-fits-all playbook. But if you stay honest about where you are, align your leadership, rebuild your systems, and keep listening — you will move forward. Maybe not fast. Maybe not in a straight line.

But in time, the shift becomes real. And the teams that emerge on the other side? Faster, sharper, more resilient — and a lot more fun to work in.

Healthcare Industry Report

Dive into the latest research about digital transformation in healthcare in this white paper from Product School. Spark ideas with 6 case studies and over 25 digital solutions from operations to pharmaceuticals to primary care and more.

Download report