Culture is the missing puzzle piece of successful transformation.

Many medium-sized companies start their transformation with technical solutions, such as energy-efficient systems, circular models or professional ESG data management. All of these are important building blocks. But real progress only happens when people understand the change, support it and actively shape it.

A strong, shared culture is not a side program, but the core of successful transformation: it creates orientation, purpose and enables change in the first place.

Or, as a managing director recently put it to me: “We can start as many projects as we like – if the team doesn’t play along, we won’t win a single game.”

Many entrepreneurs experience exactly this: concepts exist, processes are defined – but in day-to-day business the impact fizzles out. Targets are announced but not internalized. Investments are made but remain without measurable effect. In short: transformation is a team sport – and everyone on the team must know the rules of the game in order to understand how they contribute to success.

Culture, cohesion, skills and willingness to learn are now just as crucial as investments in technology or regulatory expertise. And this is precisely where education as an enabler comes in: through broadly accessible learning for all target groups, role-specific deep dives and strong leadership that provides orientation.

Ignoring culture is a strategic risk – and expensive.

When transformation is viewed primarily as a technical issue, people are left out – often with tangible consequences:

• Fatigue in the team: projects are perceived as a burden rather than an opportunity.
• Talent leaves: purpose and future perspective are missing in everyday work.
• Measures come to nothing: without ownership, without impact.
• Credibility risks arise: external statements do not match the internal experience.
• Competitive advantages are lost: customers and partners expect a stance – and consistency.

What Defines a Strong ESG Culture?

You can recognize a strong ESG culture by the fact that sustainability is not an add-on project, but shapes everyday decisions: how communication takes place; how resources and equipment are used; how purchasing and production are handled; how teams collaborate – and much more.

This “how” emerges when employees know:

• why the company (or market environment) is changing,
• where they can have a concrete impact themselves,
• and how successes become visible.

Only when mindset, knowledge and tangible results come together does a culture emerge that supports change – instead of rejecting and slowing it down. This creates an environment in which resistance decreases and motivation visibly increases.

For this to succeed, different roles need different skills – in their language, at their pace, and related to their reality. Each role asks different questions and needs different answers, from trainees to top management:

• In HR, organizational development, strategy and leadership, the focus is on providing orientation, strengthening competencies, enabling innovation and shaping the future together.
• In sales, field service and marketing, the focus is on customer contact: communicating transparently and credibly, answering questions confidently, showing a stance instead of selling promises.
• In purchasing, logistics, IT, controlling and compliance, robust decisions count: sourcing responsibly, optimizing routes, maintaining data, correctly implementing requirements and making impact measurable.
• In production, workshops and on construction sites, the aim is to implement processes safely and efficiently, reduce material wear, avoid scrap and use solutions that work in the field and do not slow things down.
• And for employees in shift work (or seasonal work), change must work easily – without additional effort – while top management ensures that ESG strengthens competitiveness and the entire workforce stands united behind the goal.

Strategy + Culture = Implementation Success

Even the best strategy fizzles out if it is not lived in everyday life. A strong culture, on the other hand, ensures that plans turn into real results:

• Clear values and consistent action against discrimination and assaults create safety and trust for everyone.
• Open and respectful communication reduces friction, misunderstandings and conflict costs.
• Healthy working conditions and appreciative interaction noticeably reduce sickness-related absences.
• Employer attractiveness increases, talent stays – and new skilled workers consciously choose the company.
• Ideas and innovations emerge across the company, not just in management.
• Efficiency gains arise in day-to-day work through informed decisions, fewer errors, less rework and faster coordination.
• Teams become more resilient, especially in challenging times.

You can see: culture determines whether transformation creates value – or produces costs.

The Four Most Powerful Levers for Cultural Change in SMEs

Many medium-sized companies have clear strengths such as short decision-making paths, direct communication and high practical orientation. This allows them to drive cultural developments faster and more effectively than, for example, international corporations.

Four key levers help to move culture in a tangible way:

1. Clear and consistent communication: What is our goal? Why is it important? And what changes concretely for me? The more understandable and tangible, the more participation becomes possible.
2. Participation instead of instruction: Knowledge and experience sit within the team. Those who seriously involve employees receive better solutions and stronger commitment in implementation.
3. Building competencies in a targeted way: Education is the engine of cultural change. Only those who understand can help shape. Learning provides security and orientation.
4. Making progress tangible: Successes should be made visible and celebrated – whether in cost reduction, safety or quality. This creates momentum and increases motivation to keep going.

A Pragmatic Plan for Getting Started

Many medium-sized companies know that transformation is necessary – but not where and how to start meaningfully. The key here is: start small, make impact visible, gradually increase the pace. Instead of oversized projects, we recommend clear, well-manageable steps that show impact and build trust.

The following stages have proven effective:

Stage 1 – Initiate: Spark Curiosity, Foster Understanding, Provide Security, Build Trust & Enable Participation

• Provide orientation: a short, well-designed ESG intro for everyone (e.g. kick-off or town hall meeting).
• Highlight early successes: identify and showcase 2–3 quick wins in day-to-day work.
• Involve ideas: set up a simple idea box – analog or digital – and appreciate suggestions.
• Communicate regularly: brief updates in teams or from management: “Where do we stand? What has improved?”

Result: people understand the path – and walk it with you.

Stage 2 – Build: Establish Structures and Responsibilities

• Set priorities per area: where and how does impact emerge quickly? Purchasing? Production? Sales?
• Enable leaders: workshops, training, coaching and supervision on how they lead ESG in day-to-day business.
• Make progress visible and acknowledge it: “Which team has achieved what? What did it deliver?”
• Create ownership: assign small responsibility roles or ambassadors.

Result: ESG becomes part of daily work.

Stage 3 – Anchor: Professionalism and Continuity

• Develop role-specific learning paths: as e-learning or blended learning including live training (e.g. implementable via the Terra Academy).
• Anchor ESG in HR processes: objectives, job profiles, feedback, onboarding.
• Measure progress: engagement, implementation, contribution to innovation.
• Stay on it: impulses, success stories, formats for exchange.

Result: ESG becomes a lived culture – stable and credible in the long term.

Conclusion: Culture Is the Operating System of Transformation

People make the difference – not technology. Technologies optimize processes, strategies provide direction. But transformation only succeeds when employees understand the change, know their contribution and experience its benefits.

Companies that focus on participation, competence building and clear communication experience:

• faster implementation,
• better decisions,
• more safety & efficiency,
• lower turnover & error costs,
• stronger employer attractiveness,
• and visible impact in the market.

Culture is not a soft topic – it is a business lever with a direct ROI. The necessary investments are comparatively small: broadly accessible learning, targeted workshops, training and coaching, as well as active leadership and formats that make successes visible.

What you get in return is massive: more stability, more innovative strength, more competitiveness.

No transformation without people. And no successful transformation without culture.

Further Article

Basis article: ESG as a success factor

Kim Y. Mühl

Kim is passionate about sharing knowledge. As an author, lecturer, keynote speaker and trainer, he has been working for years on topics such as bionics, digitalization, finance, sustainability, purpose and strategy. In addition, the former Head of Research & Business Development Europe of a global financial technology service provider brings extensive experience in process and project work as well as in team leadership.

Today, as Senior Learning Consultant with the Terra Academy, he supports companies and the people within them on their path towards a sustainable economy and working world.

Questions? Feel free to reach out by email (k.muehl@terra-institute.eu).