Does your organisation struggle to translate and implement its strategy? Perhaps your organisation aspires to be agile but cannot find traction? Perhaps you have a great plan but struggle with delivery?
If strategy means developing a plan that outlines the actions you will take to achieve a long term goal or vision then it is common sense to understand the risks that may threaten the achievement of said goals, aims or objectives. Management of risk is a long standing and robust concept and a comfortable part of business language.
What is less defined and understood is the role that corporate culture plays in implementing strategy and well laid out plans . When strategy fails it is usually because culture was not considered:
The organisation has not been deliberate in its thinking around the culture needed so relies on changing structures, processes and systems and does not spend equal time on attitudes (for example mindset) and behaviours (for example driven by values, principles, and/or competencies) that accompany working practices
There are a lack of metrics that enable meaningful measurement of change effectiveness
The ‘old stories’ of how it used to be continue to prevail without real action to address them – this is evident when new people are assimilated into the old stories
Projects involving change fail to systematically include an ‘organisation culture’ component, which begins by assessing the baseline culture of ‘as-is’ against the would be ‘target-state’ at multiple levels of the organisation.
Why is organisation culture so important?
Corporate culture can either ensure successful implementation of strategy or it can derail it. Corporate culture is a critical success factor and it should not be ignored.
Research indicates that corporate culture is a key factor to organisational success and if you’re tuned in, are defining and directing culture, it can provide a real competitive edge. Culture can be deliberate or organic; based on agreed real and lived values, or in reaction to management and leadership styles and behaviours. It can exist wholesale and be organisation led, and exist within departments and teams (commonly referred to as sub-cultures). Culture may be influenced by the markets you operate in, regulations you are subject to, the customers who choose to engage with you, key suppliers and third parties, your Board and Executive.
It is more common to engage with culture ‘when things go wrong’, spending time on understanding ‘what happened?’, ‘what did we learn?’, ‘what should we do differently?’, ‘what if?’ Often an organisation will conduct a ‘lessons learned’ exercise, without explicitly considering the role culture played in decision making. Sometimes the way our organisations work can contribute to unfortunate things happening, especially during times of change or transformation.
Organisation culture underpins organisation resilience. Organisations often make the mistake that resilience is only about processes and systems, this assumption is fundamentally wrong. People affect processes and systems and therefore the strength of resilience will be affected by individuals. Organisation culture drives our collective and individual ability to embed and integrate resilience within our processes and systems.
What is corporate culture?
There are a number of ways to describe culture. Have you ever heard an colleague or manager say ‘that’s not how we do things around here’, or even ‘this is how things are done’ , they are usually referring to a set of implicitly agreed ways of working.
Also described as the DNA of an organisation, scholars refer to culture as a set of shared assumptions, values and norms that can be identified through patterns in behaviours, symbols and often rituals. I find Hofstede’s definition useful:
A collective phenomenon — the collective programming of the mind that distinguishes the members of one organisation from others; however, this is maintained not only in the mind of its members but also in the minds of its other stakeholders, everybody who interacts with the organisation (such as customers, suppliers, labour organisations, neighbours, authorities and the press) (Hofstede, G., Hofstede, J. M., and Minkov, M., (2010) Cultures and Organizations 3rd edition, McGraw Hill)
Culture is neither good nor bad, it simply is about people and what people do when they come together, repeatedly, over a period of time.
Culture is that moment of shared understanding between individuals, it is recognisable in the patterns of behaviours that we are attuned to on a daily basis, it is made up of stories, legends and myths handed down from those who are in the ‘know’. It lives in what we do (motivation) and believe in (mindset); equally it lives in what we don’t do and believe in. Culture might be implicit but it is enduring governed by unwritten rules and unspoken assumptions — it is a silent language.
What does culture mean to strategy?
Culture is a key driver of strategy. Strategy can be implemented slowly or quickly, your organisation’s culture will determine the speed and outcome of implementation. How you reach your goals and objectives very much depends on the way your organisation works, how it processes, how it systematises activities, how it organises itself, the degree of autonomy afforded to managers, the type of people you employ, the level of employee commitment to the purpose of the organisation, the way customers are prioritised, whether you are about the end result or the means to an end.
For example, if you want to be innovative and responsive to the market, it is likely your organisation needs a degree of creativity, agility and flexibility to form the foundations of your corporate culture. Employees will likely be focused on the customer and her journey, always considering risk and opportunities, working in an empowered way. You will be clear on the pillars that hold up your organisation and the design principles that help drive how decisions are made. However, in practice your organisation works in a silo-way, working counter-intuitively to your aspiration and it is hard to breakdown those silos so that you can respond to new priorities more easily. Employees feel and are overworked, forget the reason why they joined the organisation in the first place, and overall morale and motivation starts to decrease amongst the workforce and ultimately it affects customer relations.
What can you do?
In order to implement strategy, first understand the culture that will drive your organisation to success and then consider the culture you have in place and whether you need to change it. For example:
your organisation’s direction (vision) and what you want to achieve
how the desired direction will be achieved, articulating the target culture that will drive success in your terms – create a blueprint that underpins your strategy
ethical values that will drive correct decision making and behaviours that will ultimately lead to success
the measures that will help you understand both if and how you are achieving your strategy
the culture in place right now. Take stock. Understand if present culture is enabling or disabling. Will it help you achieve your goals and ambitions and if not, start thinking about what needs to change. I like to use Hofstede’s framework to diagnose an organisation’s culture using six established spectrums:
the capability and competence needed that will underpin good decision making. First identify what this looks like and have ‘culture champions’ across your organisation who will support implementation
systems and processes, reliable management information and reporting to support effective decision making and behaviours. If you want agile decision making then design it into systems and processes that enable activity
ways of supporting line managers to support their teams and create psychological safe environments so team members can speak up with candour
reward and incentivisation programmes and link these to expected behaviours so that undesirable behaviours are not rewarded
leadership that ‘gets it’, so that they can champion expected behaviours and creates opportunities to drive the culture wanted and espouses the values that will drive strategy in the direction and manner expected. It has got to start from the top otherwise it is meaningless
through management information when values and behaviours are not aligning and delivering strategy, and put in place actions to correct issues or emerging risks.
Whether you want to understand your organisation culture or change it, remember that strategy cannot exist without culture, and culture is the means for achieving strategy.