We know Peter Drucker’s line: “Culture eats strategy for breakfast.” But do we take it to heart?
In the Harvard Business Review article “The Leader’s Guide to Corporate Culture,” the authors note, “Strategy and culture are among the prime levers at top leaders’ disposal in their never-ending quest to maintain organizational viability and effectiveness.”
Why care? Because in the last 15 years, the workforce has changed drastically and 70% of employees are now disengaged or hate their jobs. Turnover is up everywhere.
My friend, Steve Stowell, at The Center for Management and Organizational Effectiveness, says strategy is everybody’s business. He should know. He wrote the book Strategy Is Everybody’s Job. It made me think, shouldn’t culture be everyone’s business as well? Of course, it starts from the top, but every employee must buy into the cultural norms and understand and agree with what is encouraged, discouraged, accepted and rejected. Culture shapes an organization both behaviorally and attitudinally. One of the authors of the above-mentioned HBR article, Boris Groysberg, says, “When properly aligned with personal values, drives and needs, culture can unleash tremendous amounts of energy toward a shared purpose and foster an organization’s capacity to thrive.”
When culture is aligned with strategy, there are positive organizational outcomes.
Groysberg identifies two dimensions that define culture:
- People Interactions. Some organizations foster highly independent interactions, resulting in autonomy, individual orientation and competition. Other organizations are highly interdependent, resulting in a high degree of integration, relationship management and coordination of group efforts.
- Response to Change. One end of the spectrum has firms that emphasize stability. Rules are followed. There is consistency, predictability and status quo. On the opposite end of the spectrum, the emphasis is on flexibility, innovation and adaptability with an openness to change.
Plotting firms along these two axes, Groysberg has identified eight cultural styles: caring (Disney), purpose (Whole Foods), learning (Tesla), enjoyment (Zappos), results (GSK), authority (Huawei), safety (Lloyd’s of London) and order (SEC). He emphasizes there is no good or bad style. Each has strengths and weaknesses. Curious about your firm’s cultural profile? Take the assessment: https://hbr.org/2018/01/the-culture-factor.
It’s difficult, but not impossible, to change or evolve a company’s culture since it involves the emotional and social dynamics of its people. Groysberg identifies four effective practices:
- Articulate your aspiration. First analyze the current culture and then clearly define which current outcomes do or do not align with anticipated market and business conditions. It is important to talk about the change in terms of the present business challenges and opportunities as well as aspirations and trends. Using tangible examples is critical to people’s understanding of and willingness to change. If a firm’s cultural style is results and authority but its industry is facing rapid change, it may need to shift to a learning culture while remaining focused on results.
- Select and develop leaders who align with the target culture. Since leaders are the catalysts for change, it is important they be engaged, energized and educated about the important relationship between culture and strategic direction. Once leaders understand the relevance, the benefits and the impact they can have on the organization, they will support the change.
- Use organizational conversations about culture to underscore the importance of change. Colleagues can talk each other through the change. Employees who see their leaders talking about new business outcomes and behaving differently will begin to behave differently themselves. Road shows, listening tours and structured group discussions are all great tools when shifting culture.
- Reinforce the desired change through organizational design. Use the company’s systems, structures and processes to support the aspiration. For example, aspirational supporting goals should be part of the performance appraisal. Training should reinforce the cultural change. Org charts and reporting structures should be realigned to support the cultural change.
It’s not easy, but Groysberg says, “It is possible to improve organizational performance through culture change...Leading with culture may be one of the few sources of competitive advantage left to companies today.”
If you’re interested in exploring culture further, The Leadership Academy is offering a virtual class, “A Company Culture for Today’s New World,” beginning March 6. We’d love you to join us.
McDaid is The Council’s SVP of Leadership & Management Resources. firstname.lastname@example.org