At most organizations, culture is a background asset, rolled up into HR onboarding docs and expressed as a set of values, then promptly forgotten. However, an organization’s culture is one of its most important things which can support an organization’s performance, innovation & success. Strategy offers a formal logic for the company’s goals and orientates people around them. Culture expresses goals through values and beliefs and guides activity through shared assumptions and group norms.We break down culture into two simplistic aspects; the behaviors we tolerate and behaviors we do not tolerate within an organization. Once this is explicitly broken out, it actually acts as A LEVER for performance.
Another important but often missed connection is the link between organizational strategy and culture. Organizational strategy is rarely if ever linked back to an organization’s culture and usually there is quite a gap between strategy and culture in most companies.
Strategy provides clarity and focus for collective action and decision making. It relies on plans and sets of choices to mobilize people and can often be enforced by both concrete rewards for achieving goals and consequences for failing to do so.
An organization’s leaders can also shape culture, through both conscious and unconscious actions (sometimes with unintended consequences). The best leaders we have observed are fully aware of the multiple cultures within which they are embedded, can sense when change is required, and can deftly influence the process.
It is common for leaders seeking to build high-performing organizations to be con-founded by culture. Indeed, many either let it go unmanaged or relegate it to the HR function, where it becomes a secondary concern for the business. Leaders often lay out detailed plans for strategy and execution, but because they don’t understand organizational culture, power and dynamics, their plans often go off the rails.
Culture can be managed, or even deliberately planned and created. The first and most important step leaders can take to maximize its value and minimize its risks is to become fully aware of how it works.
- Culture needs strategy & strategy needs culture.
The two are synonymous but more importantly symbiotic. Transformational culture change requires a cohesive strategy. But equally, a strategy developed devoid of cultural awareness will almost always fail.
- Internal culture detractors are the biggest risk facing your business.
More so than almost any external threat, the internal threat from people who disrupt your culture can be enough to kill your vision and therefore your deliverables.
- Cultural change can be effected in as little as 90 days.
It’s hard and it requires tremendos focus, but it’s totally achievable when culture transformation is broken down into smaller steps. See our other blog article on How to Build a Strong Culture for how to do that effectively.
Leaders and their teams too often develop strategies absent of any consideration for the culture within which they operate. When looking at organizations who are successful at transformational changed and strategy implementation, their leadership teams are often aligned around five key conversations:
- Point A – the current state of the organization, or what is currently true about the organization and needs to be fixed, resolved, changed
- The environmental constraints that act against them, what is happening outside and around them
- What is at stake for the organization if the status quo persists, why should they care about change
- Point B – The desired future state where they want to be
- The strategy that will move the organization from the current to future state, what’s most important to focus on.
However, the alignment of those five conversations is not enough. With a shared perspective to the desired future state and the strategy to achieve their objectives, leaders must intentionally account for culture and introduce and enact their strategy within that context. Defined as the line that separates the behaviors that are tolerated from the behaviors that are not tolerated within an organization, culture is the biggest off-balance sheet asset an organization has.
Culture dictates what plans, strategies, and ideas get enacted. Strategy absent of consideration for culture will fail to realize its full potential to create impact and stimulate meaningful change. Drawing upon deep experience helping organizations develop and implement successful strategies and how culture underpins any successful strategy implementation, below we outline what leaders can do to enact a culture shift that advances their own strategy.
- Establish an awareness of your organization’s current and desired CULTURE.
- Do a CULTURE inventory – What’s tolerated? What is not tolerated?
- Define the desired culture – What do you want to Tolerate and Not Tolerate?
- Model the culture you want throughout the strategy development process
- Acknowledge when people are embodying and living into the desired CULTURE
- Be swift and consistent when calling out behaviors incongruent with the new CULTURE
- The change you start with is the change you get
- Increase the readiness of your organization and CULTURE for implementation
- Enroll others early in strategy development in a meaningful way – leaders and laggards
- Build alignment early and proactively maintain it throughout development and implementation
- Communicate, communicate, communicate
- Remind everyone of the “Why. Why? Why.” (because they will forget)
- Proactively create and manage the narrative surrounding the strategy and implementation
- Leverage a shared display tool for tracking progress
When evaluating how culture affects outcomes, the context in which the organization operates—geographic region, industry, strategy, leadership, and company structure—matters, as does the strength of the culture. What worked in the past may no longer work in the future, and what worked for one company may not work for another. When aligned with strategy and leadership, a strong culture drives positive organizational outcomes. Analyzing what is needed in any given organizational strategic situation, e.g needing to scale teams and optimize workflows for a new streaming model, you can see that having an innovative, high performance culture, versus a stable, resistant to change culture, would start to impact what is possible to achieve. To summarize, a strong culture can either be a significant liability when it is misaligned with your strategy, or actually help to deliver on your strategy.