“When I talk to Wall Street, people really want to know your results, what are your strategies, what are the issues, what it is that you’re doing to drive your business. Never do you get people asking about the culture, about leadership, about the people in the organization. Yet it’s the reverse, because it’s the people, the leadership, and the ideas that are ultimately driving the numbers and the results.”……Harvard Business Review (HBR) March 2011, Stephen Sadove, Chairman and Chief Executive of Saks reported as saying in a New York Times interview
When aligned with corporate strategy and strong leadership at Board and senior management levels, a strong culture drives powerful positive outcomes.
The simplest way to describe culture is “how we do things around here”. Yet given culture has such a widespread impact, the cultural tone of your organisation needs to be set from the top. It’s so important for leaders to understand the way culture cascades down throughout their organisation.
What happens when culture and strategy are not aligned?
A misalignment between culture and strategy:
- Reduces your organisation’s ability to achieve its strategic objectives;
- Derails the strategy – possibly completely, but at least noticeably; and
- Damages your organisation’s reputation, potentially in a severe manner.
Think of some of the recent disasters that were highlighted in the recent Financial Services Royal Commission when it was revealed that performance incentives had a profound and toxic influence on the culture of some of our financial institutions.
Furthermore, often, a misalignment between culture and strategy is a core reason that many established organisations struggle with big disruptions in their markets.
Why is it important to know how to build and assess your organisation’s culture?
Our work with Boards in the Governance space includes assessing the impact of culture on their organisation’s underlying strategies and objectives. Often, Boards are unaware of what type of culture they would like to see in their organisation. in addition, they are at a loss as to what might be the level and strength of the default culture that operates throughout their organisations. Boards cannot now operate without embracing culture if they truly seek to embrace their governance duties and obligations.
The secret is not just having a Board bringing to bear a focus and commitment on a set of values and an approved plan, there are other aspects i.e. a commitment to supporting a drive for higher engagement from your staff, which ultimately need to be taken into consideration.
Of course, without having the right culture then what is done will be sub-optimal in the results achieved. An organisation’s culture is increasingly recognised as having a significant and positive impact on the peak performance of your organisation. This is because people are more loyal to your organisation when you have a great culture in place, i.e. people are not loyal to just a strategy.
Is culture an enabler or a hinderance to your organisation’s underlying strategy and objectives?
In the current climate of uncertainties, a strong culture can foster resilience and bring competitive differentiation to your organisation.
But let’s face it – culture just doesn’t happen! Culture is reflected in behaviours, and those are heavily influenced, if not directly, then certainly, and substantially, indirectly, from the behaviour of the organisation’s leaders.
Therefore, as a leader within your organisation, there is an assumed duty, to involve and inspire others within the whole of the organisation to live the desired culture.
Great working cultures are built on:
- Behaviours shown and tolerated by the organisation’s leaders;
- Positive attitudes as a response of staff; and
- Clarity of expectation and re-enforcement of its practice.
It is the certainty of those organisational values and knowing there is common execution of them that delivers optimal rolling out of the strategy plan. When people sense an internal stability and confidence in the integrity of the organisation’s procedures, it is then there emerges a true sense of connectedness among everyone.
There’s so much more to culture than having those comfy chairs and happy hours in the office!
Rather, it’s more about the ways your people act in critical situations. For example, how do they manage pressure and respond to various challenges? How do they treat customers, stakeholders, and each other?
Implementing changes may seem like a big deal in a workplace environment as it can take significant amount of time and effort. But one way you can truly understand some of the changes and/or improvements that are needed is by seeking feedback from your staff.
Always remember, the story needs to be based on what is actually happening in your organisation. It is damaging to craft a culture based on fiction instead of facts. Your staff are in the front row seats to identify issues that require solutions. Those same front row seats remain occupied, whether their views are called for, accepted or worse, ignored.
Allowing staff to have a genuine voice may be a little scary the first time, but overwhelmingly, (surprise surprise), they often care just as passionately about what happens to their organisation and their thoughts and ideas are truly gold.
So it is often found that once organisations realise and experience this, then they don’t ever stop when it comes to evaluating or assessing. Targeted and continued improvements become part of the rhythm of the organisation’s life, because:
- It supports the leaders and staff in keeping its culture both relevant and alive; and
- It ensures that the culture acts as a positive enabler for your organisation to achieve and maintain peak performance.
Using culture as a landscape to build your strategy
In a perfect scenario, culture and strategy complement and nurture each other. Strategy and culture operate best when working together in harmony. Leaders need to ensure they are perfectly aligned.
The power of having culture and strategy in sync is that they enable each other to create incredible organisational outcomes.
As we reflect on our own current organisation, or maybe, a recent one we have had an association with, it starts to make sense, doesn’t it? When you’re aware of the true culture of your organisation, it is easier to create a strategic plan because you’re familiar with all the factors.
If your organisation is wrapped in a canvas, then that canvas needs character – call it its culture. And to that culture is added navigation signs and markers – call that its strategic plan.
As a leader, to be conscious of the desired culture means knowing what is expected, accepted and addressed with staff and contractors. It is not only valuable knowledge, but essential when creating a strategy for your organisation. This simply means your strategy has a far greater chance of being very efficient if you apply a realistic perspective to it.
This is why to have a winning culture and the right strategy in place is pretty much unbeatable.