Strategy and Culture: Divided they fall.

A well thought out strategy and a vibrant, responsible culture are the two top tools at leaderships’ disposal in their never-ending quest to maintain organizational viability and effectiveness… Culture expresses goals through values and beliefs and guides activities through assumptions and group norms.

A corporate culture matters. It is a key differentiator between the companies that sustain winning performance and those who barely meet average benchmarks. Those who get it right thrive when culture and strategy work together. Culture is invigorated when who you are on the inside, and who you are on the outside, is aligned.

Culture is challenging to implement in part because it is about the spoken as well as unspoken behaviors, values, mindsets and relationships within an organization which are difficult to quantify. According to Korn- Fery, left to chance, culture evolves for better or worse. Their studies show that while 72% of executives say culture is extremely important for organizational performance, only 32% say their organization is fully aligned with their business strategy. That’s a huge gap which has consequences…

A mismanaged culture can hurt an organization. Culture is about the unwritten rules that govern the norms of an organization. It’s the very fabric of an organization, the physical space, the stories, the legends, rituals, behaviors, mindsets, motivations that permeate every level. It can’t afford to be mismanaged or left to chance.

Culture is often resistant to change in part because people are drawn to an organization because they fit in; they share similar characteristics and values. This is where they are comfortable. Those who don’t fit in leave, which can be to the disadvantage of a company which could have benefited from new ideas and a new mix of relationships. So an organization springs up of likeminded people who follow the leader who thinks just like they do. Or leaders hire people who are just like them! And the norms, good or not, ethical or not, responsible or not are formed.

The “old” leader may leave voluntarily or be dismissed. And as often happens a new leader is appointed to take his or her position from within the organization so similar patterns are repeated. It is especially challenging for the new leader to make changes to the culture when they have been part of that same culture.

Wells Fargo is an example we are familiar with. Under former CEO John Stumpf‘s regime a culture that put profits above its stakeholders was encouraged and flourished. Public censure enters the picture, the board fires the present CEO; “hires” a Tim Sloan as its new CEO and President, an insider who has been part of the same culture. The same behaviors continue. Well that shouldn’t surprise anyone, the new regime was part of the old culture which allowed and encouraged the egregious behavior to begin with.

Another case of “mismanaged” culture is the toxic environment at Amazon, which was described by the New York Times as “bruising,” and the Times called Uber’s culture as aggressive and unrestrained.

Liz Ryan, CEO and founder of Human Workplace, says “Your culture is the loudest thing happening in your organization. It is booming in your employees’ ears. Your vendors know a lot about your culture. Your customers may know even more about your culture than you do. They have a ringside view!

A recent Harvard Business Review article defines culture as “…the tacit social order of an organization: It shapes attitudes and behaviors in wide-ranging and durable ways. Cultural norms define what is encouraged, discouraged, accepted or rejected within a group. 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.” (B. Groysberg, J. Lee, J. Price and J. Yo-Jud Cheng: HBR, January 2018)

Not all cultures are equal. Some organizations emphasize flexibility, some stability; some prefer dependence, some independence. Some take pride in this is the way we’ve always done it and for some innovation is the name of the game. There is a decided difference between the culture at Apple as compared to the Imprimis Group, a Dallas based company recently honored with the North Texas Ethics award. The company culture is comfortable, “a people company. We’re neighbors, business partners, entrepreneurs and active members of the communities in which you live and work in.” As a result of caring about the community and its stakeholders, Imprimis has a 95% plus overall customer satisfaction rating, and has seen record profits in the last few years.

Corporate culture can define a business and make all the difference when it comes to retaining employees and keeping them happy. According to a report by TruPath 64% of employees feel they don’t have a strong work culture. Many companies are falling short in providing their staff the tools and motivation that are needed to succeed…

Corporate culture can define a business and make all the difference when it comes to retaining employees and keeping them happy. Click To Tweet

Culture and strategy go hand in hand. When the two are aligned, all your people programs and processes work together to support the business strategy, people clearly understand how they can contribute to the business, and they are more invested and engaged in their work.

Culture and #strategy go hand in hand. When the two are aligned, people clearly understand how they can contribute to the #business. Click To Tweet

The good news is we can only get better as the workplace picture is so dismal. The Gallup organization’s State of the American Workplace reminds us that 51% of employees are actively looking for a new job or watching for openings. Only 33% of employees are engaged in their job.

Their reports are disconcerting; workers who feel detached from their company culture are unlikely to agree that the mission or purpose of their company makes them feel their job is important. The more disconnected employees feel, the greater their readiness to change jobs. While 37% of engaged employees are looking for jobs or watching for opportunities, higher numbers of not-engaged and actively disengaged employees are doing the same (56% and 73%, respectively). Actively disengaged employees are almost twice as likely as engaged employees to seek new jobs.

Thus culture appears to most directly impact employee engagement and motivation. A major reason for individuals leaving their job is the company culture.

Great companies align their common efforts to advance their mission and live shared values. How employees act, what on-going structures and clearly defined practices and affirmative principles are put in place is what fosters meeting their goals.

Productivity expert W. Edwards Deming once said “we need to drive out fear so that everyone will work together more effectively and productively.” Cultures that thrive share a spirit of collaboration and respect for the company and its colleagues. They are the result of carefully thought out and consistently implemented initiatives and plans.

A culture where people, not just the bottom line count, where people are recognized for their contributions, there is an opportunity for individual fulfillment and where they can see genuine caring from the C-Suite; and which aligns its strategy to include these factors has the potential to thrive.

Ultimately, culture and strategy are about conscious leadership and management. It starts at the top.