Does your culture support or sabotage your strategy?
"An organization's capacity to execute its strategy depends
on its "hard" infrastructure--its organization structure and
systems--and on its "soft" infrastructure--its culture and
norms." Amar Bhide (Harvard and Columbia)
Is your organisation one which invests a considerable amount of
time and effort (and, therefore, cost) in looking to the future
and creating a strategy and strategic plan? I hope so! However,
what happens if the plan is not successful and the objectives
not achieved? Is the blame put on to the market, the
competition, the planners, the staff, or even the plan? The
problem may be something more fundamental - the culture is not
right for the strategic direction!
There are a number of variations about what is a strategy and
what is involved in identifying and creating a strategy. The
definition below is one which covers most of the key elements.
"An effective strategy is an integrated array of distinctive
choices about which markets a company serves, what unique value
proposition it offers to the customers, and how it arranges its
functions to deliver that value." Prof Jan Rivkin
In creating a strategic intent, Michael Porter suggests asking 3
questions:
What is the business doing?
What is happening in the environment?
What should the business be doing?
For many years, when working with organisations in various
sectors on creating their strategic plan we found that people
approached the process with good intentions and wanted to be
thorough and professional. The tools and techniques are
generally well-known and are applied with varying degrees of
effectiveness. Many managers know about the 7S's, SWOT and PEST
and suchlike. (How well they use them is another matter!) The
better organisations have customer feedback data and may carry
out some market research. Their analysis of the external
environment is based on good information plus knowledge and
experience. However, when they come to analysing the internal
environment, they may not have such a clear understanding even
presupposing they carry out the Strengths and Weaknesses
thoroughly.
Combine running the day to day business with looking to the
future and leading the people and the organisation and today's
executives and managers have plenty to deal with. Is it any
wonder that they do not consider the culture of the
organisation? Anyway, surely the culture is what it is, we
cannot do anything about it can we? Not strictly true. Corporate
culture happens - the only doubt is if it is the culture you
want to have (or be part of.) What is the culture of an
organisation - or the corporate culture? The simple statement
(probably first used at McKinsey) saying, "the way we do things
round here" is a good start point. A more wordy definition is
"the moral, social, behavioural norms of an organization based
on the beliefs, attitudes and priorities of its members." This
does provide for a better understanding of where cultures start
to emerge. Corporate cultures evolve from a number of factors:
The top management and how they behave and operate
The history and traditions within the organisation
Strong groups within the organisation
The policies and practices - including rewards, recognition and
promotion
Whether the present culture has been created by accident or
design, it is what you have and is the platform from which the
business will continue to operate. Before you can set out on the
new strategic plan you need to know whether the culture and
strategy are aligned. If they are, you have a chance of success.
If not, ........? A close fit between the culture and the
strategy will increase your chances of success. Where the
culture encourages the right behaviours and actions to support
the strategy, the people will have clear guidelines and kpi's
about what is good performance. If the culture has clear values,
beliefs and behaviours which link to the vision, objectives and
strategy - people will feel (and be) aligned and deliver more.
Where your culture does not fit with the strategy
implementation, and required behaviours, you send mixed signals.
People are in conflict. Should they be loyal to the culture and
company traditions and resist actions and behaviours promoting
better strategy execution? Or should they support the strategy
by engaging in behaviours that run counter to the culture?
When a company's culture is not right with what is needed for
strategic success, the culture has to be changed as rapidly as
can be managed!
How can you decide what your culture is - and whether it will
fit the strategic plan?
There are a number of ways of looking at corporate culture.
There are some which assess the styles of the top leaders and
can define the culture based on their behaviours. There are
tools such as the Hofstead Cultural Orientation model, which
look at various paired factors each on a continuum. The Johnson
and Scholes Cultural web offers a more anecdotal and subjective
view using 6 inter-related elements. The one we have used with a
number of organisations is the Denison Organisational Cultural
model. This tool has been around for over 16 years and
benchmarked across over 1,600 organisations. It provides a more
objective view of organisations into 4 areas, based on axes
which consider External - Internal focus, Stable - Flexible
Involvement commitment - ownership -
responsibility Are our people aligned and engaged?
Adaptability patterns - trends - marketplace Are
we listening to the market?
Mission direction - purpose - blueprint Do we know
where we are going?
Consistency systems - structures - processes Do
our systems create leverage?
The Denison Organisational Culture Survey has 60 items that
measure specific aspects of an organisation's culture in each of
these four traits and twelve management practices identified in
Dr. Dan Denison's research. Individual surveys are collectively
tabulated into a graphic profile that compares your
organisation's culture to that of higher and lower-performing
organisations. The results are presented in a typical circumplex
with reports being produced in bar charts.
The Denison Organisational Culture Survey has 60 items that
measure specific aspects of an organisation's culture in each of
these four traits and twelve management practices identified in
Dr. Dan Denison's research. Individual surveys are collectively
tabulated into a graphic profile that compares your
organisation's culture to that of higher and lower-performing
organisations. The results are presented in a typical circumplex
with reports being produced in bar charts.
One of the main strengths of this tool as that it provides a
snapshot of the organisation's strength and weaknesses. For
example, when we used it with an organisation which was the
result of a merger of two companies we could see that there were
low scores in the "involvement" area which told us that staff
morale was low and they needed attention quickly if the good
people were not going to leave! Also, the "consistency" result
was low - which meant that the systems were likely to lead to
customer and service problems which was one area they wanted to
compete on! This had the potential to sabotage their strategy!
We created "action teams" to look at the detailed reports on
each trait to address the major issues highlighted in these
areas. Within 6 months they could see (and measure) significant
improvements in these. Another client had a new strategy which
involved re-positioning their business and becoming a lot more
proactive in their market and towards their existing clients.
The Denison results showed that they were low on the
"adaptability" trait - and this is currently being addressed.
Another plus which Denison offers is that you can judge your
culture against high performing companies and see how well you
compare. There are many examples of organisations recognising
the need to do improve their culture, driving this from the top
and then seeing the benefits in their bottom-line.
The characteristics of organisations with a strong corporate
culture will include most of the following:
A clearly defined and communicated vision and mission
Clearly stated values which underpin the behaviours throughout
the organisation
A clear indication of the behaviours to be followed by EVERYONE
in the organisation from the boardroom down
The top management work at creating and keeping the desired
culture.
To ensure that the corporate culture supports your strategy it
might pay dividends to carry out an assessment before you commit
too much time and effort to the strategic planning process.
Changing the culture is not necessarily easy, or even a quick
task - but it can be done. Your strategy needs solid foundations
to build upon, make sure that the culture is strong and that you
align the strategic intent and plan with it. You will achieve
the business success you want, create and even stronger culture
and develop the corporate resilience to succeed even more.