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Culture Eats Strategy For Breakfast

March 16, 2022 | Operational Excellence

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This famous saying by Peter Drucker highlights this: You can come up with a gold-standard strategy, but it will fail if your organisation’s culture can’t or won’t make it a reality. After all, people are the ones who will make strategy a reality.

To illustrate: Let’s say that two companies were given a solid strategy to improve the efficiency of their operations. One ran with it and completely transformed. The company got better and better, and management refined the strategy as time went by.

The second company executed the strategy too. It gained advantages from the transformation programme. At least, for a while. However, after a few years, old habits returned, and all the gains made from the transformation were lost. They will need to start all over again.

Why did this happen?

The culture got in the way. Or rather, the old culture.

Old habits can be as persistent as a stubborn stain.

An organisation may do all it can to create a new culture, but if you don’t maintain the new ways of working, old ways can creep back. This is something I make all my clients understand – it takes hard work to maintain the changes made in transformation programmes.

The mystery of culture

Culture is hard to define and even harder to change. If I had a magic pill to change a “bad” culture to a stellar one, I’d probably be a billionaire. Creating a good company culture takes collective will and determination, and as I mentioned, maintenance.

In its simplest definition, culture comprises a collection of habits. But of course, it is more complex than that.

Picture culture as a pattern of basic assumptions that a group has invented, discovered or developed to cope with challenges, both internal and external.

One of the most common mistakes people make in evaluating an organisation’s culture is to judge it through its “visible parts” such as its products, premises, the way people dress, or marketing slogans and messages.

For example, just because a company has a recreation room filled with pool tables and video games, doesn’t mean that it is a progressive place where everyone can speak freely. Recent headlines denouncing toxic cultures in cool, hip companies have shown how true this is.

For me, personally, the best clue to determine if a company is a great place to work is to visit the shop floor or branch toilets — you can tell an awful lot more about a company culture once you have been there!

Jokes aside, corporate culture is complex and ever-evolving.

An immensely important clue is the behaviour of the people in positions of power.

In a perfect world, company leadership leads by example and “walks the talk”, their actions in sync with company values. Culture can change overnight when a new leader overturns the old way of working. Depending on his or her behaviour, the culture could change for better or worse.

And while you can find clues about an organisation’s culture in its vision, mission, and values statements, that may not always be reflected on the ground.

Many components of culture are invisible, taken for granted, and only understood by company insiders. These are the shared behaviours, values, and assumptions held by a company, and they’re rarely spelled out on a poster in the office.

Things such as, is it okay to speak freely or to express disagreement? Is it okay to ask questions if you’re unsure about something? Is it acceptable to leave at 5 pm, or is it better to leave only after the big boss leaves?

Does this mean you need to transform the organisation’s culture so that it will execute a strategy successfully?

Not always.

Instead, consider the cultural strengths and needs of the business, and root your strategy in it. Does the strategy play well with the company’s current culture? Does the strategy help the business achieve what it needs?

When corporate culture is aligned with strategy, both enhance each other.

For example, a company that prides itself on its innovative products encourages innovation in the organisation by allowing experimentation and a change-oriented culture. Or an NGO that promotes workplace safety, must ensure, first and foremost, that its own workers are safe from psychological and physical harm. 

In a perfect world, strategy is rooted in the cultural strengths of your company and the needs of your business

But the reality is often messier than that.

Designing strategy too tightly around culture may limit your company’s potential, especially if it is toxic and not performance-oriented. Sometimes, the vision you want to achieve requires a complete overhaul.  For example, when a nationalised company is privatised and opened up for competition.

In my experience, a corporate culture that does not support the vision of the organisation needs to be changed. How do we do that? Well, that’s a topic for another column!

Krishna Paupamah has worked with companies globally to transform their business for over 35 years. He is the Founder and Group CEO of Renoir Consulting. He can be reached at krishna.paupamah@renoirgroup.com.

This column was first published in Business Today.

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