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Volume 2.4 Table Of Contents
- Debunk cultural myths to accelerate progress
- Trend Watch: Cultural fit issues contribute to leadership churn
- Digging Deeper: Go beyond labels to identify your organizational culture
- Ask the Business Performance Expert:
Debunk cultural myths to accelerate progress
These days, it’s hardly news that an organization’s culture can make or break the successful execution of a wide range of strategies -- and a leader’s job (see “Trend Watch” below). Study after study confirms that everything from mergers and acquisitions to alliances to outsourcing and introducing new technologies hinges upon cultural fit. However, there are significant differences in opinion about what business culture is and how to work with it to achieve better top and bottom line results.
Often times, widely circulated myths cause leaders to underestimate or overlook the impact of organizational culture when they are in the process of strategic thinking and planning. Here are three myths that I encounter on a regular basis, along with facts based upon my own experiences of helping organizations to grow and supported by research (For additional myths and facts, read Preventing Strategic Gridlock®):
- Myth
#1: “Culture is about ‘people
issues’ and not strategic issues.”
Fact: Organizational culture is commonly defined as all of the values, beliefs, and pratices that exist in an organization, and is the primary force shaping key strategic decisions and how things get done. I like to think of it as your organization’s personality. Culture dictates the way your organization presents itself to the outside world as well as how it conducts its internal operations. As such, culture has a huge, even controlling impact on how likely it is that your organization will be able to carry out a strategy. Therefore, the earlier in strategic thinking and planning that you address cultural fit issues, the less likely you are to be blindsided by unexpected problems when executing your plan. - Myth
#2: “Creating an official culture
will get us the performance we want”
Fact: Many leaders put a great deal of energy into designing the “formal” or offical company culture. This consists of statements of vision, mission and values, as well as volumes of policies, edicts, speeches, systems, and process diagrams. However, I’ve found that progress may still not go as planned if leaders are overlooking elements of their organization’s “informal” culture --what really happens. From who sits where in the lunchroom to how decisions get made, the informal culture is just as prominent as the formal culture. There’s nothing in writing that dictates these values, beliefs and practices, yet they’re just as cherished as the written codes, policies and speeches – maybe more so. The point to remember, however, is that when formal and informal cultures clash, which often occurs as companies respond to changes in leadership and business conditions. the informal culture will win every time. Therefore, when you are considering a new strategy, it’s vital to determine which culture really prevails, and how well it will support the plan under consideration. - Myth
#3: “A strong culture is a
high performance culture
Fact: An organization that has elements of the formal and informal culture aligned can be thought of as having a strong culture. However, while some “walk the talk” organizations are high performers, this is not necessarily the case. As business environments evolve, characteristics of a strong culture that used to be highly functional in supporting one strategy and business model (for example, how decisions are made) can become dysfunctional, causing the company to become gridlocked, despite having been drivers of their industry in the past. In fact, I’ve found that if a strategy requires drastically different behaviors from employees, a strong culture can make it much more likely that there will be considerable resistance to a new plan. Taking this into account as early as possible makes it easier to identify needed adjustments and shape everyone’s expectations accordingly.
Bottom Line: Locating the cultural characteristics of your organization that will advance and block your strategy (see “Digging Deeper” below), and using this information as early as possible during strategic thinking and planning enables you to more accurately assess the fit of a proposed strategy for your company. If you choose to move ahead with the strategy, this step of strategic thinking enables you to build needed changes into your plan that will increase the probability of successful implementation down the road.
Trend Watch: Cultural fit issues contribute to leadership churn
According to J. Terence McCarthy,
Managing Director of executive search firm Cromwell
Partners (www.cromwell-partners.com):
“Across industry sectors, the life expectancy
of CEOs has decreased from twenty months in 2003
to seventeen months in 2005.” While there
are numerous explanations for the rise in turnover,
one of the reasons that more leaders are stepping
down from their jobs is because the strategies
that they introduced clashed with the existing
organizational culture so that execution became
mired in persistent problems. Leaders at all levels
of the organization can learn lessons from this
trend.
Regardless of the size of your company or the industry, bear in mind the following principles to reduce cultural clash when introducing new strategies and plans:
- Strategies that worked at a previous time and place aren’t necessarily going to work the same way in a different culture. Assess the degree of change that the new strategy will require before making commitments. You may need to significantly adjust your approach to make it work in the current environment
- Some elements of culture are easier to change than others. On numerous occasions, I’ve seen that trying to change a number of cherished cultural values, beliefs and practices all at once can lead to increased conflicts, confusion, firefighting, low productivity, lost revenues, and reduced profitability – what I call “gridlock”. Instead, focus on adapting the few cultural practices that can make the biggest difference to success and move incrementally.
- The most powerful leaders in a culture are not always the ones with the highest titles on the organizational chart. You can accelerate progress by identifying influential individuals and groups in the formal and informal culture, and negotiating their buy-in to adopting new behaviors. Their enthusiasm will spread across the organization and help you gain suppport for changes.
Digging Deeper: Go beyond labels to identify your organizational culture
Many people describe their organization’s culture by using labels, such as “entrepreneurial” or “hierarchical.” However, these terms and others can be misleading when it comes to identifying the vital elements of your culture that will advance or block your plans. For example, I’ve seen “hierarchical” cultures that are in fact, quite entrepreneurial in many respects. Likewise, I’ve seen “entrepreneurial” cultures that have a surprising amount of hierarchy. How, then, do you gain a more accurate picture of your culture?
To ensure that you have an accurate picture of your organization’s culture, search for evidence to support your conclusions. For instance, along with looking at practices in areas such as: business philosophy, leadership and management style, customs, artifacts, and work environment, some other areas that provide clues include (but are not limited to):
- Critical success factors of each department: How does a department determine whether or not it is operating successfully? Is it based upon customer service ratings, quality control factors, speed, cost, or some other organizational issue? Each of these factors reflects characteristics of the organization’s culture.
- Organizational structure: Is it hierarchical, flat or matrixed? Are job descriptions written and followed, or are they there only to comply with legal requirements?
- Workflow practices: How does work flow between departments? For example, you may find that your organization is not set up to share information because of elaborate approval processes. Also, how do various departments use technology?
The more evidence you have to support conclusions about your organization’s culture, the sooner you can take control to minmize those problems that do occur, and prevent others from occurring in the first place.
Ask the Business Performance Expert:
Q: We would
like to conduct a formal organizational culture
assessment to confirm our opinions about our company’s
culture. Any thoughts?
A: There are a number of excellent
instruments available. Keep in mind that whenever
you conduct a formal assessment, you need to manage
the process carefully. These interventions raise
participants’ expectations, and can also
raise their concern about why the assessment is
being conducted. It is important to communicate
clearly and credibly about the process, the assessment
results, and what you intend to do about them.