'Culture eats strategy for breakfast,' said the American consultant, Peter Drucker memorably.
It's a good line.
But what does it mean in reality?
Strategy and culture need to work together and mutually support each other. If they are disjointed, success will suffer.
Typically, strategy is the principal focus in organisations – and rightly so. It's vital to have a clear future direction.
But company culture often gets left behind, despite studies showing that culture has a direct impact on performance and customer satisfaction. In fact, companies that are culture-conscious outperform industry benchmarks and their competition1.
Is it their culture or their strategy that stands out?
Often, what makes a business unique is their culture. Take Starbucks, for example. The company differentiates itself from competitors not by its strategy (which is similar to many other coffee chains) but through its culture.
And culture drives customer and employee loyalty. It is a company's unique culture that helps to attract and retain the best talent.
If the people are passionate about the company they work for (and its values), then they are more likely to strive for the company strategy. The culture will influence their everyday behaviours and actions.
With such undeniable benefits, every organisation needs to focus on its culture as well as its strategy. But how?
First of all, let's be clear - culture is more than values and vision alone.
It is about describing the behaviour norms in an organisation. It's not merely about what the leader might espouse on culture. It is deeper than that. Culture needs to be considered in every part of an organisation.
Here are our four recommendations for bringing about culture change and ensuring your strategy and culture are aligned.
What is your culture now? The day-to-day reality may be very different from the values written on the office wall. To be able to change your culture, you first need to understand it.
Carrying out an anonymous survey of your people is a good way to find out their experiences and what they would like to change in the future.
It is also vital to consider 'climate' - how it feels to work in the organisation.
Culture and climate can sometimes be at odds. For example, you could be very well rewarded financially, and so you feel superficially valued (culture).
But, if the organisation has a forced ranking system that exits 10% of 'underperformers' every year, that feeling of being valued is, at best, temporary (climate).
Culture and climate in that situation can be working against each other. It is crucial to consider both in any review of culture.
In addition to a survey, we recommend setting up workshops and one-to-one interviews for your people to speak frankly in a safe environment and to collaborate on ideas to improve the culture.
We recommend that an external party leads these conversations, with specialists in employee consultation and engagement, to ensure a highly sensitive and objective approach. Working closely with your HR team and leaders, they will gather feedback from your people at all levels and departments. From this, they would highlight key findings and recommendations.
As an example, consider the approach we took on the BBC Respect at Work Review. As a result of this work, BBC employers were able to see positive changes happening.
What are your values and purpose?
With your strategy front of mind throughout this process, the next step is to imagine how you want your culture to be.
And purpose is an essential part of this. Purpose is what helps to unite people – remember the old fable of the NASA cleaner who said her purpose was to put a man on the moon?
Once you have your clear values and purpose, go back to the findings of your surveys, workshops and interviews. What works and should be encouraged? What are the weaknesses? Where are there misalignments with your purpose?
Then develop an action plan to address the key issues.
As you put in place the changes or new focus on your culture, you will see the most significant impact by being transparent in communicating to your people on the findings, the action plan, and involving them throughout the journey.
To get their support and buy-in, celebrate success whenever you see the impact of the changes.
Culture is critical to the success of an organisation. Strategy and culture need to be aligned and to achieve this balance, you need to dedicate time to focusing on your culture, understanding how it is today and making changes on an ongoing basis.
The behaviours you see will then match the behaviours and purpose to which you aspire.
Last updated: 16 Apr 2020