In my most recent book, Straight Talk From Corporate America’s Ten Most Requested Speakers and Trainers, I am interviewed on the subject of aligning culture and strategy. In this article, I will share some of the thoughts from the book and additional thoughts not in the book.
The first point, and this is absolutely essential to understand, is that if there is a conflict or misalignment between culture and strategy, culture will win each time. As the title says, culture eats strategy for lunch. An example of a misalignment between culture and strategy is the situation where a company’s strategy is to grow through innovation and creativity, yet the culture is highly autocratic and tightly controlled. How well do you think the culture of a highly efficient and structured company such as Wal Mart would work for Apple?
Michael Porter, Harvard University professor and recognized expert in the area of business strategy, maintains that one of the biggest mistakes that any company can make is to get “stuck in the middle”. Being stuck in the middle means trying implement a strategy that creates competing and conflicting priorities in an organization and marketplace. Again using Wal Mart as an example, Wal Mart’s strategy is to be highly efficient, leverage huge buying power to get lowest possible prices, and to cater to consumers who view price as the key factor is their buying decision. If Wal Mart were to try to expand through opening boutiques, selling specialty merchandize, this would create tremendous conflicts within the company because it is totally foreign to the current culture. Sears has been stuck in the middle for years and has struggled as a result.
Culture is not easy to change, but it can be changed. Culture emerges over time through events in the company, most of which were unplanned or unanticipated. I like to call this the legend and lore of the company. Fed Ex is full of stories about exceptional things that employees have done to ensure packages got delivered on time to customers. Each of these incidents, and the way that management responds to them, form the basis of the company’s culture. The more consistent the stories, the stronger the culture becomes. The longer that a company has been in business, the more difficult it is to change the culture because of the history.
Sometimes one single and significant event can establish a culture for years. Once I was a manager of a plant that got spun off from a major company and we operated as our own business for a period of time. Soon after we were separated, we had a power outage late one Friday afternoon just a the management and staff were about to go home. When this plant had a power outage, it created major problems and took everyone there to get things running again. Usually the operators handled this and management stayed out of the way. However, we did something different. Every manager and staff person went into the plant and asked the operators how we could help them. We worked for them. Around midnight, everything was back up and running. From that day on the trust in management was never questioned and a spirit of teamwork was never better. It was not a planned or orchestrated cultural change process. It just happened.
The key point of that story is that cultural change doesn’t happen through a formal change program—those usually backfire—but rather through management taking advantage of events and exhibiting different behaviors. The culture of an organization is primarily determined through the actions and behaviors of its leaders. It is determined by what is allowed or not allowed. It is determined by who gets rewarded and who doesn’t.
In many instances, senior leadership doesn’t really have a good grasp on the real culture in the company. They may be out of touch with reality. Often there are stated values or culture, but this doesn’t make it real. The simplest way that I have found to define the culture is to ask two questions—one, what have people got fired for around here– and two, what characteristics get people promoted. I worked in an operation where most of our involuntary separations were due to attendance. The culture was established that you came to work everyday and missing work was an event. We has very low absenteeism because management behavior and actions reinforced this.
Culture is important because strategy is executed through the behaviors and actions of everyone in the organization. Those behaviors and actions are impacted by the cultural norms. For instance, if a hospital has a strategic initiative to become the preferred provider or preferred employer in the area, yet the culture focuses more on financial results and the “numbers”, then there is the potential for cultural conflict. This is not to say that financial performance and operating targets are not important, but what really drives the organization. I once had a nursing director tell me she was publicly criticized for being late for a budget meeting with the CEO after she was delayed dealing with an issue with a patient’s family. Instead of being criticized, she should have been applauded for making this choice if the hospital was truly trying to become the preferred provider in the area.
The first step to addressing a misalignment between culture and strategy is to identify and acknowledge it. If you are having difficulty implementing a strategic initiative, it may be that culture is eating your strategy for lunch.
Author Resource:
Ryan Scholz works with leaders whose success is dependent on getting commitment and high performance from others. He is author of Turning Potential into Action: Eight Principles for Creating a Highly Engaged Work Place. For more information, visit his web site at http://www.lead-strat-assoc.com
![[Valid RSS feed]](http://www.look4articles.com/images/icon_Rss.png "XML Feed For RSS"){kind=icon}
Category Rss Feed
Print This Article
Add To Favorites
![[Valid RSS feed]](http://www.look4articles.com/images/rss.jpg "XML Feed For RSS")