Management Guru Peter Drucker famously stated that culture eats strategy for breakfast. In a business environment where culture is more important than ever, developing your organisational culture is more than just having a set of values and a vision. Everyone in the business needs to live and breathe your culture and set the example. It needs to be part of everything you do, and it should act as a set of rules to help guide and empower your people with decision making. It is only when values are taken off the wall lived by all employees in word and action that you can say your organisation has a strong corporate culture. Reduced to its essence, culture = values x behaviour. In this week's HR Blog, we look at why it is important to ensure values and behaviours align, and culture is a lived experience not just a slogan.
What exactly does the phrase 'culture eats strategy' mean when it is applied in an organisational context?
In a very practical sense, you could say that no matter what goals your business is trying to achieve through your strategies or strategic plan, if your culture - the way we do things around here - doesn't support your people, and your people don't implement your strategies, then you won't achieve your goals. That might sound simplistic in theory, but in practice, it is a whole other equation.
Culture is a Double-Edged Sword
Your organisational culture has the potential to be either biggest enabler of strategy and business performance, or the primary obstacle to change and transformation. How you do things in your business either promotes or inhibits strategy and company performance. Chuck Schaeffer at CRM Search explains that culture determines the level of effort your people will dedicate to your business. A good gauge of your culture is to spend some time amongst your teams to understand how many of your employees are merely going through the motions and what percentage are fully invested and delivering their maximum contributions. The discretionary effort made available to the business through the maximum contribution of your employees is the single most influential factor in the capacity of your business to achieve its goals.
Schaeffer believes that unless you achieve a high performance growth culture, you will not be able to achieve your company's potential. You can throw as much money as you like at business strategies, operational initiatives, employee productivity and employee tenure. If your culture stinks though, productivity, impact and profit will remain at comparatively low levels, and permit any competitor with a high performance growth culture to outperform your company. A high performance growth culture is not easy to achieve, which is why those who do achieve, outperform those who do not. And this is why Schaeffer agrees that culture eats strategy for breakfast.
Drive Engagement to Enhance Culture
The connection between engagement and key business outcomes is measurable and undeniable. Gallup research has been tracking employee productivity for over 4 decades and has found that in comparison to workgroups with disengaged employees, engaged workgroups are 18% more productive, 16% more profitable, 12% better at engaging customers, 37% less prone to absenteeism and 27% less likely to be a source of inventory shrinkage.
A growth culture aligns leaders with staff, and strategy with actions via the conduit of good engagement. Culture is the backstop that guides employee performance. During times of challenge or change, employees will revert to what they know and default to how you do things around here - that is - culture. When strategy and culture are not aligned, staff defer to culture. In times of flux, transformation and disruption, culture is the fabric that will hold your organisation together and enable it to ride the waves of change.
That's why cultivating your culture consciously is critical to your success. Without this level of conscious stewardship, your culture could very well bring you undone. Here's why you need to double-down on your organisational culture:
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Cultures left to chance and weak cultures fail to align behaviours with strategy: At best, employees simply go through the motions. More often, employees operate as they always have, and irrespective of strategy.
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Culture is pervasive and perpetual: It starts slow but steadily advances like a flywheel to the point where it builds under its own momentum, and is difficult to slow down.
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Culture is democratised and empowering: Every person and team can make it what they want. Unlike strategy which comes from the top, culture can be defined near the coffee machine, in the company lunch room or wherever staff congregate or view the behaviours of others. Everybody contributes to culture.
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Culture is one of only four sustainable competitive advantages: While products, services and even strategies can be copied by competitors in increasingly shorter cycles, a high performance growth culture is not easily copied by your competitors or displaced by new technologies.
Culture by Design
According to Schaeffer, company culture is the single biggest untapped asset within most organisations. It is the channel through which you can boost staff productivity, employee tenure, company growth and profits. Think about that for a moment. That's nothing to do with FTE, advertising, product development, trade shows or anything you might want to simply 'throw more money at.' Culture should most definitely should not be left to chance. The challenge is to create your culture by design, which can be illustrates by the following six steps:
#1 is culture design: A company culture is thoughtfully defined by its ideology, which normally includes an identity, purpose, vision, values and behaviours.
#2 is to design the employee experience: This is an exercise in human development and the optimisation of talent. The employee experience is the employee's perception of his or her job and employer, based on the totality of experiences during their employment period. It's composed of four factors.
#3 is to create the manager experience, which includes the following:
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Advance the culture ideology.
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Advance the employee experience.
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Adopt high-performance culture vanguards.
#4 is to create the Customer Experience (CX): The CX is the customer's perception of the business, based on the totality of their interactions. Including the CX in the culture design is what advances a high-performance culture to a high-performance growth culture.
#5 is process alignment: or more specifically aligning the culture ideology with business processes and fixing or discarding business processes that are misaligned.
#6 is applying software technology: for task automation, process consistency, information reporting and scale.
Amy Rixon, chief brand, people & culture officer at ARQ Group, will be joining fellow panellists at the national HR Summit this year to discuss culture, with a focus on the following:
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Delivering the strategic, structural and program-level change agenda for business.
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Leading and executing talent management strategies that support cultural change.
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Providing leadership, support and direction for change initiatives.
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Empowering team members to drive change within the business.
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Ensuring that the culture continues to permeate through the organisation.
So, what’s Rixon’s one piece of advice to HR professionals on driving cultural change? “You cannot over-communicate and remember that ‘storytelling’ (as a skill) plays an important role in engaging at all levels: from board to front line employees.”
Discover more about culture on the HR Blog:
If the culture in your business is ripe for transformation, what can you do today to kick-start the evolutionary process? We've put together a White Paper the covers the fundamentals of culture change - simply click on the button below.
Image reference: Culture Radar from CRM Search culture POV
