You have probably heard “culture eats strategy for breakfast.” The reality is that both are important. It is also true that even the best strategy is at risk if you don’t have the right culture.
As trends like the new world of work, increased mergers and acquisitions (M&A) activity in many industries, and business transformation continue, leaders need to be prepared to defend and, at times, reimagine organizational culture.
What is culture?
Culture determines how work gets done within an organization. It influences how people interact and communicate with each other. It also influences the traits and behaviours valued, rewarded, and reinforced through promotions, funding of initiatives, and other incentives.
Culture is often referred to as being like an iceberg. There are elements visible – or above the waterline – such as vision, mission, strategy, policies, and physical work environment. There are also elements that are less visible – like individual values or attitudes, informal power structures, relationships between people or teams, and the unwritten rules/norms of how things really get done.
Building a strong culture
To build strong cultures, organizations must first be clear on the behaviours that are required to achieve the desired culture. They must then broadly share those behaviours and ensure that they are constantly reinforced.
Next, organizations must get everyone involved in building or strengthening the culture. Many believe that senior leaders are responsible for culture. The reality is that there are many stakeholders who have an influence on corporate culture:
- Middle and frontline managers must model the desired behaviours and hold team members accountable for demonstrating them.
- Employees must be familiar with the values and behaviours and align personal actions.
- HR must ensure that policies, practices, and procedures across every stage of the employee life cycle – from recruitment and selection right through to off-boarding employees – reflect the desired culture.
- The board of directors must make decisions and govern risk in a way that aligns with the desired culture.
One of the biggest challenges that organizations face in a dynamic business environment is making sure that the various elements influencing culture remain aligned as things change or evolve.
What you do as an organization, the purpose and strategy, must be aligned with how you aspire to do things – for example, your processes and value. The less visible aspects of culture – like how work really gets done and what people value and believe – must also be aligned. Many organizations make the mistake of changing one dimension without making any effort to realign the others.
M&A and culture
There is no one-size-fits-all approach to building (or defending) culture during M&A activities. It all depends on the approach that the organizations involved plan to take.
- If the different entities involved in the transaction will remain separate, continue running independently, and retain their own cultures, very little needs to be done.
- When the acquiring organization plans to assimilate the organization being acquired, a significant amount of work will need to be done to ensure that the acquired employees understand and can adapt to the new culture. The acquiring organization also must ensure that the existing culture is not eroded as new colleagues are onboarded.
- If two organizations are coming together with the goal of establishing a completely new culture, each organization must start by defining its “as-is” culture. They can then create two roadmaps of what each organization will need to start, stop, or continue doing to achieve the new desired common culture.
Transformation and culture
When organizations go through transformation, there must be a plan in place to gradually evolve the culture as the transformation unfolds. Transformations typically take place over a period of 18 to 36 months. What the culture looks like at the beginning of the transformation will likely be vastly different than what it looks like at the end. At the beginning of a transformation, much of what an organization focuses on remains unchanged as they experiment and implement initiatives to get closer to the desired end state. The pace at which the culture transforms must match the pace of strategy and process change; otherwise, you end up with significant misalignment and dysfunction.
The new world of work and culture
Many leaders feel that the new world of work is one of the biggest threats corporate cultures have faced. Several trends impacting the world of work were already underway before the pandemic – the shift to the gig economy, the rise of the social and connected enterprise, the digitalization of everything, and the need to reskill everyone. The global health crisis accelerated many of those trends, resulting in a significant re-evaluation by employees as to what is important in life. This has resulted in misalignment. There is a growing disconnect between how organizations and senior leaders want work to get done and what employees now value and will commit to.
Strengthening the culture in the new world of work will take effort, flexibility, and focus. Organizations must find a balance between their needs and the needs of employees. New rituals that build culture regardless of where employees are located must be identified. Middle and frontline managers must focus on building culture in one-on-one employee and team interactions – it’s no longer just about large corporate events. It’s also more important than ever to emphasize shared purpose to ensure that employees feel connected to the organization even when they’re not working on the physical premises. Finally, learning how to better use technology to effectively communicate and collaborate will also help to protect culture.
Five key actions to build and defend your culture
There are five things that leaders can do to maintain positive cultures that support business strategy:
- Ensure that there is buy-in and commitment to the desired culture from both senior leaders and the board of directors.
- Continually look for and address signs of misalignment – with every business planning cycle, look at the various elements that contribute to culture and make sure they are in complete alignment. If they are not, identify action plans to achieve alignment.
- Make behavioural expectations clear, and personally model the ones you expect from others.
- Establish metrics to measure culture and report on them regularly.
- Hold people accountable. In a fast-paced world where workloads are significant, ignoring behaviours misaligned with culture can be tempting. Doing so can have significantly negative consequences that lead to culture becoming toxic.
For more insights on how to defend or transform your culture, please reach out to us anytime at firstname.lastname@example.org.
About the Author
Michelle Moore is the Managing Director at HORN. Michelle has over 25 years of global experience, working with organizations to use human capital to solve complex business challenges, and with individuals to maximize personal effectiveness and career success. She has expertise across a broad range of industries, and specialized knowledge regarding innovation and digital transformation.
We transform cultures and capabilities by better customizing solutions to the specific needs and context of our clients’ businesses and people. Our mission is to provide transformative organizational solutions and unforgettable personal learning that profoundly shifts how people think, work and lead.
For over 35 years, we’ve been catalysts in advancing the thinking, behavior and performance of thousands of leaders across six continents, 48 countries and every major industry. Learn more at www.horn.com.