Is Your Corporate Culture Aligned With Your Strategy?

Cartoon of a man trying to fly by flapping his arms and saying, "Once you're mastered this simple technique, we'll move on to something more challenging like trying to charge your corporate culture."

If you think corporate culture change is hard, try to implement a business strategy that is out of alignment with the organizational culture (how stuff gets done) that currently exists at your workplace.

Many leaders have found out the hard way that it simply can’t happen.

Why? Because an organization’s culture drives the behaviors of those employees you depend upon to execute your strategy. If those assumptions, beliefs and behaviors are not aligned with the activities and intentions that support your strategy, it will be tough sledding. Our organizational alignment research found that culture and strategy alignment account for 71% of the difference between high and low performing organizations in terms of revenue growth, profitability, employee engagement, customer loyalty and leadership effectiveness.

Talent, which accounts for 29% of the difference between high and low performing organizations when aligned with culture and strategy, is the third pillar required for peak performance.

To focus on corporate culture—one of the three critical alignment factors—for the time being, it is germane to wonder if it can in fact be changed at all. Though we agree with the cartoon that culture change is very challenging, we believe that, over time and with focused determination, you can shape your corporate culture to best drive your key strategic initiatives. We call this a “purposeful” culture. And it matters.

A recent Harvard Business School research report described how an effective culture can account for up to half of the differential in performance between organizations in the same business. Our own organizational alignment research further found that cultural factors account for up to 40% of the difference between high and low growth companies. Pretty persuasive statistics.

So how do you go about achieving organizational culture change to best drive your strategy forward?

First it takes leaders who understand that a company’s culture (defined as the way business truly gets done day-by-day) is not just about high performance but also takes into account aspects of company behavior that are uniquely relevant to the organization’s specific strategic goals. For example, should the company be focused more on “risk mitigation” or “embracing risk” to best execute the strategy?  Should the culture foster a “market leader” or “market adopter” mentality?  Should decision-making be “centralized” or decentralized”?  These are all questions that can only be answered vis-à-vis a clear and compelling strategy.

Once the needed culture has been defined to best execute the strategy, leaders must re-shape the current systems, practices and processes to align with the strategic intent to make sure they will encourage, support and sustain desired actions and behavioral change.

Then here are three steps to follow as you shape your corporate culture to drive your strategy forward:

  1. Define the desired cultural environment required to create strategic alignment.
    Make a list of the cultural attributes that are needed for your strategy to succeed and define the behaviors associated with them. If you have determined that you need greater cooperation between departments, better knowledge sharing would be a critical desired behavior. Then Sales and Marketing, for example, will need to improve their interdepartmental communications, foster open discussions, welcome questions and dialogue, share resources and commit to a common goal and aligned success metrics.
  2. Recognize and reward employees who exhibit desired cultural behaviors.
    Show your appreciation in a public forum with specific remarks about how that valued behavior contributes to the company goal. Perhaps Marketing noticed an uptick in interest in a competitor’s product. Instead of holding on to that information until the next quarterly meeting, they went to Sales so they could be prepared to discuss alternative solutions with their customers.
  3. Monitor and track daily behaviors.
    When your employees behave in a manner that is aligned with the environment you desire, share your enthusiasm for the change. When they are not, you may need to intervene with training or resources to make sure employees understand the importance of their role and are committed to changing for the betterment of all.

Whether you believe that corporate culture or strategy is more important does not really matter. What counts is that you understand that they are inextricably connected.

To learn more about defining an aligned and high performing culture, download How to Build a Purposeful and Aligned Corporate Culture.

 

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