Is Your Corporate Culture Aligned With Your Strategy?

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."

Is Your Corporate Culture Aligned With Your Strategy?
If you think corporate culture change is hard, try to implement a business strategy (what you are trying to achieve) that is out of alignment with the current organizational culture (how stuff gets done).  Many leaders have found out the hard way that it simply can’t happen.  Is your corporate culture aligned with your strategy?

Why the Alignment of Strategy and Culture Matters for Your Business Performance

  • First, 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.
  • Secondly, Harvard Business School research reported an effective culture can account for up to half of the differential in performance between organizations in the same industry.
  • Lastly, a misaligned culture will eventually undermine your best strategic intentions.  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.

How to Change and Align Culture to Best Drive Strategy Forward
First it takes leaders who understand that a company’s culture 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 your…

  • Company be more focused on “risk mitigation” or “embracing risk” to best execute the strategy?
  • Culture foster a “market leader” or “market adopter” mentality to meet growth targets?
  • Decision-making be “centralized” or decentralized” to increase speed and performance?

These are all culture questions that can only be answered vis-à-vis a clear and compelling business strategy. Systems, practices and processes must align with the strategic intent to make sure they encourage, support and sustain desired actions and behaviors.

4 Steps to Ensure Your Corporate Culture is Aligned With Your Strategy
Here are four high-level steps to follow as you shape your corporate culture to align with and drive your business strategy forward:

1. Create a Clear Business Strategy
The first step is cultural alignment is to ensure that the people you expect to execute the strategy clearly understand it, believe it will be successful and think it will be implemented consistently across the company.  Because strategies must go through culture and people to be implemented, strategic ambiguity is the first roadblock to culture change.  Without strategic clarity, leaders stand little chance of shifting the cultural norms to accelerate the strategic priorities.

Too many leaders seek to change culture without a true strategic direction. This is a mistake if you want corporate culture aligned with your strategy.

2.  Understand Your Current Culture
Once your strategy is clear enough to move forward and before you shift your culture to better enable your strategy, you should first get a solid handle on “how things really get done and why they get done that way” in your current culture.  Assessing your current culture provides an accurate foundation to shift from.  Too many leaders confuse their current culture with their aspired culture.

Before you embark on culture change, have your employees tell you the truth about your workplace culture.

3.  Define the Desired Culture Required to Create Strategic Alignment
Once you understand your current culture, make a list of the cultural attributes that are required for your strategy to succeed and define the specific behaviors associated with them. Prioritize the one or two cultural shifts that will have the greatest impact on moving your strategy forward.  Then create a culture change plan to make them happen.

4.  Monitor and Reward Progress
When employees behave in a manner that is aligned with the culture required to execute your strategy, reward them and share your enthusiasm. When their behaviors are not aligned, let them know and help them to get on track.  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.

The Bottom Line
Corporate culture and strategy are inextricably connected.  If you want to outperform your peers, create a clear strategy, align your workplace culture with that strategy where it matters most and then create accountability and rewards to sustain the new way of doing things. Is your corporate culture aligned with your strategy?

To learn more about how to align your culture with your strategy, download How to Build a Purposeful and Aligned Corporate Culture.

 

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