The Culture vs Strategy Debate

How do some companies evolve to “it company” status while others languish in relative obscurity? Whether you think of more mature companies like Google, Bridgewater Associates or Unilever, or early stage marvels like Warby Parker, Vendini, or RevZilla, the hottest companies on the planet understand it’s not what they do or how they do it, but why they do what they do that defines who they are as an organisation. Put simply, company culture is the real competitive advantage great organisations trade on.

The “X” Factor Defined

Great Culture – it’s that ethereal “X” factor every organisation strives to attain, but few achieve. It’s often talked about, but rarely understood. Culture is, in fact, more than a buzzword – it’s the very lifeblood of an organisation. Culture is what develops and sustains an enterprise. Every organisation has a culture. The question CEOs must ask of themselves is do they have the culture they need? Culture must be more than an afterthought – it must be intentional, purposed, and created by design, not by default.

Viewing Culture Through The Right Lens

Culture – it’s less about structure and more about values, vision, talent, behaviours and a shared purpose. When you think culture, think open and collaborative, not proprietary, adaptive, not static, actionable, not theoretical, and progressive, not regressive. Above all, think shared, cohesive, and simple. So why do so many organisations get culture wrong? They copy instead of create, they fail to understand that people, context, and purpose matter, and they don’t have the resources to truly manage the rigor associated with aligning the business of culture with the execution of strategic imperatives.

Few will argue about the importance of culture, but vehement disagreements arise when you talk about the proper frameworks and constructs needed to create the right culture. Let me attempt to put an end to the silliness of these petty debates. Smart leaders don’t confuse fads and trends with culture. They realise that culture (at least a sustainable one) consists of more than ping-pong tables and free food. The key to culture is found in what can be referred to as creating a culture of leadership.

Getting Traction

Stop creating a false premise that strategy and culture are in competition with one another by refusing to engage in the strategy versus culture debate. It’s not strategy or culture, but strategy and culture. Clearly, culture should be a core element of strategy, and while it’s important to understand that the vision for culture might be set by the tone at the top, the best cultures are not mandated or imposed on people; they are co-created by the people – people are the culture. The secret sauce to culture is leadership collaboration. The point at which your entire workforce not only sees themselves as leaders but are empowered to think and act like leaders is when cultural transformation has taken root. The simplest method of empowering employees to take hold of decision-making is to put the tools at their disposal to actively address the risks they see within the business framework (and the external risks that may have an impact – adverse or beneficial – on the business) and to feel they have an ‘ownership’ component which extends to change recommendations being valued.

It Boils Down To Leadership

Nothing inspires change and innovation like great leadership, and likewise, there is no more costly legacy system to maintain than poor leadership. Put simply, the greatest testimony to the power of real leadership is what happens in its absence – very little.

A culture of leadership replaces rigid frameworks with loose communities of collaborative networks. Complex decisions are not reserved for someone sitting atop a hierarchical structure but are driven down and across the organisation to unleash new levels of engagement and productivity. The best way to create a culture of leadership is to value and reward authentic and effective leadership. Create a culture based upon an ethos that empowers, attracts, differentiates, and sustains. The only culture that flourishes over the long haul is a culture of leadership.

Maintain the rage

To reinforce the ‘culture of leadership’, I have no doubt we have all witnessed or been a part of an organisation where, for a period, the culture was truly aligned with the strategy and the organisation was firing on all cylinders. But then something disruptive occurs -whether it is a change in leadership team, a merger or disposal – but the culture is impacted in a fashion that results in a loss of corporate momentum. Now, proper foresight and planning could have (indeed should have!) managed the potential impact of a shift in momentum – but the cultural impacts are not always front of mind during the theatrics and rush to “do a deal”. A clearly enunciated and communicated program of work can lessen the adverse impact on the cultural execution of the enterprise’s strategic focus – and as noted previously, where there is ownership of decision-making outside the leadership level, then the impact of change has the potential to be lessened. But it takes a truly great and insightful leader- be they Board or C Suite – to achieve the necessary level of alignment between change – whether generated through internal alterations or externally delivered change – being considered as an opportunity to leverage a greater product or service.

So how can you measure the success of the execution of culture?

The ethereal “X” Factor that reflects how culture looks and feels is not like the TV talent show – to complete a diagnosis takes time and an understanding of the components that make up a viable and effective culture. It is a little bit like the opening address from the barrister in that wonderful Australian movie ” The Castle” where he hung everything on ” It’s the vibe, your honour”. So too is the culture within your organisation- it’s a sense of the level of support of the message from management on what are the expected and required behaviours.

Culture Risk Diagnostic – the starting point

Governance Worx has teamed up with The Indelible Link to create a diagnostic service aimed at identifying for business leaders a clear and succinct outline of the behaviours your various stakeholders are demanding from your organisation and the level of alignment between these demands and the actual behaviours that exist across the operational levels of the organisation. Our goal is to help you package these stakeholder obligations into a single coherent message that focuses on how culture can improve the commercial performance of your business.

If you would like to know more about this Diagnostic service contact Philip Anthon Managing Director of Governance Worx on 0429 877470 to discuss how we can help align your strategy and culture.