Part I: Organisational Structures & Culture
It should not be new that culture cannot be forced and created. Nor should it be that culture cannot be fully delegated. But how does one then manage to establish a culture in which employees feel comfortable and engaged on the one hand, but on the other hand also make the company successful and open to continuous change?
This is the first part of the series 'Nutrient-Poor Soil', covering organisational and cultural aspects that need to change to cope with ubiquitous changes. If you haven't done it yet, take a look at the introduction to get more context and general information.
Culture, Strategy & Structures
As described in a previous article, is culture basically the sum of behaviours practised by leadership, teams, and individuals. Purpose, values, and vision are essential ingredients to let employees jointly strive towards a goal. It's not a nice-to-have but mandatory to remain relevant in the long run. However, even if those elements are clearly defined and communicated, they are often not translated into action. Like lip services.
Here the leadership level is crucial because employees tend to reflect the mindset and attitude of leaders. In other words, if one as a leader doesn't behave as one would like others do, how can one expect it in the end? What signal does this send? Is he/she somehow different from the others? Thus, it promotes a 'them & us' culture, a loss of trust in leadership and a waste of resources. Just this week I read a 'Picard Management Tip' on this topic which fits perfectly and should appeal especially to the older generations: 'The crew looks to you for how to behave. Set the tone for your ship.'.
Culture development is about building into the lives of others so that they build into the business. Donavon Roberson
Mindsets, attitudes and management styles set the basis for culture, but organisational structures have a strong influence on these. Unnecessary hierarchies and structures hinder performance by preventing fast interactions across team and department boundaries. Therefore, work thoughtfully on these performance killers and keep in mind that also the context & structures must embody collaboration and fast changes.
I mentioned some time ago that in my ideal company the founders are still actively involved. Besides the founder spirit and the inspiring style, there is a special reason for this. It is that the founders are more often aligned with each other and with the vision than externally hired ones. This alignment is of great importance for the successful establishing or transformation of a culture. Furthermore, the focus is different. I often observe that profitability is prioritised over culture. The fundamental mistake is to consider both as being independent. Clearly communicated visions, a shared sense of purpose and a healthy culture can remove many obstacles and result in increased success. More revenue, stronger growth, better customer satisfaction, higher engagement. This link is proven several times1,2,3. In other words, it is possible to prioritise culture while motivating more people without losing sight of profit.
It's not only profit but more generally the strategy that rivals culture. This might be due to statements like Peter Drucker's that culture eats strategy for breakfast. I fully agree that one should not ignore culture and focus solely on strategy, especially since there are direct correlations between healthy culture and the bottom line. But neither a good culture nor a good strategy can set you apart these days on its own. For successful transformations but also strategy execution excellence it is vital that the triple 'strategy, objectives, and activities' is aligned with that of 'culture, values, and behaviours'. It helps to adapt faster and more agile to changing conditions and thus to achieve goals faster, better and possibly even with less effort.
Affected companies might need a sort of Culture & Innovation Evangelist to build a knowledge network with all the other evangelists and thought leaders out there. While such evangelists in the US usually spread the innovative management styles and culture externally to inspire others, some might be needed here as an inward interface. Those share the externally gained knowledge within the company with all employees and executives. Those initiatives raise awareness that and how something needs to change. This implies evangelists not only keeping up to date with best practices but also being competent in identifying and solving such issues with approaches that fit the company. Personally, I see immense potential in re-inspiring not only employees but also execs.
There is a reason why it's called cultural and not strategic DNA: culture defines who you are and makes you unique.
Of course, culture can also be influenced by employees. Attempts can be made not to reflect negative behaviour, to live the values of the company independently and to make use of one's own influence to change things positively. But in the end, an inspiring and energetic leader has a disproportionately high impact on culture and people.
Look out, though! Bringing the actual culture into line with the desired culture should not be considered an one-time effort. Consistent work is needed because even after seeming successes, the subsequent honeymoon period, and the initial enthusiasm, old behaviours come back faster than one might think. When a wrong culture meets transformation, dissatisfied employees, confusion and even political conflicts emerge.
To me personally, a healthy and vibrant culture is key to a high level of employee engagement — after all, it is part of the Employee Experience Model — and to get the business figures right in the medium term. For this to happen, one has to be aware of the importance of the cultural & organisational DNA, but also of one's origins and vision. This needs consistent work on culture since the target is constantly changing as well. Even if it may cost some resources, the investment will pay off sooner or later.
Cultivating the culture of a company is like raising a bonsai: it needs constant care and plenty of resources.
Nevertheless, the alignment and balance with structures and strategy should not be underestimated. If we consider this construct a triangle, this quickly gets clear, as equilateral triangles are the most stable form. Leadership has a substantial impact on all three elements and therefore sits in the driver's seat.
- Why Purpose Is The Next Competitive Advantage, Caroline Castrillon↩
- The Future of Business? Purpose, Not Just Profit, Antonio Zappulla↩
- Can a Purpose, Beyond Profit, Really Drive Results and Long-term Value?, EY Global↩