Culture is typically described as the “values and belief characteristics” of an organization, as exhibited by the stated and unstated rules and expectations with respect to the behaviors and actions. Put simply, it’s “how things get done here”.
Might not be 100% complete, but a quick scan and high-level affinity of the corporate values of several large global organizations led me to few key repeated terms (and / or their synonyms) – Customer Focus, Employee Focus, Excellence, Innovation, Teamwork, Respect, Integrity, and Responsibility. So, basically – all organizations seem to / aspire to follow the same / similar set of behaviors. And, on the face value – all these values can certainly be considered universal, relevant and prudent.
BUT….There are a few problems
Per a recent Deloitte’s Human Capital Trends Report, only 12% of the survey participants believed that they “understand their organizational culture”.
Gallup’s recent survey revealed that only 23% of the respondents strongly agree that they “can apply their organizational values” to their everyday work, and only 27% strongly agree that they “believe in their organizational values”.
The above two data points represent what is often called out as a weak culture. In contrast, strong culture is said to exist where organizational resources respond to a stimulus primarily because of their alignment to organizational values. In such environments, culture acts like an immune system and helps the firm operate like a well-oiled machine, engaging in outstanding execution with only minor adjustments to existing procedures as needed. Conversely, in a weak culture control must be exercised through extensive procedures and bureaucracy. In such instances, there are co-existing and different, (or at times infact conflicting) “sub-cultures” across individual business units, functions, geographies and even teams.
To make things even more difficult, several organizations are discovering and realizing that their current culture is not completely (or infact only partially aligned) to the “new” strategic priorities.
Per one of McKinsey’s recent survey focused on the topic of Digital, 33% (largest population) of the respondents stated culture being the most significant challenge to meeting digital priorities. Contrast this with only 13% of the survey respondents highlighting lack of senior support as a concern!.
So, a set of behaviors and ways of working which were potentially deemed right in the past, aren’t fit for purpose and good enough to enable the organization to survive and grow in the new environment. The tagline of having a “high performance culture” might be still apt at a generic level, but the underlying levers and desired values have changed. Also, what might be relevant in a specific industry might not be meaningful for your industry landscape, or perhaps your specific organization in a specific industry. For e.g. in the banking industry, since the dawn of financial crisis – the strategic priorities and henceforth the desired culture has been one of compliance and efficiency. But, as more and more banks have been realizing, the future organizational strategy needs to be pivoted on being customer-centric and innovative. And, the context of banks is not an exception BUT a rule.
It’s not a surprise that Peter Drucker said – “Culture eats strategy for breakfast”. So, let’s not underestimate the power of culture. And, it’s not word-smithing (which I often notice is a chosen course of action) which will take you to the future state, but a real shift.
Every established organization across industries is faced with the new VUCA (volatile, uncertain, complex and ambiguous) world, and the rapidly evolving environment has demanded fundamental review of and changes in the business strategy and business models. This current era also calls for organizations and leadership need to focus (if already not doing so), on addressing four fundamental questions:
Do we really know what our “real” current organizational culture is?
How well is our current organizational culture aligned to our strategic priorities, and hence what needs to be the desired culture?
How much is the gap between our current culture vs. desired future state culture?
How do we enable people across the organization live the future state values?
Indeed, there’s no abracadabra and magic wand which would make the much needed culture change and transformation happen, but focusing on culture is a good beginning point. Changing culture is perhaps the most difficult leadership task, a holy grail of change management. But, organizations and leadership don’t really have a choice (except for becoming extinct).
So, do start now. Tomorrow may be late.
Originally published on linkedin, 25.09.2018