CultureStrategyFit

We started our journey into the world of culture early in our careers when we were part of large organizations that launched new strategic initiatives with communications, training, people and structural changes. None of these approaches were sufficient to change the beliefs and behaviors that permeated these companies.

As strategy implementation consultants, we tried various approaches for organizational assessment over time, hoping to find the causal factors and levers for whole-system change more rapidly. We remained disappointed as these consumed significant amounts of client resource time in order to get substantive results. From this frustration came excitement when we realized that our research was revealing deep insights into the culture side of strategic change and that we had the potential to create efficient, effective tools and techniques for organizations to use to accelerate strategy implementation and improve performance. Now, with deep research into culture assessment and change behind us and a robust set of diagnostic tools, we are here to help you.

Being immersed in the current context of the organization, with all of its history and tradition, makes it difficult for people to identify different beliefs, behaviors and practices that will be required for a shift in strategic direction, new growth area or organizational life stage.

From our experience, when asked to describe an ideal culture, people inevitably list already well-developed organizational culture strengths and improvements to the downside of these strengths.

Asking people to identify an ideal culture is like asking a farmed fish to identify what's needed to live in the outside world when they are unaware of the practices needed for survival in the ocean.

We saw how difficult it is for people to describe an ideal culture when a client organization engaged in an initiative to identify this for its new strategy. The ideal culture they described would be amongst other things, professional and polite. A subsequent Culture-Strategy Fit Profile indicated that these attributes were exactly what the organization's culture strengths were, but that other culture attributes, quite different to the current culture, needed to be carefully introduced to deliver on a new brand promise. These new culture patterns were not part of the current organizational DNA and would need to be carefully introduced to overcome resistance generated by shifting system dynamics.

Consequently we avoid asking for ideal versus current reality comparisons in our culture surveys. We do however spend time with clients developing a model of the 'aspired to' culture that reflects delivery of new strategies and goals and which brings our research into culture patterns into play.

Some approaches to culture assessment provide results in terms of industry percentiles or quartiles. We believe that this approach fails to deliver the quality of information needed to break into new levels of performance and to create competitive advantage.

Industry norms are broad and include organizations with a wide range of sizes, strategies and contexts; the result is a ‘blended’ profile of an industry's culture which has little relevance for most organizations.

Industry norms do not take into account internal and external contextual factors that interact to create an organization's unique personality or organizational culture.

Industry norms do not account for strategies that are different or unique; different strategies often require different organizational cultures

Industry norms fail to define the ‘field of play’ for culture change the area where there is the greatest probability of sustained success

Consider our experience in assessing the culture-strategy fit of three similar-sized public relations firms. Each competed in exactly the same market but interestingly, each had different strategies and needs, from growth by acquisition to preparation for sale to niche marketing. While each firm had a high-performance culture to build on, their culture-strategy fit issues were dramatically different.

A significant body of research clearly indicates that organizational culture, and specifically the extent that it is aligned or not aligned with strategy, is the single most important factor in determining whether or not a strategy is successfully executed and performance goals achieved (i.e. Marks, 1999; Kotter & Heskett, 1992; Lee & Yu, 2004; Sorenson, 2002). Proofs of the long-term value of aligned, adaptive cultures can be seen in companies such as GE, Nucor, Nordstrom, United Parcel Service, Toyota and Intel and the ability of new entrants such as e-Bay and Starbucks to manage fast growth. Likewise the risks of allowing insularism, hubris and ‘noxious arrogance’ (as one writer observed) to run rampant and ethical foundations to weaken are in the press daily.

Seminal research was conducted by Harvard Business School over an eleven year period that found that organizations that focused on shaping their culture outperformed their counterparts significantly. For example, revenues were 4.1 times higher, stock price was 12.2 times higher, net income was 756% vs. 1% and return on investment was 15 times higher.

Increasingly, one of the most measurable areas of ROI beyond delivery of brand promise, share value retention, profitable growth and number of new products is the ability to attract and retain the best talent. Patagonia (Business Week, August 06) boasts over 900 applicants for every open position while Toyota has been reported as having 3000 for each open position at its new plants. When Four Seasons opened the Georges V Hotel in Paris, literally thousands of applicants thronged to the hotel in hopes of securing a position. The Four Seasons was able to select from the best in Paris to open its latest hotel several years ago.

Why is this so important? Beyond concerns about labor shortages, research has shown that top performers are not ten times or 100 times more productive than average performers but in many case 1000 times more productive. The Chief Technology Officer of Microsoft has stated that their top performers are assessed to be 10,000 times more productive than average performers. Creating the conditions for attracting and retaining them through culture alignment is an important benefit of culture work.

When Work, Infrastructure and Culture are aligned, an organization's DNA can be leveraged for sector leadership, whether you are in government, industry or not-for-profit. Culture is the missing link - and that's what we're here to help with!

While employee satisfaction surveys may reveal perceptions about pay, benefits, working conditions and other human resource practices and climate surveys may reveal how positively your employees feel about their jobs, their supervisors, their peers, workplace stress and flex work policies, our culture surveys are different. They uniquely focus on assessing the structure of practices and group norms of behavior, their dynamics and the implications for what must be accomplished. They provide a broader and deeper view that touches on climate and employee engagement, but exposes more about 'the way things get done around here'.

A culture pattern is the dynamic combination of social and operational norms and practices that is unique to each organization. Culture patterns are revealed by examining the interplay within and across dimensions or characteristics of organizational culture.

Using a metaphor from life sciences, culture patterns take organizational culture to the molecular level so that we can examine each element on its own and in combination with other elements and molecules. This tells us how an organizations culture is being lived or operationalized on a day-to-day basis. By understanding this dynamic, we are able to test for alignment to strategy, goal achievement and other desired outcomes.