One company that suffered the fallout of the strategy/culture collision is Kodak.
Kodak was not ambivalent about changing times, making repeated strong statements about where they needed to go, yet they didn’t appear prepared to steer their corporate cultures in that direction. Kodak’s downfall was blamed on its inability to make the leap to digital media, but Kodak had been positioning itself as a digital imaging company for more than a decade. Why was it unsuccessful? At its core, Kodak was a chemical company whose culture embraced film coatings and processing. When digital media came along, Kodak re-branded itself as a digital imaging company, but the move took it further away from its roots, and company culture could not adapt quickly enough according to many articles written in the last 12 months. The likely re-financing of Kodak and the sale of its patents and all or part of its document imaging and personalised imaging services likely means that a restructured Kodak would largely focus on commercial imaging, rather than the consumer business. I’m not convinced that this will be the end of their troubles.
Another, even more recent example, is the demise of Comet. Alongside Like Argos, JJB and Habitat, which have also announced closures of many high street stores in the last year, management continued to focus on the high street sales and not moved quickly or effectively to online sales and / or repositioning of its brand. Comet had a great brand and could have developed a strong presence online but did not execute an effective strategy to change its business model and culture with pace.
Conversely, Amazon has grown from the world’s largest book-store into the world’s largest retailer, and is now extending its brand to hardware (the Kindle family of devices) as well as enterprise cloud computing and storage. Since it began, Amazon’s brand strategy and organisational culture have always been aligned with customer satisfaction, scale, and delivery. This enables them to remain a global player, even in changing economic conditions.
There are also business commentators and writers that argue either Strategy is more important than Culture or vice versa. From my experience, I would argue that you absolutely require both in equal measure to build a sustainable, successful and profitable organisation giving great service to its customers.
In their book, “Execution – The discipline of getting things done” Larry Bossidy & Ram Charan say:
“When companies fail to deliver on their promises, the most frequent explanation is that the CEO’s strategy was wrong. But the strategy by itself is often not the cause. Strategies most often fail because they aren’t executed well. Things that are supposed to happen, don’t happen. Either the organisations aren’t capable of making them happen, or the leaders of the business misjudge the challenges their companies face in the business environment or both.”
If the corporate culture is incompatible with business strategy, objectives will not be met. Before changing the corporation’s strategic direction, top management should be prepared to reshape the organisation culture to fit the new strategy.
How do you ensure that these key strands are aligned?
What is your organisation’s culture?
Culture is an expression that suffers from a vague and loose set of definitions, often used conversationally to mean a myriad of things. Numerous business articles and papers refer to corporate culture in fairly simplistic ways, suggesting that it needs to be changed, without bothering to define what the “it” really is.
The more comprehensive our understanding of ‘it’, the greater the likelihood we can factor in culture’s impact on our organisations, and the greater the likelihood that leaders and others can anticipate its consequences.
1. Ask questions of your Leadership Team, your middle managers and your wider organisation
Start at the top and ask yourself some pretty basic, but fundamental questions. Some example questions might be:
a. Why is our organisation here? What do we do and how do we do it? A simple question I know, but I’m willing to wager that you get different answers from those you ask.
b. What are our personal values and those of the organisation? Don’t be afraid to dig beneath the surface. Keep asking the question ‘what else?’ to get to your core values.
c. What are we famous for?
d. Do our values and what we’re known for align with the strategy we have for our business today?
e. How is the organisation structured and which functions tend to ‘lead’ the organisation today?
f. What are the things stopping us from being a ‘Great’ organisation?
Once you have some clear AND agreed answers to these questions test them out with your wider organisation through a combination of surveys, face to face workshops and 121’s with key influencers within the organisation; by influencers I mean people at any level of the organisation that have significant positive OR negative impact with their peers or wider teams.
2. Analyse the results and refine or rework
Spend time analysing your results. Does the wider organisation agree with the Leadership Team on these key questions? You may get some different views! If you do, then you may have a bigger issue and a bigger hill to climb if you want to be successful. Dismiss this feedback at your peril.
Be prepared to go back to the drawing board if your Leadership Team’s answers are completely different to your employees. If there are broad and significant differences I would suggest bringing in a cross-section of people from across your organisation to work on it with you – These could become Change Agents you will need for the next stage of the process.
3. Agree on who you are, what you stand for and why you’re here
Hopefully after a few refinements or a rework or two, you have got to a point where the Leadership Team, your management and a cross-section of your organisation have agreement on your culture, your values and how it is aligned or not with your strategy.
What does the culture of your organisation need to be to ensure execution of your strategy?
Now that you have a good view of how your organisation’s culture looks today, think about how you want the organisation’s culture to look, if everything were to be correctly aligned, and if you were to have the ideal culture that you know will support you in the execution of your strategy.
Using the same people and questioning process build up a view of what the future organisation looks like.
What needs to change – People, Process, System, Measurement & Behaviours?
Identify the differences between the today’s culture and tomorrow’s. Considering the organisation’s strategic aims, objectives and deliverables:
- What cultural strengths have been highlighted by your analysis of the current culture that need to remain and grow?
- What factors are hindering your strategy or are misaligned with one another?
- What factors are detrimental to the success of your strategy?
- Which factors do you need to change?
- What new beliefs and behaviours do you need to promote?
Plan, Prioritise, Execute and Measure
Using your ‘change team’ that you have built up over the previous steps start to build up your plan of attack. Under the headings of People, Process, System, Measurement and Behaviours list out the initiatives and sub-initiatives required to affect the necessary change required to meet and beat your strategic goals. You might find a download of the ‘The Need for Speed ~ Driving Pace in Your Organisation‘ series useful to help you.
Finally I would suggest 3 areas of focus to ensure that you succeed in aligning your Strategy AND Culture:
1. Executive Sponsorship – Build a coalition of top leaders focused on a set of culture priorities that are meaningful and important to the organisation, their own group and to themselves personally. Without this commitment, passion and belief from the top, your change initiatives have a high probability of failure.
2. Cross-Functional Team – Engage senior and middle management in making changes to cross-functional processes to introduce more aligned behaviours and values. Build cross-functional teams to assess impact and learn together. Demonstrate success early. Again, ensure that people are fully engaged in the reasons ‘why’ the organisation needs to change and ensure that you get the most passionate people involved in the project.
3. Create momentum – by engaging more and more people, especially managers and supervisors, in shaping culture by design. Build capability. Create organisational energy by creating new ‘heroes’ and quick wins. Build in feedback loops for continuous learning.
As ever, would love to get your feedback….