‘An organisational culture is one of the most important competitive advantages. And company culture really does eat strategy for breakfast.’
An organisational culture is one of the most important competitive advantages. In my opinion, it is more important than a solid strategy; with a great strategy but a weak, unhealthy culture, you could be in trouble and potentially won’t be able to execute the strategy. With the right culture, you might not have a strategy (for example because you are at the point where you need to pivot your business), but you should be able to build one pretty soon! Your competitors can copy your strategy, but they can’t copy the culture of your company.
If you are not sure what I mean, (or what I don’t mean) when I say “organisational culture/company culture/corporate culture”, please read this article: Organisational Culture – The immune system of your company.
In your computer, you have a hard disk, processor, graphics card, RAM memory etc. You can choose the computer’s configuration to the tasks which you want to perform with it. It’s important to remember that the configuration of the computer will be very different depending on what you need it for; are you going to use it to send e-mails and write documents? Or do you need it as a graphic designer workstation, or to have a server hosting your company’s infrastructure? Regardless of what your hardware looks like and what tasks you want to achieve (goals), one more element is missing: software.
A computer with poor quality, unconfigured, or simple not right software will not work properly – there will be a lot of errors, blue screens, data will disappear, viruses will be caught, and so on. With the wrong software, you won’t be able to generate the value you need (you can have a great graphics card, but without a 3d program you will not generate a computer animation).
Think for a moment, of your organisation as a computer. Strategy is hardware. If you want to build a local company that performs typical services (a goal), your strategy (the way you do business, the elements which you need to have in your business to reach the goal) will be completely different to if you wanted to create a niche company providing premium value to premium customers. And yet, this could be another way in which you aspire to build a true mass market company. Compare this to your computer, when you decided for what purpose you needed it (a goal), and then you chose the right hardware configuration (the elements which you need to be able to fulfill the purpose). In different scenarios, a computer’s configuration will vary.
An organisational culture is software. To be able to execute different strategies, you might need different cultures. Imagine how varied the culture is in a brain surgery unit, where one of the key values is accuracy, and there is little space for mistakes. Compare this to a key value of a creative agency (where accuracy and need for working flawlessly are not even considered). Depending on what your organisation is, or what it has to be, it must have an appropriate organisational culture, otherwise the ability to execute your strategy will be limited or even lost.
Again, when we apply this to your computer, you decided for what purpose you wanted to have a computer, you chose the right hardware, and then the software to complete what you needed. Without this process, you wouldn’t be able to use the computer for your chosen purpose/s.
The effectiveness of this metaphor in relation to reality is somewhat limited. You can buy the software, you can install it, and with a little bit of luck and effort, (e.g. regular updates) you can have it for years.
An organisational culture can’t be bought. You can try to build it, but this is a long process. You can’t completely control it either. Moreover, if you stop nurturing it, culture immediately evolves in its own way. If you don’t consciously approach the cultural aspect, culture will just happen. And it may be far away from what you really need.
‘Your competitors can copy your strategy, but they can’t copy the culture of your company.’
I think this is a good time to define common assumptions, which I call values. Values are the foundation of an organisational culture. In my opinion, it’s crucial to be able to not only define it, but also to decide how the values will be developed into the practice of the organisation, as well as how the values will be promoted amongst a team.
Let me give you a little case study – to show you the true power of values, and their impact on culture.
I was working with a small team, where one of the issues was passivity. Passivity was combined with active avoidance of taken responsibilities. I recognised quite quickly, that the reason for this situation, was a previous manager’s leadership style – he was a guy who played a role as a person who knows everything, is always right and never makes mistakes. The team was a bit scared, and people came to me with every single issue to ask me for an answer. I observed that they were used to a culture where it didn’t matter what they did, if the results were not good, they would be blamed for it (so they preferred to do nothing, unless they really had to).
I quickly recognised that I needed to start promoting two values: responsibility for actions and proactivity.
I set up regular team meetings where we had a chance to discuss and refresh the structure (duties, responsibilities and processes). I had a chance to ensure that the team was competent enough and they were equipped to fulfill the roles. Also, we made a contract that if any team member saw a potential issue, they were to tell others about it (and we decided how and when that should happen). This first meeting improved the team’s mood a bit, but I did not observe any changes in behaviour at all.
So, when people came to ask me for a decision as usual, every time, I gave them following questions:
Is it a typical action/decision? If this is typical, who is responsible for an action/decision? (usually that was the person who came to me with an issue). What is the typical action which should be taken (for example described by a process)? What is the potential outcome of this action (are you happy about it)? Having these answers given, the final question was: What are you going to do now?
When people came to me for the 2nd or 3rd time with very similar issues, the answer was: „hey, you know how to deal with it, don’t you? Have a seat, think about it and tell me what you are going to do. This is your responsibility and I know you can make a good decision”. After about a month, people started to fulfil their duties more independently.
In the mean time, in meetings, I provided feedback to support more independent people. We also discussed what it means to be proactive, how it works in different situations and what the pros and cons were. However, I couldn’t help them be more proactive. They didn’t raise potential issues and they avoided taking actions in relation to unusual problems.
Fast forward one month. I had a day with meetings outwith the company, so I wasn’t available. That day, the team dealt with a challenging customer, who had an emerging problem (which was very untypical). As it turned out later, nobody wanted to take any action. Finally one of the team members decided to try, and under high levels of stress, made a decision. It was probably not the best decision to make, so the problem wasn’t really solved and our challenging customer wasn’t happy about it.
The next day, when I arrived at the company, I knew something had happened. People were literally frozen, and it took me a while to recognise what was going on. I suppose they were scared that they would be blamed for the unhappy customer (later on I had a conversation with the person, and we worked out a more reasonable solution).
I had in my mind, a set of values which I was promoting, and I decided to use this incident as an opportunity for team development. From my perspective, the most important thing was that somebody finally took action (be more proactive), even if the final result was not ideal. The person who took the action was praised for making an attempt. I remember the true shock of team members when I made this point. This was a pivotal moment. From that time onwards, people started to be more proactive. That really was the beginning of a journey in building a team’s capacity to be proactive.
And I knew we were on the right path when some time later, I observed a team member speaking to a new employee who had ignored a potential issue. He told to him: „Look, this is not the way we work here, if you see a potential problem, you need to do something about it – solve it if you can, or speak with others -at least.„
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