Beware - Culture Eats Strategy for Lunch
This is a guest post from Dr. Linda Ford
You undoubtedly know that to make your business successful, you need to manage products, customers, and cash. But did you know that there is a fourth factor that can either support or undermine your work on the first three?
That fourth factor is organizational culture.
Culture is just “how we do things around here.” Pretty simple, right? The problem comes when “how we do things” doesn’t support the strategy and goals of the business.
The CEO of a software start-up had aggressive goals for growth. Things were on track. The creativity and innovation sparked by employees’ sense that all opinions were welcome helped fuel the growth and excitement in the company. However, as the company grew, that spirit of openness became both an asset and a liability.
Because there was such a strong commitment to openness, people were often hesitant to say “thanks, but no thanks” to new ideas. Time and energy were wasted on ideas that would ultimately dead-end, simply because no one was willing to say “no” to the idea.
Can the CEO tighten execution by focusing on the metrics associated with products, customers, and cash? To some extent. But the real leverage for change is in the fourth factor—culture. The CEO and his team saw that in addition to being open to ideas, they needed to ask for clear and explicit decisions and commitments. By managing the fourth factor, their results in the other three factors will be stronger.
This highlights one of the most powerful leverage points you have for managing culture—your behavior. If there are elements of “how we do things around here” that aren’t supporting your organization’s success, look at the behavior of your leadership team.
These are not necessarily glaring “management mistakes.” In the situation I described above, being open to ideas is a great leadership behavior. However, a strength that is carried too far or not balanced with other behaviors can become a weakness. This leadership team needed to see that their strong commitment to openness must be balanced by an equally strong commitment to closure.
A second leverage point for change is the systems in your organization. Your hiring process, performance reviews, compensation plan, and organizational structure all help create your culture. If your culture isn’t supporting your success, take a look at these systems. Ask yourself what kind of attitudes and behaviors these systems support. Then modify the systems to support the behaviors you want.
Culture change isn’t easy. It requires awareness and consistency of action. But culture can, and must, be managed just like products, customers, and cash. Culture—the fourth factor—can make or break your success with the other three.
Dr. Linda Ford has been helping companies manage the fourth factor for over 16 years as a consultant and professional speaker. She is the author of The Fourth Factor: Managing Corporate Culture. Download a sample chapter of the book at http://www.fourthfactoronline.com/the-fourth-factor-the-book-excerpts.htm
Related Stories
POSTED IN: guest posts
10 opinions for Beware - Culture Eats Strategy for Lunch
Michelle Malay Carter
Dec 3, 2007 at 5:49 am
Linda,
I agree with what you are saying here. And I would place the systems lever above the leadership behavior lever. Systems drive behavior - even those of the leaders.
Unfortunately, many executives haven’t made the connection between their broken people systems (selection, promotion, development) and the dysfunctional behavior those systems drive. I blogged about this here: http://www.missionmindedmanagement.com/systematically-poisoning-employee-engagement
We need to fix our systems not blame our people!! I’m OK. You’re OK. Let’s fix the system.
Regards,
Michelle
Mike King
Dec 3, 2007 at 6:42 am
Michelle, I was actually reminded of your post before your comment when I first read this one. I definitely agree with this post as well in that there really needs to be some cultural management. A lot of folks I talk to in other businesses seem to recognize the culture differences as they move from job to job but they never really put value to managing it and growing/encouraging a culture that best ties in with the strategies put into place.
There needs to be alignment in both directions and so managing the culture requires discussion about it, feedback to ALL individuals about their behavior and how the strategies put in place both require the culture to succeed and to re-enforce the real cultures those strategies can create themselves. Culture can not be ignored and hoped that it will align, its a systemic part of managing people and any business. Ignoring it has serious consequences, and doing so, is generally not going to help in fueling the business forward.
Karl Edwards
Dec 3, 2007 at 7:13 am
Culture change takes time.
That’s why your focus on leadership behavior is so helpful. A leader can choose to show up differently right away.
Without risking the whole store, a leader can experiment with change. And, over time, in fact be changing the organization’s culture.
Thank you for your work in this area.
Linda Ford
Dec 4, 2007 at 4:46 am
Michelle and Karl, you seem to be on opposite sides of the same coin. Michelle says we’re all doing fine, fix the system. Mike says a leader can show up differently without making major systems changes. My position on this is definitely “both and.” (See my posting on leadership and rules - http://www.fordbusinessconsulting.com/2007/10/leadership-its-not-about-rules.html.)
Culture is extremely powerful – it does whatever it wants to. That’s why I use the metaphor of the 800 pound Gorilla for culture. To change culture, we need systems that support the right behavior and strong leaders who can lead by example even with less than perfect systems. And, I’ll add that I believe that the informal systems are actually more powerful in shaping behavior – changing the Gorilla – than the formal ones are.
The informal systems such as what’s on our weekly staff meeting agenda and who the boss has coffee with are powerful behavior shapers and totally within the leader’s ability to change with her behavior. (Check out “Second Nature the Behaviors” in my book for more on this.)
Mike, you’ve pointed out an interesting irony in your post. We can all feel the differences in culture as we move from one organization to another. I had dinner last night with a leader from Penang. She had worked for Dell, AMD, and Intel, all in Penang. When we asked her to compare the cultures of those companies, her answers were just what someone in Silicon Valley would have said. In other words, those company cultures are so powerful that they transcend national cultural. She clearly experienced the differences.
Here’s the irony. We can all see what’s different, but we can’t figure out what to do about it. I think leaders ignore culture for three main reasons:
- They don’t see it as a powerful force in shaping their business results
- They don’t know how to manage or measure it, let alone change it
- They know (as Karl said) that culture change takes time and they are measured on quarter to quarter performance.
It’s a challenge!
Thanks for the conversation.
Linda
David Zinger
Dec 4, 2007 at 9:10 am
Linda,
Thank you for your post and comments on culture. We can take it so much for granted and fail to notice that we are surrounded by culture and we are part of that culture.
Some cultures remind me of bacterial cultures on a petrie dish in need of sterilization.
I work for about 30 organizations a year and it is interesting to me that you can walk into a building or even meet the people in a hotel meeting room and you get a feel for the culture almost instantly.
Yet, the longer you are in the culture the less you tend to notice it.
Thanks again for making us mindful of culture influences.
David
Miki
Dec 9, 2007 at 10:27 am
The idea that culture is absolutely critical to a company’s success is widely accepted these days, but with the average CEO tenure at 44 MONTHS (http://www.leadershipturn.com/leadership-development-disconnect/) there’s not a lot of time to influence it.
Linda Ford
Dec 11, 2007 at 3:52 pm
More great insights, David and Miki. Thanks!
Miki, I also regret the short CEO tenure of the current economy. And yet, I do think that 4 years is enough to influence culture. That job starts DAY 1, or even before as the prospective CEO interacts with the Board. Four years may not be enough for a total turn around of culture but it is enough to have a significant influence IF the attention, motivation, and skills are there.
Maybe the lack of attention to culture in the C-suite is related to David’s observation that when we are new to the organization (as a visitor or new employee), we see culture easily but those who have been around longer are like the fish trying to describe the water. “What water???” the fish says. “Culture - what culture???” the executive says.
As external change agents, we can sometimes serve the organization well by simply helping the executive see the culture and believe in his/her ability to influence it.
Oh, and one more thing. CEO’s are important to culture but ALL LEADERS can influence culture, regardless of their official role in the organization.
Miki
Dec 11, 2007 at 11:18 pm
Deciding to change the culture from day one, before even knowing whether it needs to change, is as much an error as immediately turing the entire senior staff with no knowledge of what talent is being lost.
I think that the days when culture was unrecognized are pretty much gone. Every exec I’ve ever talked with was very familiar with the existing culture, but that didn’t mean they agreed on what needed to change.
44 months is no time when measured in quarters and focused on cost cutting, vision, execution and saving one’s own skin.
links for December 1st through December 11th » jarango.com
Dec 12, 2007 at 9:12 am
[…] Beware – Culture Eats Strategy for Lunch » Slacker Manager – n […]
Gorillas and Office Politics: An Interview with Linda Ford
Jan 7, 2008 at 5:03 am
[…] Linda Ford shared Beware - Culture Eats Strategy for Lunch that created quite a flurry of comments. It was so interesting, I had to ask Linda a few questions […]
Have an opinion? Leave a comment: