Organizational Culture Can Be the Key to Implementing Strategy

Organizations have cultures in much the same way that nations do.  Organizational culture is multi-layered and complex, consisting of values, stories, language, practices, policies, rewards, structures and behaviors. It is created over time, often unintentionally, as a result of how the organization responds to external events and how it behaves internally.

What does culture have to do with strategy?

Successful strategies are clear and focused on a few key priorities or strategic intents, e.g. Wal-Mart’s focus on just-in-time inventory or Google’s intent to continuously innovate.  Implementing these strategies requires that every individual’s performance be consistent with the priority.  At Google, every associate must have the resources, support and capabilities to perform the tasks associated with innovation, and know that he or she will be rewarded accordingly.  There should be no obstacles or disincentives for the desired behavior.

This may seem like common sense. However, we find that in many organizations, practices, policies and behaviors are at odds with strategy.  Frequently, rewards and consequences are out of line with what is or should be expected, resulting in confusion or disbelief that the strategic intent is real.  If an organization decides that its’ winning strategy must include excellent customer service but employees are rewarded for spending the least amount of time possible on the phone with customers, it will be difficult to successfully implement the strategy.

Can culture be changed?

Because culture develops over time and often operates at an unconscious level, it can be difficult to change.  It is first necessary to make this implicit set of beliefs and behaviors explicit by doing an assessment of how the organization currently operates.  In fact, this first step can have a dramatic impact all by itself.  Once the current culture is understood, it becomes relatively easy to determine what a culture consistent with the chosen strategy would look like and what needs to be different

Fortunately, culture is never completely static. It evolves continuously based on day to day actions and decisions.  The greatest challenge in changing culture to fit strategy is acknowledging the need for change.  The next step is clearly and consistently communicating what the desired culture is and asking everyone to participate in defining their role in bringing it about.