Whilst I wouldn’t want to bet my house on Peter Drucker actually saying that “culture eats strategy for breakfast,” the quote attributed to him by former Ford CEO Mark Field has nonetheless become a fundamental part of the management lexicon in the past decade.
Or at least it has become a fundamental part of how we talk about management, for a recent report from Board Agenda, Mazars and INSEAD reveals that the vast majority of organisations do little but pay lip service to the notion of culture being of fundamental importance to the way they work.
The paper reveals that just 20% of directors believe they spend enough time on cultural issues, with 40% doubting whether their organisation values culture highly enough. What’s more, a third of the 450 executives surveyed for the report revealed that they were unclear on the alignment between the culture they desired, and the culture that actually existed. A paltry 5% thought that such a strong alignment existed.
Why culture matters
It probably stands to reason that if culture isn’t something that’s being discussed in the boardroom, then it’s not surprising that there is such a gap between what culture we want, and what we actually have.
“Much work remains to be done by boards to fully grasp this lesson and use it effectively in decision-making and for investors to properly assess it for the long term benefit of companies, their stakeholders and wider society,” the authors of the INSEAD report state.
The value of purpose was examined a few years ago by Deloitte in their Culture of Purpose report. Of the respondents who felt their company had a strong sense of purpose, an impressive 91% reported excellent financial results in the past year. Of those, 89% had a clear and distinct brand, with 94% delivering excellent customer satisfaction. The catch though, is that very few organisations actually had the ‘culture of purpose’ Deloitte were hunting for. It’s a recurring theme isn’t it?
Overcoming the culture gap
Given the value of a clear and distinct culture, what can we do to bridge that cultural gap? First and foremost, senior leaders need to be visible in the business and in doing so, personifying and being a role model of the desired culture. Research by James Kouzes and Barry Z. Posner, which forms the basis of The Leadership Challenge , found that credibility is the foundation of Leadership, which is why ‘Modelling the Way’ is one of the 5 Practices of Exemplary Leadership®. You can’t ask your people to behave in a way that is congruent with your articulated culture when you as a leader do something different. After all, people will follow what you do not what you say – words are cheap; actions count!
When working with leadership teams in designing a future organisational culture, toward the end of the phase of work when a string working draft has been prepared, we’ll complete an exercise to establish whether the team, both individually and collectively, are both intellectually and emotionally engaged and committed to the culture they are designing. This is so critical, as any slight disconnect will be obvious and immediately places the achievement of your desired culture in doubt.
This is something that we dive into in Chapter 3 of our book, ‘Building a Culture of Innovation – a practical framework for placing innovation at the core of your business’, but is also emphasised in the preface to the UK Code on Corporate Governance by the Financial Reporting Council. It’s hard to overstate the importance of getting the right tone set from the very top of the organisation.
Sadly, a recent paper from the CIPD highlighted how rare it is to get that kind of cultural leadership. It found that just 1 in 5 leaders regard themselves as ‘purposeful leaders’. It’s a misalignment that is all too often brushed under the carpet, no doubt in part because the difficulty such conversations represent. If you’re taking a seat around the top table however, you have a moral and ethical obligation to either be aligned with the culture, or choose to move on. For those that do break through this challenge, leadership teams reap the benefits in tapping into the extra performance and results potential benefiting customers, staff, the organisation and wider community.
Pervading the organisation
This principle of leading in a way that is consistent with the values and culture of the organisation is not just restricted to senior leaders though. The very same principles need to be applied through all levels of management. Whilst your people will look to senior leadership for guidance, on a day to day basis people will look to their immediate leader or manager for explicit and implicit guidance on what they should be doing, and in this context, the way.
What does being visible mean in this context? For me, one of the most critical things that leaders need to do is to ‘Engage in Conversation’, and there’s a reason I call it this rather than just communication. Far too often, leaders see communication as more of a broadcast ‘one way’ communication exercise – perhaps around the company strategy, a new initiative, some exciting news about big client wins or partnership deals etc.
In these instances the focus is always about imparting information to others. But effective communication is a two way exercise, it involves asking questions and listening. It means being engaging in your style and interested in what your people have to say. By actually ‘walking the floor’ and engaging in conversation with no other purpose than to find out what’s happening, you’ll be amazed at what you discover. Engaging in Conversation is also a powerful way of reinforcing your company values.
Take the TV series Undercover Boss for example. Going undercover at their own businesses with a view to seeing how the business runs from the other end, bosses are quite often surprised by employees who are acting as tremendous advocates (or otherwise) for the organisation. ‘Walking the floor’ doesn’t need to be literally – you can engage in conversation using a range collaboration and communication platforms like Wazoku, Yammer, and Slack.
What’s vital however is the way that you interact with your people is always clear, concise, consistent with your style and most importantly, congruent with your culture. Even if you’re just exploring what challenges people are experiencing or hurdles they are having to jump, the way that you ask the questions and the response you provide has to be consistent with the desired culture.