Organizational culture more important than strategy

Organizational culture more important than strategy

Posted by Torben Rick | September 27, 2012 | Corporate Culture
Organizational culture more important than strategy

Culture vs. strategy – What’s more important?

The most important thing about culture is that it’s the only sustainable point of difference for any organization. Anyone can copy a strategy, but nobody can copy a culture.

What is strategy - Napoleon strategy

The best businesses are the ones that have a culture that links everyone together, no matter what department they’re in. And if employees become engaged with the company, the strategy is more likely to be “owned” by all and focused upon.

Organizational culture more important than strategy - The importance of organizational alignment

Corporate culture doesn’t just happen

If leaders weren’t already aware of the importance of culture then the Deutsche Bank situation has certainly brought it to light. Companies should be performance driven and values led. Many of the banks were simply performance driven.

Culture has to originate somewhere though. It doesn’t just happen. It is a leader’s responsibility to identify a cultural vision for the company, live and breathe it themselves, and then help to steer the rest of the company in the right direction. Culture comes directly from the behavior of the leaders, and it is their duty to involve and inspire the whole of the organization.

The rise of the “discerning customer” and the fragmentation of the media have made culture even more important. Anyone with a mobile phone and internet connection is now effectively a member of the paparazzi, a photographer and a blogger.

The culture of a company relies on there being a clear set of values, strong leadership and a sense of transparency and honesty between the company and the public. These factors will be the ones that differentiate your company in times of austerity and increased competition.

From the Booz & Company research “Why Culture Is Key.”:

Culture matters, enormously. Studies have shown again and again that there may be no more critical source of business success or failure than a company’s culture – it trumps strategy and leadership. That isn’t to say strategy doesn’t matter, but rather that the particular strategy a company employs will succeed only if it is supported by the appropriate cultural attributes.

Build a strong corporate culture

Of course strategy is important but this must be accompanied by a strong culture if lasting success is to be won.

Basic “building blocks” to build a strong culture:

  • Dynamic and engaged leadership – Know what’s going on at all levels of the organization
  • Living values – Rather than frame values in the conference room, model the values throughout the organization on a daily basis
  • Responsibility and accountability – Recognize employees’ talents and be clear about what they are responsible for
  • Celebrate success and failure Celebrate big and small victories, and make a point about learning from mistakes

Without culture, everything else cannot work

Without culture, everything else cannot work. Strategy will only succeed if it is supported by the appropriate cultural attributes.

 

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About The Author

Torben Rick

Experienced senior executive, both at a strategic and operational level, with strong track record in developing, driving and managing business improvement, development and change management. International experience from management positions in Denmark, Germany and Switzerland.

Blog Comments

In my opinion, yes, culture does reign – and it is set from the top.However, it also requires leaders to be true leaders, not followers. If the culture of the organization is one of “We have never done it like that”, holding on to past successes and not looking at change, their competitve advantage is lost, and the future unsteady. If the leadership of the company buys in to an attitude of “We do not need to change because everything is good”, particularly from those in mid level management. I suggest those “leaders” are not true leaders, and business will drive down the wrong path, at best only seeing mediocre financial results.For example, look at Kodak. Huge, widly respected company. Where are thry today? At one point, they put their hopes of coming out of bankruptcy by wanting to focus on large format printing. To emphasize your article, why was this thought to be a good strategy? Any mom amd pop shop printing company with a large format printer can do this today. So, the culture of “This is waht we have akways done” drove the company into turmoil – a company with the most patents on digital photography!As the article maintains, good leadership sets the tone of the culture, Seems so many companies today have forgotten that, while too many executives stay in their “castles” (often referred to as offices), and do not have a good grasp on the pulse of the organization – perhaps only listening to their direct reports, hoping the information they receive is correct. Good leaders need to be seen and heard by all in the organization for GOOD culture to ferment and grow. Help the people to be successful with new accomplishments they can be proud of, rather than simply holding on to old successes, which may be moot to business today! If the culture of the organization is one which lacks change, then competitors know how the company will act, bid, work, amd deliver – again, competitive advantage is lost.So YES, culture is greater than strategy, because that culture can drive the strategy – whether that cukture is driven by leadership, or the lack thereof.

the culture has become an integral part of any organisation, that the vision of the company and culture has be aligned properly, else…

Culture is the DNA of an organisation, it’s very essence; everything it is and everything it does. But unlike DNA we have the opportunity to change it.

The right mix of strategy and culture = business success. ( Strategy ) requires strong ( Culture ) to be in place

dstep1 I fully agree, dstep1!  Culture does drive strategy – at least, the functional strategy, as opposed to the formal strategy.  And leadership has a massive impact on culture.  It can drive it forward or take it totally off track.  It isn’t the only factor, but it is probably the most important one and the greatest influencer.  I do think that values are not the only drivers of culture – behaviours are a critical factor too.  I think that is implicit in Torben’s article, but it needs to be stated over and over again, as so many people point to poster on the wall when asked about corporate values.  They are just words.  It’s the behaviours that indicate whether or not those values hold, as well as many unwritten values.  For example, in one organization with which I worked as a consultant, they could not understand why their safety record was getting worse despite all the efforts – genuine ones – to improve safety.  Looking at it from the outside, it didn’t take me long to see that the managers promoted safety all the time, exhibited good behaviours (e.g focusing on root causes rather than pointing fingers), BUT…the unspoken, unacknowledged value of getting jobs done quickly, and the associated behaviours, overrode the safety values.  And people made mistakes, a good number of which created safety issues and incidents.

Culture is a strategic factor that can be manipulated in a variety of strategic initiatives. For example, creative people require a collaborative, flexible culture with supportive leaders. They will leave in droves if this requisite is denied them. To learn more about how to manipulate organizational culture to achieve strategic outcomes email Helen at [email protected]

I write my comment using the metaphor of the sail ship.
The strategy could be related to the setting of a course on the navigation map.
But once settled the target (long term goals) can be achieved only through a disciplined execution of the crew.
The execution can be settled through a proper organizational culture, possible by a strong leadership (the commander and his/her directly subordinated).
The strategy is the scheme to reach the goals, the execution are the actions and the culture could be related to the way by which the actions of the crew are inspired.
In the successful organizations the organizational culture is designed to encourage the people (crew) to express a high performance, making them directly responsible – besides the managers – for the company success.
Considering the above concepts, I retain strategy, organization, culture and execution as primary elements for the company’s success. The culture determines the mindset that permeates the organization and has certainly central role in the pursuit of success.
A good strategy drive to a failure if the execution is weak or unproper.
A poor strategy could drive the organization off course even with a good company culture. But how we could define good a culture related to a strategy ineffective with respect to the goal we want to reach?

The culture is the way of doing things in an organization It’s a belief. of doing things in certain way
Simple example   Cleaniness
Strategy is different subject .Based on compettive forces and market assumptions one is selecting a set of actions which he or she belive that it will give the desired results

The best strategy in the world won’t work if the culture doesn’t fit, but you can’t always fix the culture you way you ought to. Ultimately culture comes from personal values, and they are much harder to shift. The values of those at the top typically have the greatest influence on corporate culture (it travels downhill after all). So if your CEO sets the strategy but his culture needs fixing…

It is abundantly clear that foremost successful businesses and individual thrive on “routines” which are consistent with their goals-these routines are their business culture.Systems are good but people run the systems.Until there is a sync between values and strategies the system will collapse.

(Organizational) culture is for cowards!
Since the first time (now about 25 years ago) that I heard this term, I noticed that people gladly accuse the elusive “organizational culture” of being the sole cause of everything that goes wrong with and in an organisation; and that it is also the reason why “they” can do nothing about that!

So, instead, I suggest we all shut up about “culture” and no longer talk about strategy as if it were something that has to be carried out by others; and TAKE OUR OWN RESPONSIBILITIES!

‘Excelsior’!

The rise of the “discerning customer” is revealing companies’ cultures to a greater degree than ever before. Smiling, friendly front-line employees are a big plus, especially for B2C service firms, yet the execution of strategy often gets mucked up by less customer-focused ways of thinking and doing (i.e. culture), by all the employees company-wide (+ alliances) who are responsible for processes, policies, daily decision-making, and cross-functional hand-offs and communication. Execution (i.e. the “guiding” path) of the best-laid strategies is often the Achilles heel of intended progress, and in my observations, culture (the “driving path”, as you put it) is the Achilles heel of execution. Thanks for your excellent article.

As a number of you have pointed out, culture and values are linked and you are so right. Our personal values always exist in a relationship vis a vis our cultural values and as a consequence, to some degree are either in agreement with or are divergent from the prevailing norms.

Accepting that a culture is a well-defined social system that shares a set of common values, it is logical that having common values is a primary and critical element that serves to permit as well as promote any type of expectation, be it in a business or in a family. The more that there is a high degree of collective understandings of the good and what is considered constructive, the more likely the entity will be successful in achieving its objectives.

In my experience, the CEO or the elected official, is the primary determinant of what will be the driving normative value system. So, bottom-line, it is the executive’s or the political leader’s values is what sets the table, first. And if you need an example of this, look at our Navy Seals, Delta Force, Special Forces, etc. These organization exemplify what I have attempted to explain.

Thanks William for some GREAT comments and valid points

Culture is a way of life. Wherever we are culture deposit knowledge. experience, value & individual attitudes.

Interesting. Having the right culture means having the right people, including the leaders. This is true of achieving any given strategy, it can’t be done without the right people. Therefore, getting the right people is the key. It all starts with recruitment. Make your HR and recruitment the most important thing and all else will follow…

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