When Cultures and Strategy Clash

Jon Katzenback recently co-authored an article in Strategy and Business entitled 'Stop blaming your culture' which looked at the issues of implementing new strategies and how this is best done by recognising and leveraging the cultural characteristics which make an organisation distinctive 

An organisation’s culture can be defined as the set of deeply embedded, self-reinforcing behaviours, beliefs, and mind-sets that determine “how we do things around here.” People within an organisational culture share a tacit understanding of the way the world works, their place in it, the informal and formal dimensions of their workplace, and the value of their actions. Though it seems intangible, the culture has a substantial influence on everyday actions and on performance.

Organisational cultures don’t change very quickly. Therefore, if you are seeking change in your company or institution, you are most likely to succeed using your existing culture to help you change the behaviours that matter most. Bit by bit, as these new behaviours prove their value through business results, the culture you have can evolve into the culture you need.

When a new leader’s strategy puts the culture of a company at risk, the culture will trump the strategy, almost every time. There are good reasons for this. Every company’s identity — the body of capabilities and practices that distinguish it and make it effective — is grounded in the way people think and behave. Deeply embedded cultural influences tend to persist; they change far more slowly than marketplace factors, and cause significant morale problems when not addressed effectively. When your strategy and culture clash visibly, more likely than not, the culture is trying to tell you something about your own leadership philosophy.

But many leaders overlook this message. They blame the company’s culture for the resistance they encounter. In the most extreme cases, they assume an explicit mandate for wholesale cultural change. This leads them to remove key leaders and old practices, restructure operations, set in place new rewards and promotions, and announce other across-the-board programmatic changes. This approach is costly, disruptive, and risky. Moreover, it takes years to accomplish. Working in a culture that is under attack reduces employees’ energy and de-motivates them. It may require a major marketplace or economic disruption to get people to buy in. Clearly, this is not a game for the faint of heart. Worst of all, it is rarely successful; few major corporate transformations, especially those involving a wholesale change in the culture, achieve their intended performance goals.

Alternatively, leaders may try to ignore their culture and act as if it isn’t important. But when overlooked, the hidden power of a company’s culture can thwart any leader’s strategic aspirations. No matter how many top-down directives you issue, they will rarely be executed, at least not with the emotional commitment and consistency needed to make them successful.

FranklinCovey's input when supporting strategy execution is specifically focused on the behaviours, mindsets and beliefs which Katzenback defines as making up culture (as opposed to 'stroke of the pen' initiatives which can also make up a large part of strategic change). 

We recognise, in particular, that 'top-down directives' are unlikely to work and instead look to create the conditions where strategic change happens 'through' people, not 'to' them. We do this by first focusing on the nature of the goals that are set, then by translating these down the levels in an engaging way and finally by establishing a repeatable approach which taps into the resourcefulness and initiative of people at the front line in defining 'how' they can achieve the 'what' defined within the strategic goals. Our experience is that, rather than 'blaming their culture', this approach allows leaders to start using it instead to execute on their most important priorities and build sustainable high performance.