“Culture is everything,” said Lou Gerstner, the CEO who rescued IBM from collapse in the 1990s. He further added in his book, Who Says Elephants Can’t Dance?, “I came to see in my time at IBM that culture isn’t just one aspect of the game; it is the game.”
Culture is huge, it is the force behind every great organization and to a large extent what defines the philosophy that governs the interaction between management, employees, customers, suppliers, etc. Its critical role has in recent times shown according to Prof. James L. Heskett, Author of the Culture Cycle, that “It can account for 20-30% of the differential in corporate performance when compared with ‘culturally unremarkable’ competitors.” So without a doubt culture plays a huge role in every aspect of an organization be it corporate effectiveness or more so performance.
A company’s culture is its identity; it is a myriad of all the shared values, beliefs and behaviours that shape how people do things in an organization. According to Dale Stafford and Laura Miles in their article on Integrating cultures after a merger, It is defined by; the behavioural norms exhibited by senior leaders to front line employees, the critical capabilities and decisions about where and how to compete, as defined by the company’s strategy. And the operating model of the company—the structure, accountabilities, governance mechanisms and ways of working that make up the blueprint for how work gets done.
But what makes a culture? According to John Coleman, “Each culture is unique and myriad factors go into creating one.” And of all the factors responsible for culture creation, these are the six common components of great cultures:
Vision: A great culture starts with a vision or mission statement. This is the foundational element of every culture and this is what guides a company’s values and provides it with a sense of purpose.
Values: A company’s values are the core of its culture. While a vision helps define a company’s purpose, values serve as the guide on the acceptable behaviours and mindsets needed to achieve that vision.
Practices: Whatever an organization’s values, it must show in its practices viz-a-viz its policies. If an organization professes, “people are our greatest asset,” it must walk the talk by investing in people.
People: No company can build a great culture without people who either share its values or possess the willingness and ability to embrace those values.
Narrative: Every organization has a unique history and the ability to unearth that history and craft it into a narrative is critical to every culture.
Place: Have you ever wondered why Banks cluster in Victoria Island in Lagos, Nigeria or tech firms’ in Silicon Valley? Regardless of the numerous answers we might have, one stands out and it is that place shapes culture and impacts the values and behaviours of people in a workplace.
But in as much as culture plays a huge role in shaping organizations, most managers these days often fixate on strategy as their way of envisioning a successful and innovative company. Which begs the question can you truly win with strategy alone?
In truth, strategy alone though important is not enough. You simply don\’t win with strategy alone. At a certain point, the strategy fails because it loses touch with current reality. And the \”reality is that today’s organizations were simply never designed to change proactively and deeply – they were built for discipline and efficiency, enforced through hierarchy and routinization\” (Torben Rick). As a result, there’s a mismatch between the pace of change in the external environment and the fastest possible pace of change at most organizations. This eventually leaves the organization trapped in its own system of rigidity and complexity which may have accounted for their past successes. But then change comes in and sweeps through a shaky structure which strategy can do little or nothing to save; only a change in corporate culture can.
As such if an organization wants to say relevant it must embrace innovation and for it to embrace innovation it must look to embrace new ways of doing things – a new mindset you may call it but put more concretely it must embrace a culture change. In as much as change can be a threat to already established systems, it offers a lot of positives in terms of opportunity for growth which if maximized properly can create blue oceans for organizations already trapped in a red ocean of fierce competition, rivalry and potentially for organizations in matured markets.
\”Daunted by the pace of change, they are trying to become more adaptive: less obsessed with planning, more concerned with flexibility. At Microsoft, this is framed as a shift from a fixed mindset — one that depends on a few superstars — to a growth mindset, in which everyone must be open to learning from everything and from each other.”
Margaret Heffernan in her article on Microsoft has become richer through its culture shift.
Be that as it may, corporate culture is slow to build but more so pervasive and hard to change and changing it is a gradual process and one must expect opposition to change as with all new processes thus requiring patience and perseverance. But then organizations need to understand how critical the need to change is and how remaining in the now weakens their competitive edge in an ever-growing market. How then can such change be achieved? According to business executive, Torben Rick; to create a culture change organizations must look to:
Clarify values and corporate culture code.
Reinforce the vision and purpose – Ensure that everyone in the organization is clear on vision, values, culture code and how those elements lead to success.
Empower behaviours aligned with values, culture code and vision.
Align conversations up and down the organization.
Target effort on high impacts areas.
Emphasize success, plan for wins, celebrate the change
Furthermore, Organizations must avoid the following as they pose threats to the change process.
Changing practices without changing values – Wherein leaders create new programs or policies without attempting to change the underlying beliefs that guide individual choices. Employees and supervisors who don’t believe in the change will at best not support it, and at worst undermine it.
Confusing “espoused” values with underlying values – Wherein leaders develop and publish new values, but forget to work on changing employees’ beliefs about how the world works. Ignoring what’s below the surface is what will ultimately undermine organizational transformation.
As the change process kicks off, organizations should gradually introduce better and more innovative practices that open up doors of opportunities and insights on how to better tackle threats, leverage on strengths and improving on weaknesses.
Culture, in the end, remains ultimately King and an organization that wants to grow must build, sustain and when necessary change its culture.
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