The phrase “culture eats strategy for breakfast” is often attributed to the renowned management guru, Peter Drucker. He used it to emphasise how much of a dominating and overpowering impact organizational culture has on a Company’s business strategy.
HR professionals in particular, have always known that organizational culture is ever-present, and alive within every workplace society. It lives for the simple reason that employees tend to be more loyal to the norms, behaviours, and company stories than to Management’s Strategic Intent. Why? Culture is the collective of actions, narratives, behaviours, formal and informal rules, stories, and attitudes that have achieved an equilibrium within the organization. This is known and acceded to by most, and defines a comfort zone. Strategy, on the other hand, tends to be disruptive; pushing the workplace society from the familiar to the unknown, resulting in a natural tendency for resistance.
My own definition of organisation culture is much simpler. It is the set of common and accepted norms of behaviour and work methods that set one workplace society apart from all others. “It is just the way we do things around here”, is frequently offered as an appropriate phrase which best brings awareness to the existence and power of culture in the workplace.
A Company’s organizational culture is what will determine how well its customers are served, and how well the employees serve each other in order to deliver results. Indeed, a customer’s experience is more related to the behavioural norms and work methods entrenched in the organization and less on any Management Strategy for bottom-line growth and improvements in market share. In this regard, it can be argued that the organization’s culture has the power to impact customer loyalty and the brand value even when it is at variance with the strategic intent of Management.
These are obvious indications that the foundations of organization culture are built on the nature and quality of the internal relationships in the Company. The culture actually lives in the people and is expressed in their language and behaviour.
Drucker’s well worn statement is premised on his view that where a specific business initiative is adopted that is at odds with the basic tenet of the organizational culture, that strategy is doomed to failure, unless deliberate interventions are implemented to resolve the conflict. Indeed, the strategy must become part of the culture.
This conflict occurs, because very often, the core of the culture is the business process itself and its too strong to easily accommodate a new initiative or strategy. For example, if the new strategy seems like more work requiring significant behavioural changes, then without buy-in from employees, the culture will defeat it.
I once observed a well-known manufacturing Company in the east-west corridor announce a customer service initiative, which if successfully implemented, could position its main product as the leading brand in its category. What the Marketing and Sales Director did not take into account was the fact that it would require the employees to perform duties over several weekends. Needless to say, the initiative was still-born and was only implemented 2 years later. The Company lost its timing advantage as well as a huge amount of money. The Monday – Friday 7-4 work culture created a natural resistance, killing the initiative.
Most new business strategies however, foolishly omit any serious attempt to change the behaviour of employees in order to secure required organizational improvement. This is a critical mistake often made, as the culture is synonymous with the attitude and behaviour of the people. In the same breath, if an apathetic culture exists, all the sales and customer training in the world will not translate into improved customer service.
Strategies are however not normally designed with an attempt to improve the attitudes of the people. If managers are not careful, activities influenced by the company’s “way we do things”, can lead to weaknesses and sluggishness as the interconnectedness within the organization will diminish.
The structure of an organization is also critical in any attempt to improve its effectiveness. In most cases, typical organizational structures are hierarchical arrangements of lines of authority, communication, duties, and functions. It usually determines how the roles, power, and responsibilities are assigned, controlled, and coordinated and how information flows between the different levels or departments.
In a centralized structure, the top layer of management has most of the decision making power and has tight control over departments and divisions. In a decentralized or flat structure, the decision making power is distributed and the departments and divisions may have different degrees of independence.
The appropriateness of an organizational structure depends on the organization’s objective and strategies. This is consistent with the age-old adage that “structure must follow strategy” and not the other way around.
Therefore, how do we connect this trifecta of culture, strategy, and structure to give the organisation the best chance of success? If we really think about it, we can, with some deductive reasoning, determine that the effectiveness of each element is interdependent on the other.
Accordingly, in order to ensure the successful implementation of any strategic initiative, HR professionals must ensure alignment between the strategy and the organization’s culture by taking the necessary steps to identify and address any conflict.
Further, if we accept that all strategies are temporary, then the organizational structure must be inherently flexible. As the strategic intent adjusts to meet the changing circumstances so to must the structure.
It stands to reason therefore that culture though ever present, must be also made flexible and adaptable to accommodate any new strategic initiatives and the supporting organizational structure.
The learning that we must take from this dynamic network of relationships, between these three important elements, is that a strategic intent adds value and brings improvements to the workplace society. However, to add value is to bring change and change itself is the only constant in the workplace society.