An Overlooked Opportunity
Many companies’ corporate strategies describe value propositions, product and service mixes, investment aims, and competitive positioning, but one area rarely receives the attention it deserves: organizational culture. This item is crucial to daily performance, a company’s identity, and customers’ loyalty, so when and why does it get overlooked? What can companies do to integrate culture more fully into overall strategy?
Organizational culture includes several elements: the tone set by the leadership team, the modes and norms of communication among staff, and the manifestation of values such as integrity, trust, transparency, social mission, and the like. Cultures may evolve organically. Alternatively, people across the enterprise may be intentional, sincere, and committed in their pursuit of a certain ethos and atmosphere.
Some company cultures are famously intentional, as in these examples:
Zappos champions customer loyalty, creativity, and employee empowerment, as stated in the online retailer’s Family Core Values. These values include “deliver WOW through service,” “create fun and a little weirdness,” and “build a positive team and family spirit.”
GE encourages employees to conceive of work as more than a paycheck, advocating that one’s role “is not about your career…it is about who you are [and] the impact you are going to make.”
What Happens When Culture Is Unclear?
Despite the above examples, in many companies, culture is poorly conceived. Strategic planning teams may produce broad mission or vision statements with cliches about being the best in the field, putting people first, and so on, but then focus their attention elsewhere. Considerations such as market share or product mix take priority. Teams give great thought to publicity, pricing, placement, and other important but outwardly focused factors. Internal elements are, by comparison, only loosely defined. When this happens, cultural aims become subject to interpretation by each staff member. Consequently, abstract values gain little traction or consistency across individuals and departments. Interpretations expand and morph when employees represent many ages, experiences, professional backgrounds, academic training, and personal heritages.
Variations in values are fine to exercise in many life contexts, but in a company, they present challenges:
They make it hard for people to make decisions from a shared foundation, especially when ethical gray areas emerge. Whose values should matter more, employee A’s or employee B’s?
A company may struggle to proceed with a clear and shared sense of purpose. People may follow their own preferences rather than the mission or intent of the organization. Sports fans see this dynamic occur when teams trade for new players right before a playoff run. Board members see it when they elect new directors but do not provide a thorough orientation program.
When motivations and behaviors vary from one person to another, the company’s identity frays and the reputation suffers. Staff members and customers begin to doubt whether they will receive the same service from one employee to the next. They also realize the decisions the company makes will hinge on which person happens to make each decision. Without a deeply shared and well-defined culture, a company may survive for a time on intelligence, creativity, and knowledge, but it will struggle to adapt to new opportunities or challenges, and customers will question the company’s reliability.
Why Does Culture Get Left Out of Strategy?
If a shared culture helps an enterprise make decisions and represent itself reliably to external audiences, why do companies overlook or undervalue it? Sometimes a leadership team is to blame. Leaders may be so used to their own belief systems, they simply assume others share their beliefs. After all, values are intangible, so it’s hard to see what they are. Even if executives try to set an example through their actions, not everyone in the company is close enough to those executives to notice. Meanwhile, those who do observe executives’ actions firsthand may misinterpret them.
Culture is also hard to define and measure, or at least it may seem that way, so companies don’t bother. Decision-makers shift attention to topics that are easier to quantify, such as income, sales volume, staff size, and timelines. A company may devote just a little attention to organizational culture and commit much more effort to describing and tracking the other metrics. Oftentimes, the result is that an enterprise fails to achieve its stated goals across many metrics. The underlying reason, more often than not, is a cultural fog. A lack of shared values, lack of transparency, inconsistency in decision-making, and inability to adapt to market forces are emblematic of a wobbly internal culture.
How to Turn Culture Into a Strength
What can a company do to make its culture a more robust element of operations and strategy? Fortunately, there are several effective options:
Written, verbal, and visual communications
Interviews and orientation processes
Periodic training to reinforce values
Group discussions about “teachable moments”
Integration into formal plans
Written, Verbal, and Visual Communications
Culture often manifests itself in subtle ways, such as seemingly minor everyday decisions, but communications can give it definition by conveying consistent messages that are easy to read, hear, and see:
A simple way to convey a desired culture is to print a mission statement and set of values in large text on the walls of reception areas, kitchens, and conference rooms; in recruiting materials; and on web site and social media pages.
Further reinforcement can come through storytelling. Provide settings for team members to describe actions they took that showed integrity, transparency, or another core value.
Visual communications can include photos and illustrations that show ways for employees to treat customers and each other: how to dress, help people who need encouragement, and so on. Humor and creativity can make these images fun to see, share, and embrace.
Interviews and Training Sessions
More intensive efforts can further convey and inculcate a culture:
Use employee interviews to advance cultural values.
Include the use of open-ended questions, would-you-do-A-or-B binary questions, personality diagnostics, case studies that present ethical dilemmas, and role-playing activities. Construct interview questions, subscribe to diagnostic services, select published case studies, and do group exercises that will help with the screening and selection of talent, These activities will also signal a company’s value system.
Design employee or board orientation activities to reinforce cultural values.
Point out quandaries a company faced in the past and ways the company dealt with them. Highlight a company’s commitment to community service. Tell stories that convey the ways employees are expected to support each other and each customer.
Conduct periodic training to convey cultural values.
Training is especially important for veteran employees who were hired during an earlier time when culture was not an organizational priority. Long-term employees – and customers – may harbor assumptions that are no longer relevant or accurate. Invest in a training program to signal how important a desired culture is, bring to light unstated assumptions, and guide the transition to new values, norms, and behaviors.
Teachable Moments and MEntorship
“Teachable moments” can also bring decision-making methods and priorities to light. A teachable moment, a notion popularized by the educator Robert Havighurst, is a pivotal instance when a person is primed to learn a concept. Suppose a manager has to deal with a difficult customer in front of his employees. How will he handle the situation? Fellow employees will be curious to see what the manager does in this crucial moment, so they will pay special attention to the manager’s behavior. The manager can use this opportunity not only to address the customer, but also to send a clear message to fellow employees about what values are important to him and, ideally, to the company as a whole. In another case, a director may have just finished a difficult negotiation that concerned the fundamental direction and priorities of her company. Rather than just complete the negotiation and move on, she could gather her team together, walk through the negotiation process, summarize the choices she faced, describe her priorities, and explain decisions she made. This “window into her mind” will help her colleagues understand her value system. In a robust company culture, team members proactively look for teachable moments and use them to deepen desired values, behaviors, and norms.
Mentorship can enrich the roots of a growing culture. Identify team members who have a solid understanding of what matters to the company. Deputize them to educate their teammates. In addition, designate a leader to convene this group of mentors periodically. Facilitate a conversation about what values to convey, stories to share, and guidance to provide to fellow staff members. Mentoring discussions can be scheduled or informal, and ideally will include a blend of both.
Finally, the integration of cultural values into formal plans is crucial. Allocate resources to the creation and delivery of interview methods, personality and character diagnostics, orientation sessions, training programs, literature, visual cues, team activities, and other elements that combine to build and reinforce a desired culture. Strategic and departmental plans should highlight cultural matters so the team will marshal and commit the resources necessary for a culture to gain traction. The publishing of such plans can convey the company’s desired values to internal and eternal audiences. Such plans can also serve as accountability mechanisms, especially if the leadership team disseminates and refers to them across the enterprise throughout the year.
Direction for the Long Term
This combination of approaches can turn a company from a transactional, income-fixated enterprise into an organization that is infused with purpose and commitment. In the long term, this holistic form of a company develops the strength to weather difficult times and capitalize on new opportunities, much as a solidly built ship and crew withstands storms, survives long journeys, and navigates gracefully through shifting currents. Traditional measures such as financial performance will indicate whether a company is heading in a promising direction or must adjust course. Values, behaviors, and norms will ensure the team rows together, bails together, and navigates together towards the horizon.