Organisations cannot manage what they do not monitor—assessment of a business' culture largely rests on this premise. Based on 2023 research, most companies are prone to five or more cultural risks that often go unnoticed, primarily because strategy doesn't account for a close inspection.
Culture and strategy are two sides of the same coin. However, building a successful, accountable, and responsible business depends on how well the two blend. But business leaders may often find themselves caught up in semantics. What is an organisation's culture, and what does strategy have to do with it?
Defining strategy and culture
Firstly, let's establish a clear understanding of the terms at hand. Strategy refers to an organisation's deliberate and planned action to achieve its long-term goals. It involves decisions regarding resource allocation, market positioning, and competitive advantage.
On the other hand, culture represents the shared values, beliefs, and behaviours that characterise an organisation. The invisible force guides the actions and decisions of individuals within the framework. Culture is not explicitly designed but emerges organically from the collective mindset of the workforce.
That said, businesses can consider specific culture risk indicators, such as poor top executive behaviour, profit-based mentality, lack of accountability, poor communication, and lack of transparency.
Alignment for success
A well-crafted strategy without a supportive culture is prone to falling apart. Likewise, a vibrant culture without a clear strategy might lead to enthusiastic but misguided efforts.
For instance, an organisation that aims to become the next innovator in its sector must operate with a technological advancement strategy. Its culture must embrace innovation, risk-taking, and continuous learning and development for this strategy to thrive. The strategy will likely falter if the prevailing culture is resistant to change or risk-averse.
Appreciation and balance also matter. Challenges are bound to follow if a business only wants to innovate and expects its workforce to work around the clock without appreciation. A periodic reward and recognition session or workshops focused on mentoring, training, and balancing workload indicate that the company cares about its employees beyond their work-based output.
Enablers and barriers
A culture that fosters collaboration, adaptability, and a customer-centric mindset can amplify the effectiveness of a customer-focused strategy. Conversely, a culture that resists change needs more diversity or promotes individualism, which may hinder the implementation of even the most well-formulated strategy.
Human resource professionals often lead in cultivating and nurturing a culture that aligns with the organisation's strategic objectives. This involves understanding the existing culture and the expectations and goals of the employees. Doing so makes the business flexible and proactive in its approach to change. It also promotes healthy hiring practices, leadership development, employee engagement, and well-being initiatives.
Impact on performance
In Europe, over 35% of people claim to leave their jobs due to unsustainable performance expectations. Employees are more likely to be engaged and perform their best when they see a clear connection between their daily efforts, the organisational strategy, and the work culture. Without it, they may feel disconnected from the organisational goals, resulting in a lack of motivation and a sense of purpose.
While it cannot be ignored that everyone works for personal benefits, such as career growth and projection, their decision to stick with a company is primarily dictated by their overarching satisfaction with the culture. People often wonder why younger millennials and Generation X barely cross the three-year mark with most employers. They must consider the need for more investment in building a harmonious and inspiring work culture across sectors. The way forward becomes apparent when you see that people across generations cite a lack of uninspiring work environments and leaders as one of the main reasons why they part ways with an employer.
Programs that foster meaningful connections and offer new or even potential employees the opportunity to synergize with the organisation's values and processes motivate performance in the long run.
Organisations need to make room for strategic adaptability. What this essentially means is that the way businesses operate will evolve shortly. Integrating technology into the workforce has only accelerated the shift in workplace dynamics. To adapt to this, enterprises need responsive strategies that welcome change. This is key in preparing the workforce for the uncertainties of the future.
In 2020-21, businesses with resilient strategies generated over 50% higher returns than the rest. This involved rapid digital innovation, technological adoption, and a strategic shift toward a dynamic work culture for some. For others, this pertained to promoting a growth mindset, investing in employee development, and instilling a sense of resilience that aligns with the strategic imperative of staying ahead of the competition. Either way, those who made the move are reaping benefits.
The synergy between strategy and culture extends beyond building a cohesive and inclusive work culture; it defines the organisation and its values. While it may seem impossible to dictate culture on the surface, carefully constructed strategies can manoeuvre it in the right direction.