Culture trumps strategy. That phrase is well-worn for a reason. Think about every major corporate failure you can recall; Uber, Wells Fargo, Volkswagen, FIFA or you name the scandal and there was a failure of corporate culture, even with a successful sales strategy involved in the business. A section in this month’s Harvard Business Review (HBR) entitled Leading Culture had a series of articles dealing with the intertwined issues of culture and strategy and most importantly, how to effect a change in corporate culture.
Over the next few blog posts, I will be exploring the issues raised by these articles. Today I will consider the article “ ” by Boris Groysberg, Jeremiah Lee, Jesse Price and J. Yo-Jud Cheng.The authors begin by noting, “Strategy and culture are among the primary levers at top leaders’ disposal in their never-ending quest to maintain organizational viability and effectiveness.
Strategy offers a formal logic for the company’s goals and orients people around them. Culture expresses goals through values and beliefs and guides activity through shared assumptions and group norms.” They believe, “strategy provides focus and clarity for collective action and decision making,” whilst culture is the unspoken behaviors that move an organization forward. While most senior leaders are more than comfortable directing strategy, they are usually much less able when it comes to directing culture. Leaders often essentially outsource culture to the Human Resources (HR) function, which the authors believe is a big mistake.The authors next turn to defining corporate culture, finding four characteristics. This can be a key area where a CCO or compliance practitioner can use a corporate compliance program to help impact cultural change as this practice uses written standards, policies and procedures and internal controls to effect transformation. This can even move down into such systems as performance management where an obvious carrot approach can be viewed as a positive incentive. The authors note, “When a company’s structures, systems, and processes are aligned and support the aspirational culture and strategy, instigating new culture styles and behaviors will become far easier.”The authors conclude that at times, cultural change is vital.
It may be a legal violation, business reason, market conditions or disruption which requires a cultural change. Distilled down senior management “must become aware of the culture that operates in their organization.” They must target the culture they aspire to embrace.
The final step is to “master the core change practices of articulation of the aspiration, leadership alignment, organizational conversation, and organizational design. Leading with culture may be among the few sources of sustainable competitive advantage left to companies today. Successful leaders will stop regarding culture with frustration and instead use it as a fundamental management tool.”Every CCO should consider these points and use them going forward to effect a cultural change, if needed in your organization. Tomorrow we will consider how to shape your culture to do business ethically and in compliance. This publication contains general information only and is based on the experiences and research of the author. The author is not, by means of this publication, rendering business, legal advice, or other professional advice or services. This publication is not a substitute for such legal advice or services, nor should it be used as a basis for any decision or action that may affect your business.
Before making any decision or taking any action that may affect your business, you should consult a qualified legal advisor. The author, his affiliates, and related entities shall not be responsible for any loss sustained by any person or entity that relies on this publication.
The Author gives his permission to link, post, distribute, or reference this article for any lawful purpose, provided attribution is made to the author. The author can be reached at [email protected].© Thomas R.
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