Monday, October 6, 2014

Culture is the Residue of Learning, do you agree?

Culture eats strategy for breakfast; innovation for lunch; and execution for dinner.

Culture is perhaps one of the most invisible, but powerful fabric-woven in the organization; one of the culture masters in the organization development world once said: "Culture is the residue of learning". In other words, leaders set a culture based on their vision and leadership substance and style. Much of this becomes "the way we do things around here", the mindset, the collective behavior and the corporate brand. Culture and strategy, which comes first? At the era of Big Data, how to build a data-driven digital culture of business?

The spirit of organizations comes from the top. Many of us like Peter Drucker’s witty quote: “Culture eats strategy for breakfast.” Indeed, culture is harder to change than strategy. There are various unspoken drivers that shape mind and behavior and how a place operates. The spirit of organizations comes from the top. The leaders’vision also drives strategic direction and is woven into the culture of business. However, many times, companies have not taken the time to understand their culture and norms which may get in the way of executing a strategy. The lack of culture clarity and cognition causes difficulty for leaders to make effective decisions on whether they shall stay on the path OR change strategy to meet a market need.

Culture assessment includes evaluating the real underlying values of the organization; it is critical to evaluate culture of the company thoroughly in the development of strategy, when changing strategy, or when trying to determine why the company is not a successful as it thought it should be. However, culture is one of the things which are insufficiently treated, when thinking of a change related to technology. It is much more structured and thus simple, to deal with the related technology. But people are still the weakest link. People can be so unpredictable or even negative. The drivers of culture are processes, structures, people capabilities, reward systems, etc, which are the same drivers of strategy execution.

Building an analytic culture is the crucial step in building a data-driven organization - it is indeed a great challenge to make the transformation. It requires baby steps, involving management attention, change of work processes, education, rewarding and so on. Measuring business performance through metrics is a necessary precursor but is not sufficient to shape, or does not necessarily result in a data-driven culture. If you think you have a data-driven culture, ask yourself how frequently you see people using key performance indicators to drive business decisions... rather than sourcing data to justify a decision that has already been made?

Data drivers are also determined by the power dynamics in an organization. If prescriptive criteria determine what gets counted as relevant data, then the top-down dynamics literally define what gets sent back up. Every corporate failure is rooted in intolerance and totality of ignorance. However, this is a good thing. We don't want insensitive organizations becoming more prevalent. Data-driven corporate must have clear goal, mission, performance tracking supporting process/products technology market innovation strategic change management creating values

Strategy and culture are interconnected. But most executives do not give as much time or attention to culture as they do to strategy. Look at the amount of time taken up in companies seeking the "perfect strategy". So much is to find the sweet spot in the market that offers a chance to differentiate. The two are interconnected AND that knowing your culture is a crucial part of executing a strategy effectively.


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