Monday, August 31, 2015

Is Culture the Pathway to the Changes

The vivid metaphors for describing culture include the layers of an onion or the visible and invisible levels of an iceberg.

Culture is perhaps one of the most invisible, mysterious, but critical success factors for business strategy execution. Who does create the corporate culture? Is it the top leadership team who unilaterally in a willful act establishes a particular corporate culture? Or is it that at the beginning of a company, there are just a few people working in the organization, and in their interactions a corporate culture emerges? How is it developed? How can it be remained for years or centuries? Can culture be changed? And how to fine tune a high-performing culture?


First, culture in a company is a collective mindset, attitude, and top-down behaviors and action. The spirit comes from the top. Often the founder of organization creates the culture and builds the foundation of the company. So how strong the culture into the mind of the founder is, how strong it will be in the company. How much effort the founder put in, how fast it will impact the company. Although the founder does not have the full picture about the business brand at the beginning (culture is part of brand), the brand will be created or will grow time after time. How can culture be remained? As long as the founder keeps a strong idea of it, with the buy-in of a high level of management, culture could be remained. To the point about founders shaping culture, often it is the stories that get told about early successes and failures that create enduring elements of culture. Then, the major question would be: Is it the culture that can fulfill the business vision and accelerate strategy execution today? Or put simply, is it still helping the company grow and transform? In fact everything is moving around, the company and the culture could have been successful for years, but no longer be valued by customers or admitted by workers, or it turns to be the very barrier to stop businesses from gaining agility and maturity.


Culture has multiple perspectives that directly impact strategy execution: Statistically, there is 70% failure rate for strategy execution. There are many different causes of failure, such as resistance to change, silo thinking, business functions with competing agendas, lack of clear and decisive leadership, fail to translating strategy to execution, actions inconsistent with strategy, poor communication of strategy, lack of accountability on follow-through; inability to measure impact, too focused on short-term results, fail to making vision and strategy meaningful to front-line staff, fail to aligning job responsibility to strategy. Sometimes strategy makers spend more time designing the content of strategies than communicating more interactively on how to implement them successfully. In other words, the failure is caused by lack of accountabilities, lack of decision rights and inter & intra-divisional tensions. And all those aspects are due to the lack of a culture of execution.


The vivid metaphors for describing culture include the layers of an onion or the visible and invisible levels of an iceberg. You cannot consider culture as one element of the strategy execution unless you can identify the dominant cultures, subcultures, and the layers of those cultures. Layers of culture is a critical aspect here. What you see in the outer layer of an onion is easier to manage, but the innermost deep-belief core of the onion is much harder to change. The iceberg metaphor well describes the layers of culture, with values and beliefs often being under the surface. It’s nearly impossible to change the culture without bringing these to the surface, articulating them and assessing whether they are still the right ones for the current environment. And that in a fast growing company people tend to have similar ideal values that then get manifested in its corporate culture. When the company then grows, this corporate culture tends to stay the same over time -the culture inertia. However, in order to move up to the next level of organizational maturity, the culture needs to be changed as well to adapt to the emerging digital trend and pulling strategy execution towards the right decision. Typically, strategy execution fails due to surprises and unknown/ unforeseen factors. If you take the visible aspects of culture -the tip of the iceberg- alone as an element of the strategy execution, you may well head into trouble. There is stereotyping and elements of ethnocentric culture as well as there is also subculture. So basically, the execution and conviction of strategy strongly rely on culture.


Strategy guides change and culture are the pathways for the change; as the concept of liabilities of origin, the culture is largely a function of history too - whether it is a liability or asset depends on the change itself - but the fundamental nature of change suggests that true strategic change will almost always be in conflict with the old and prevalent ideas. Hence, a conflict with culture is very likely. It is important to explore the local culture in which the organization exists. The existing organization is next to be examined. After you have established a base culture, and then it’s on to examining the needs of the proposed strategy. The resocialization would have to be employed as well. This process is a learning and teaching process with clear communication of vision at its core. Being able to lead by example, lessons and ability to adjust where necessary based on advice from stakeholders will get you what you need.


Being humans, we should have one big advantage - knowing about our own nature. People have no problem with change! They have problems with uncertainty, risk, and fear. Therefore, culture as a collective mindset and attitude is the pathway to changes. There are many different perspectives of culture are presented along with diverse ways and means of dealing with it. Changing corporate culture should address not only the subgroups, but each singular value or behavior to be changed, or not changed. Culture can be changed, although it is challenging!

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