The culture imperative for executives

The culture imperative for executives - The supercharged organization

Culture is everywhere. Every organization, department or team has one. They either consciously created it, honed it over time into what some organizations call their ‘secret sauce’, as in ‘not copyable by the competition’. Or they have a culture that just appeared, accidentally, whatever it might be. Trust me, you don’t want an accidental culture. I’ve been there, I have seen what these cultures can look like and what they do to people. In accidental cultures, there are hardly any boundaries, the doors are open to all kinds of behaviours, even toxic ones like lying, cynicism, gossip and avoidance of accountability. As a result, people will burn out and leave. This is true for all kinds of organizations whether non-profit or for-profit.

Wait a second. I’m a strategy guy. I help leaders to consciously build a legacy, something larger than themselves by designing and executing purpose-driven strategies. Why would I write about a seemingly fuzzy topic like corporate culture that can sometimes feel like trying to nail jelly to a wall? Because consciously created cultures are superchargers for performance and are closely linked to strategy. Without this context, what would culture be all about anyway? If you think of culture as the fun and games side of an organization – like table football in the lobby, family events, or free fruit for everyone – think again. If you think culture is all about corporate values, codes of conduct, and how they shape collaboration, decision-making, and communication, then yes, that’s certainly part of the picture.

To me, culture is more than that: it is the way an organization performs , how the job gets done, how people take individual accountability for results. Culture means performance culture. What people do or not do when no-one is watching. The process of designing and implementing strategy can shape culture like no dedicated ‘culture project’. Let me provide three reasons why this is the case:

1. Culture projects are a waste of time and money

As I have described in previous articles, I see ‘strategy’ as one of the “Nine Elements of Organizational Identity”. It is uniquely positioned to bring an organization’s entire identity to life. While identity consists of nine tangible elements – purpose, guiding principles, mission, vision, strategy, goals, individual targets, capabilities and management systems – a performance culture, is what emerges as a derivative of identity. It is potentially less tangible, but it is nevertheless clearly visible and graspable.

Culture projects are a waste of time and money: because Culture is not a primary input factor that you can simply fix. Instead, it is a derivative of strategy and leadership. Please don’t waste money on a program trying to fix culture. Instead, invest in people-centric, strategically relevant capabilities. To implement strategy, to radiate purpose, and to bring values to life, organizations need strong leadership that display a defined set of mission-critical capabilities.

Some of the most relevant capabilities in this context are the abilities to inspire, collaborate, and communicate. Also, strategic acumen, leading by intention, and selflessness. The way people communicate with each other, the words they use, the topics they care about, the atmosphere they create are crucial.

2. The job of a leader is strategy, not culture (or is it?)

The second reason why a strategy process can shape culture better than any culture project is that no-one cares about your culture efforts. If you want to achieve a major transformation in any organization, you need executive buy-in and directors need to act as power sponsors. No brainer. But what are the odds of success if you walked into an executive meeting of your organization and said: ‘Folks, we need to work on our culture!’… That’s just not going to happen. Culture on its own is rarely a key topic. Executives often shy away from it, either because it seems to be not tangible enough, because they believe it to be a topic that HR should deal with in well-being programs, because they know it takes time to move the needle and their incentives are more short term, or because they simply don’t care.

Company leaders often deal with numbers – financials, sales, production volume, growth targets etc. – legal issues, mergers and acquisitions, restructuring, the political, economic, and competitive environment, the big picture. If you want to talk about culture, then good luck. Instead, if you challenge executives to sharpen the organization’s strategy and performance, you’d probably get more eyes and ears on you. If they understand that they can kill two birds with one stone, they will listen. Positioned in such a way, leaders will be more willing to make culture their job.

Performance starts with knowing where you want to be some years down the road. Having nailed a vision down, organizations develop a plan to get there, a strategy. Powering vision and strategy with purpose and values, makes it a worthwhile endeavor that people want to be a part of. Now remove barriers, enable and empower people to make the plan happen, be clear on why you want to do it and how and you are about to create a performance culture.

Establishing a performance culture requires leaders to translate strategy, purpose, and values into action. Communicating a vision, engaging people into a two-way dialog about a strategy plan (as opposed to just top-down communication), helping everyone in an organization understand how they contribute to success – are essential steps that engage, motivate, and empower people to perform at their best. It is all about co-creating success, and by doing so, establishing a performance culture that celebrates individual and team achievements.

3. Culture has become a strategic decision factor for capital markets and stakeholders

Leaders need to design and implement their organization’s identity, with all its nine elements. This is what shapes culture more than anything else. Together with identity, an organization’s culture is probably the most important legacy that a leader can build. Identity and culture influence and shape the lives of employees, their families, and friends, long after a leader has moved on. Where they struggle, executives often have boards as a sparring partner: supervisory boards steer the longer term direction of an organization, stress test the strategy, hire and fire the CEO.

Especially from an ESG perspective, boards are responsible for nudging executive teams towards shaping culture to support the strategic trajectory. This is the third reason why a strategy process can shape culture better than any culture project: the support of the board of directors. While more and more organizations are professionalizing their boards of directors, there is still a long way to go to make performance culture a regular boardroom topic that goes above and beyond the annual exercise to check the boxes for regulators and investors.

Financial markets seem to demand more and more transparency about ESG efforts, which hopefully will also lift related cultural aspects onto the agenda. Publicly listed companies will increasingly feel the pressure to deliver on investor expectation. In the words of Jim Clifton: “If there are two companies with equal shareholder return, but one makes people and the planet sick and the other makes them better, investors will pick the latter.” The shift from shareholder to stakeholder capitalism is in full swing. Therefore, the responsibility for culture lies both in the boardroom and with executives.

After all, culture is indeed a topic for executives and boards of directors – in the specific context of performance. If organizations lead strategy implementation from a purpose and people-centric perspective, they invariably create a new culture. A culture where everyone focuses on what’s important, where they overcome egos, where they work towards a common goal. Where leaders act as role models, lift others up and create opportunities for personal growth. Why? Because a leader with the above listed capabilities is a leader that does not accept behavior and performance that are detrimental to implementing strategy or negative for the work environment. Implementing the business strategy from this perspective is truly a driving force for culture.

A leaders’ guide to performance culture

If you want to create culture, approach it from a strategic perspective. It will force you to crystallize your thinking around a set of interconnected topics:

For the area I lead, what is our contribution to the overarching business strategy?
How do we measure this contribution and how often are we talking about these key metrics?
To what degree are these metrics translated from an organizational and departmental level to the individual level, to make contribution manageable and visible?
What are the relevant capabilities that my teams need in order to succeed and deliver on expectations?
What is my contribution to helping those around me succeed?
As a people leader, do I assign work based on people’s strengths, interest, passion, and growth opportunities?
How and how often do we celebrate successes, team and individual?

The job of a leader is to link the strategic and individual day-to-day levels. As a result, a performance culture emerges where individual contribution matters.

Main image by Meruyert Gonullu on Pexels