Adjust, tweak, revise: tread softly when aligning strategy and culture

Culture is one of the hardest ­aspects of an organisation to express, let alone align with corporate strategy.

Strategy and culture need to be aligned and complement one ­another if they are going to lead to a meaningful improvement in ­organisational performance.

Culture is one of the hardest ­aspects of an organisation for senior mangers to express, let alone align with corporate strategy.

For organisations where culture is poorly aligned with strategy, the two often pull in opposite directions and create broader ­organisational issues.

Among staff, an established culture will outweigh new C-suite initiatives. When they aren’t aligned, existing culture will beat the organisational strategy, despite managerial efforts.

While poorly aligned strategy and culture can create obstacles, the opposite is also true: when they work in unison, they can ­unlock significant benefits.

What does poor alignment between strategy and culture look like? A lot of Australian companies will discuss how their corporate culture is team-based and founded on mutual accountability, with individuals expected to put aside their personal focus to build a successful team. But how does this actually take shape?

For many businesses, cultural goals are poorly aligned with the company’s other strategic elements. They may emphasise the importance of teamwork but ­provide individual performance incentives or set key performance indicators for each staff member rather than teams.

These add up to poor alignment between the teamwork culture and the way the organisation measures individual success. Staff will pick up on this inconsistency and quickly will lose trust if they see individuals rewarded based on their solo performance.

While poor alignment is easy to spot, it can be harder to fix. Companies that want to make this shift will need to ensure they are planning for long-term cultural and strategic shifts. Embedding corporate culture takes a long-term approach. For senior executives, part of the issue that can arise when building a new company culture is that results won’t be felt for several years. Perceptions will change only with time and can manifest themselves in a numerous ways.

Many efforts fail because senior managers don’t see the impact in the first year and so abandon projects. However, it won’t be until the second or third year that these changes achieve results.

Alongside failing to think long term, senior leaders need to be sure they are creating an achievable program. It can be tempting to create an extensive list of core themes defining company culture, but often this involves trying to change too much too quickly.

Adopting a restrained approach and starting with two or three points is often more effective. These ideas need to be achievable and agreed on by leadership. Setting unrealistically ambitious or broad goals won’t change organisational culture and will fail to engage employees.

Introducing a new culture must take a soft approach. It’s about gradual change to keep staff engaged and motivated.

Organisations can trial a cultural shift with one section of the company. A subsidiary or department can be a useful test bed for change, then extrapolate successes to the whole enterprise. The company then can tweak the culture as needed to get the right balance for the broader strategy.

Culture and strategy are intertwined and have considerable impact on employee performance. When they aren’t aligned and staff are confused, the incumbent culture will often win, undoing managerial efforts. When the two inform one another, the impact on staff performance can be considerable.

Scott Way is BDO’s director of industrial and organisational psychology.