The Culture-Strategy Cycle

Recently, in a conversation with a friend, I was led to deeply reflect on the interconnection between culture and strategy. This occurred during a dialogue with an innovation leader. He entered his company with the clear objective of shaping the area and bringing tangible results. However, in a short time, the task of reshaping the company's culture was added to his plate.

They have actions – such as the creation of ambassadors, the use of a knowledge pill platform, and they are going to conduct workshops to foster engagement. But he was lost, not clearly seeing how to link the fruits of this renewed culture to the hard numbers of the business.

How do we translate all this effort into tangible business indicators? And, beyond all of that, does this path truly have the power to reshape the very fabric of our company?

The Interplay Between Culture and Business

I explained that these two spheres – culture and business – are indeed connected, but in a subtle way. Culture can influence the innovation portfolio, which in turn can impact business and, eventually, strategic outcomes. However, the influence is indirect. Each action has direct KPIs of its domain and indirect ones under other work domains. That's why it's important that initiatives are well connected to each other, from strategy to operation, from the top to the base of the organizational design. We can't simply expect cultural changes to automatically translate into strategic successes.

The Water Cycle Analogy

The image that came to my mind was that of a waterfall. Water flows naturally downwards, effortlessly. But trying to make this same water flow upwards requires effort, work, and energy. The same applies to our culture and strategy. Working on culture can, with much effort, affect strategy. But it is more natural and effective if strategic goals flow into the culture.

After this reflection on the waterfall, I see even more clearly the power of the top of an organization in directing the energy of change. The top of the organization, armed with a clear vision and strategy, has the ability to cascade this energy through KRs, driving culture and operation. Trying to do the opposite, i.e., pushing energy from the bottom up, is like wanting the water to defy gravity and climb the waterfall. It seems so exhausting and, often, even disordered. It's like trying to make the water climb the waterfall on its own will. Not only does it require much more effort, but it can often cause misalignment, frustration, and waste of resources.

And it's for this reason that it's easier to change the company culture when there are strategic objectives and innovation outcomes cascading down to the entire organization to the personal level.

Balancing Top-Down and Bottom-Up Approaches

However, as I ponder the importance of the top in driving change, I feel that the energy from the base is crucial to complete this cycle. Just like the Sun evaporates water and makes it return to the springs. Without energy and commitment from those at the base, the waterfall can dry up. In my introspection, I see that it's this delicate balance between driving from the top and nurturing from the base that keeps the cycle of change vibrant and sustainable.

Strategy is the set of decisions about where we want to play and how we want to play, giving us direction, our "X" on the map. Culture, on the other hand, is the energy that moves us. One without the other? There's a lack of purpose or movement. Culture without direction is lost, disordered. Strategy without culture is lazy, fearful.

At the end of our conversation, I felt that perhaps I had ignited a spark of understanding... "a penny had dropped". I am eager to see how this reflection will influence his journey. And I hope that he can, in fact, make the water rise.