Shaping A Strategic Culture

“The CEO is the curator of an organization’s culture. Anything is possible for a company when its culture is about listening, learning, and harnessing the individual passions and talents to the mission of the company.”

Satya Nadella, CEO, Microsoft

The phrase, “culture eats strategy for breakfast,” sits firmly on the Mount Rushmore of Moronic Statements. It's commonly ascribed to management guru Peter Drucker, but it’s been confirmed he never said or wrote it. As with most small-minded observations, it creates an either/or proposition instead of opening the mind to the “and” option that both culture and strategy are crucial to an organization’s success. Today, I’ll share some insights on how the top companies in the world take a strategic approach to culture.?

We can define culture as a system of shared behaviors based on core values. Just as strategy is more about how your people utilize their resources (time, talent, budget) on a regular basis than what’s written in the PowerPoint deck, culture is more about how your team behaves each day than the values framed on the walls of HQ. Values are the traits that guide the thoughts and actions of a group. Behaviors are the observable activities of your people. Has your leadership team clearly defined the values and behaviors that form the foundation of your culture?

I define “strategic” as possessing insight that leads to advantage. Therefore, a strategic culture is a system of shared behaviors that cultivates learnings that lead to new value. In my twenty years facilitating strategy workshops for executive teams and providing strategic coaching and counsel to leaders, I’ve identified three techniques to shape a strategic culture.

1. Remove the poison.?Sometimes the biggest boost to culture is not through addition but rather subtraction. Poison is described by Dictionary.com as “a substance with an inherent property that destroys life or impairs health.” FamilyDoctor.org suggests, “The best way to prevent poisoning is to avoid contact with the harmful substance…The first step is to remove the poison if you can.” When it comes to an organization’s culture, poison can come in three forms: negativity, bullying, and blame. Even in large organizations, it only takes one person to poison the culture.?

Negativity manifests itself in attitudes such as killing the energy in a room instead of creating it, focusing on problems instead of proposing solutions, and shutting down others and their ideas instead of inviting and exploring new options. Bullying is defined by WBI as, “a pattern of repeated mistreatment, abusive conduct or work sabotage that humiliates, intimidates, or harms the target and interferes with the ability to work.” Blaming is the continual refusal to accept responsibility and accountability for outcomes of situations and fault others for not delivering the expected results.?

A leader who manages a person that repeatedly exhibits one or more of these three forms of poison—negativity, bullying, and blaming—should only be asking one question: Why am I allowing my best people—the high performers who represent our ideal values—to ingest this poison each and every day? It’s common to rationalize the company should keep the poison pill—they’re a high performer/producer, they’re just having a bad week/month/year, they’ve been a long-time, loyal supporter—and all this rationale taken together just forms a higher mound of manure. A leader who tolerates and makes excuses for a person that carries these poisons eventually loses credibility in the eyes of their followers and before long, will also lose their best people who ironically represented the ideal behaviors of the culture. Remove the poison…now.

2. Upgrade the team.?In the arts, business, and sports, it’s common to hear people equate their culture to that of a family. In these cases, they’re referring to positive family characteristics such as caring, loyalty, and unconditional support. Even if Uncle Tony quits his job, sleeps all day, and constantly borrows beer money, he’s still in the clan. Reed Hastings, CEO of Netflix, prefers a different analogy, “If we are going to be a championship team, then we want the best performer in every position. The old notion is that an employee has to do something wrong or be inadequate to lose their job. But in a pro, or Olympic, sports team, the players understand the coach’s role is to upgrade—if necessary—to move from good to great.”

Hasting’s notion of constantly looking to upgrade is a dramatically different approach than most organization’s take to managing their talent. Let’s start with tolerating consistent underperformance. First, we need to determine the root cause of underperformance and honestly ask if the person has received the appropriate amount of preparation, training, and tools to succeed in their role. If the answer is no, then those steps need to be taken to provide them with the proper development. Once those areas have been adequately addressed, the responsibility shifts to the underperformer.?

In multiple studies, groups with one underperformer did worse than other teams by a whopping 30-40 percent. Worse yet, the behavior of the one underperforming individual was adopted by other group members despite the fact they were only together for about one hour. A researcher commented, “Eerily surprising was how the others on the team would start to take on the [underperforming] person’s characteristics.” Underperformance by one person leads to underperformance by many.

In my work guiding executives through succession planning, they can use a Talent Scorecard to assess their key employees on a monthly basis. The Talent Scorecard is a real-time gauge to determine performance in areas such as technical capability, people leadership, and executive skills. This helps leaders have a constant pulse on performance and offers them a way to influence changes in a highly responsive fashion. In high-performance organizations, leaders are always looking at options for improving the team’s ability to achieve its goals. This coupled with a “two-deep approach” to key positions asserts that the leader and their HR partners always have two other personnel options for key roles—one internal and one external—that can maintain performance at a high level.

3. Set the thermostat.?One of the universal truths of a leadership team offsite meeting is that the temperature of the meeting room is never quite right for everyone.?

“Is it cold in here or is it just me?”?

“Yes, it is cold. I’m putting on my jacket.”

Five minutes later, a person on the other side of the room says, “Is it warm in here or is it just me?” The temperature tango continues.?

One of the keys to a strategic culture is setting the thermostat. Unlike the thermometer that reacts to the temperature around it, the thermostat establishes and maintains a desired temperature. Does your culture feel more like a reactionary thermometer (fire drills, flavor-of-the-month initiatives, etc.) or a carefully calibrated thermostat??

The development of a Strategic Culture Map is an effective way to begin shaping your culture without using a command-and-control approach that is sure to backfire. The process I guide leaders through includes charting the three-year GOST Framework (goals, objectives, strategies, tactics), overlaying the values and behaviors critical to achieving the GOST Framework, and creating the environment that nurtures the desired behaviors. The result is a one-page process visual that captures and communicates the directional elements and guiding principles of the strategic culture that all leaders can use to reinforce the desired values and behaviors.

For instance, your GOST Framework may include building a new ecosystem platform to connect your customers with third-party suppliers. The construction of this new ecosystem platform will require the key behaviors of enhanced collaboration and consultative inquiry. The environment to nurture these new behaviors may feature a change to the incentive compensation plan to focus on effort and willingness to collaborate and the dismantling of the IT department to move IT resources directly to the business partners. The key is to use the Strategic Culture Map as a real-time repository for new insights about what’s working and what needs to be enhanced relative to your system of shared behaviors.?

The adage “Hope is not a strategy,” should be followed with “and culture shouldn’t be left to chance.” Founders of successful companies drive a distinct culture in the early years that is fundamental to their growth. However, like a rose garden overrun with weeds, a culture left unattended can become choked with inconsistent values and negative behaviors. Shaping a strategic culture starts with a clear understanding of what you’re trying to achieve, and it’s realized through the right behaviors.

Are you the thermostat or the thermometer? You’re getting warmer…

Resources

Help your team develop their strategic thinking and planning capabilities through executive leadership team workshops and individual strategic coaching. Explore the following strategy workshop topics and more than 200 resources to build your team's strategic thinking and planning capabilities at?www.StrategySkills.com

• Deep Dive: Developing Your Team's Strategic Direction
• What is Strategy? Creating a Common Language and Understanding
• Sharpening Your Strategic Thinking & Planning Skills
• Elevate: Advanced Strategic Thinking and Planning for Executives
• Competitive Strategy to Win in Your Market
• Business Model Innovation
• Leading Strategy Conversations with Colleagues and Customers
• Innovative Thinking: Tools & Techniques for Creating New Value for Customers