Workplace Culture: Does culture really eat strategy for breakfast?
Ali F. Hamdan - ??? ???? ?????
Chief Audit Officer at Majid Al Futtaim Holding l Transformation l Governance l People Leader
Reading the caption prefacing this article, one might think that this piece is focused on defining good workplace culture. In reality, the real question I want to unpack is: why isn't workplace culture working? Despite numerous efforts, there are aspects frequently disregarded that undermine the desired culture.
The Importance of Organizational Culture: Beyond Strategy
In the business world, Peter Drucker's famous quote, “Culture eats strategy for breakfast,” highlights the undeniable influence of organizational culture on a company’s success. While strategies provide direction, it is the culture that fuels their execution and sustainability. The synergy between well-crafted strategy and robust culture is what drives companies to thrive.
Tackling Sub-Cultures
When championing a culture agenda, addressing sub-cultures is crucial. These sub-cultures, such as those focused on risk, compliance, or innovation, significantly shape the overall organizational culture. To give a few critical examples:
- Adherence to Corporate Values and Code of Conduct
- Compliance Culture
- Culture of Ethics and Integrity
- Innovation Culture
- Quality Culture
- Risk Culture
- Safety Culture
Ignoring these sub-cultures can lead to inconsistencies and conflicts, undermining broader cultural goals. Recognizing and integrating sub-cultures ensures alignment with the overarching cultural vision, fostering a cohesive environment. According to Gartner , employees in strong cultures are 2.1 times more likely to overperform on individual annual goals and 2.7 times more likely to overperform on team annual goals. This data underscores the tangible benefits of a well-integrated culture.
Substance Over Form
Adopting a substance-over-form approach is essential for genuine cultural transformation. This means prioritizing the authentic adoption of cultural values over mere formalities. For instance, a culture of ethics and integrity should be evident in everyday actions and decisions, not just in written policies. Employees should feel empowered to uphold these values, supported by the organization’s leadership. According to the Ethics & Compliance Initiative, companies with weak ethical cultures experience 10 times more misconduct than those with strong cultures. This statistic underscores the importance of genuine commitment to cultural values. Leaders must model ethical behavior consistently, creating a trickle-down effect that permeates the entire organization.
Culture Nuances: Climate vs. Environment
Understanding the nuances between culture and climate is vital. Culture encompasses deeply held beliefs and values that evolve over time, while climate is shaped by visible signals from peers and the environment. Climate can be influenced more quickly and is easier to assess, making it a useful proxy for understanding the broader culture. By observing the climate, organizations can gain insights into underlying cultural dynamics and make informed adjustments. Measuring climate helps track the point-in-time perceptions of employees toward organizational culture, which can show trends in culture change over time.
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Measurable Elements
To effectively champion a culture agenda, focusing on measurable elements is important. These include transparency, communication, and the learning environment, among others. Breaking down culture into observable components allows organizations to track progress and identify areas for improvement. For example;
- Measuring employees’ comfort in speaking up can provide valuable insights into the organization’s ethical climate. Gartner 's research indicates that employees in strong cultures are 90% less likely to observe misconduct, and when they do, they are 1.5 times more likely to report it. This demonstrates the impact of a measurable and transparent culture.
- Transparency breeds trusts. According to a study by Harvard Business Review, organizations that are transparent about their practices and decisions foster higher engagement levels among employees.
- Open lines of communication are crucial. Gallup's State of the American Workplace report found that engaged employees are much more likely to report that their supervisors listen to their work-related problems.
- A strong culture promotes continuous learning. Companies that offer robust professional development opportunities report 34% higher retention rates, according to LinkedIn’s 2022 Workplace Learning Report.
Global Statistics on Culture
The benefits of a strong organizational culture are well-documented. There is a notable 17% increase in employees reporting better physical health and a 23% increase in those reporting better mental health when employers develop deeper relationships with their employees.
However, cultural failures can be costly. According to a Harvard Business Review report, cultural misalignment can lead to a 30% decrease in organizational performance. Furthermore, a survey by PwC reveals that 52% of employees have left roles because of unhealthy workplace cultures. These statistics highlight the critical importance of fostering a positive and aligned organizational culture.
Why Culture Fails
While the potential benefits of a well-aligned culture are immense, many organizations struggle because they often disregard crucial elements that foster a healthy workplace culture:
Conclusion
Organizational culture is the bedrock upon which successful strategies are built. By addressing sub-cultures, focusing on substance over form, understanding cultural nuances, and emphasizing measurable elements, organizations can create a robust culture that not only supports but also enhances their strategic objectives.?
Remember, while strategies may set the direction, it is the culture that drives the journey. Organizational success is not merely a result of strategic alignment but of cultural coherence and authenticity. By truly embodying their values and integrating them into every facet of the workplace, organizations can pave the way for sustainable success and employee fulfillment.
References:
Store General Manager Omnichannel Majid Al Futtaim Retail – Carrefour
1 个月I was always passionate about topics related to company culture. I came to the conclusion that since people, groups of people, group of Alies are more stronger than strategy, p&p etc , culture will remains eating not all of the strategy but the way the execution is done, people to involve on it and the resources to engage. Is it simple task to avoid that? For sure no, it’s called a system because it’s complicated with strong ties and interests between people in the same organisation. The solution comes from having strong role models across all levels and cut short with every deviation , misuse of power, harassment or even unfair sanctions. It’s quite complex topic Ali.
CMO | BRAND BUILDER | GROWTH STRATEGIST | INNOVATION | LUXURY | FMCG | P&G | BOARDS
1 个月Brilliant insights Ali ! A thought … I strongly believe an Organization’s Culture enables strategy to be executed brilliantly - alignment, decision making , engagement, employee behaviors … I lived that at Procter and Gamble, a company with a deeply rooted culture… Strategy and Culture go hand in hand …
HR Executive | Organizational Development & Transformation Leader | Team Builder
1 个月Ali F. Hamdan - ??? ???? ????? what a great piece on organizational culture and its' importance. Your thinking aligns with the best in the biz (CEOs like Brian Chesky from Airbnb speaks wonderfully about culture, what it is and how it impacts the business results) and I think the practical frames you share here are a great way to think about culture, not as something ephemeral, but as something real. As a Chief Audit Officer, I think it is so right that you are focusing on culture (and I wish more did!). Herb Kelleher, the late co-founder of Southwest Airlines, is credited with saying, “Culture is what people do when no one is looking." - now, he might cringe at that soundbite, but what he meant was - if you have a strong culture, then when working on their own, or in moment of crisis where a colleague could do the right or wrong thing for the company... And get away with it... Then a strong culture will drive how they act and behave. (For good or bad dependent on the culture). IMHO this is exactly what Audit wants, not for people to be on their best behaviour only when you come knocking... But living the culture every day when you are NOT looking, so that they do right by your customers, shareholders and colleagues. Spot on.
Director
1 个月Meir Adler i think you will really like this
Chief learning officer | Board advisor | Coach | Majid Al Futtaim | Ex-Meta | Ex-Accenture.
1 个月I love how much care you put in your post. The knowing-doing gap in workplace culture is the work of all of us to counteract. When we know better, we should do better and it is important to not just role model but enforce culture. It's a heavy word "enforce" but your culture is what you tolerate. Enjoyed reading it Ali F. Hamdan - ??? ???? ?????!