Significant shifts in society, the workforce, and stakeholder expectations have raised the profile of organizational culture. And it’s not just about people. Culture impacts staff and customer behavior. The actions and behaviors of individuals and particularly, company leaders, reflect directly on the organization’s image and reputation. Together, these affect financial performance and company value – both negatively and positively.
Navigating through big change – in the external or internal environment – is precisely the time to consider culture. CEOs must decide:
Is the culture you have the one you need?
Too often, culture conversations are rooted in the past – as I noted in an earlier article here. Certainly, institutional knowledge or heritage play an important role in defining the real culture of an organization. And it may be the most cited element of culture. Yet, origin is only one part of the whole. Further, relying too heavily on the past makes it hard to see where you are now. Worse, it’s nearly impossible to prepare for what’s ahead.
Forward-thinking conversations about culture acknowledge both what brought you here and what’s changed. They consider the good, the bad, and the ugly of leadership behaviors and actions, and the impact of these on company performance. The culture you need is the one that best supports the company’s ambition.
Three steps to discern the culture you need:
1) Think about your vision and what you are trying to achieve. Then assess how well your current culture supports your business objectives.
In what ways are you living and breathing your culture?
Does everyone know what happens when results are achieved (or not)?
How does the leadership team contribute to the reality of your company culture?
How well do people understand and value the culture you have?
2) Consider what’s happening in your world. The relationship between work and life has changed dramatically; social responsibility and equity are playing stronger roles; and people have more choices about where, how, and for whom they’ll work. Getting work done also requires attracting and retaining talent.
In what ways has the competitive environment impacted your evolution?
To what extent do your core values reflect changes in generational and societal expectations?
How do your internal systems of rewards and consequences encourage the behaviors you want?
What do you do to express your values and culture meaningfully for your staff and customers?
3) Acknowledge your heritage, then move on. Celebrate the aspects that make you proud and accept those that are no longer relevant, needed, or valued. Discard allegiance to what won’t contribute to your future.
What elements of your past will you reinforce for the future?
How well do you capture and retain the best aspects of your working habits and ideas?
What needs to change so that the future can be different – and you achieve your objectives?
How do you convey your proud history and forward-focus to stakeholders? To staff? To customers?
Every organization has a culture. Internal and external perceptions of that culture impact relationships with customers, suppliers, current and prospective employees, and investors. Relationships influence business performance. Rather than allowing history or old habits to dictate the culture, CEOs should be intentional. Discern the culture you need to achieve objectives. Then align your own behaviors to the desired culture and create the structures and systems to support it.
Learn more about creating the culture you need in the "Elements of Culture©" tool (p. 189) in my book, Charting the Course: CEO Tools to Align Strategy and Operations.