Strategy vs. Culture – Can We Call A Truce?

Much discussion has transpired lately regarding strategy and culture – though, more so the battle between which is more important and why. Although I find the various points of view to both be of value and interest, I find the entire discussion to be quit absurd. Can we call a truce?

I imagine that if “Sally Strategy” and “Calvin Culture” were having a debate it would go something like this…

Sally Strategy: Calvin, I find that you sometimes make it very difficult for me to do my job! It’s hard to keep us on track when I feel you and I aren’t on the same page.

Calvin Culture: Well Sally, I sometimes feel the same way. Your job doesn’t always fit in with my work, sometimes you can be an impediment to what I’m trying to achieve.

Sally Strategy: Oh really, how’s that Calvin? What exactly is it you’re trying to achieve?

Calvin Culture: Well Sally, I’m trying to achieve building a positive environment for our people, an environment with a clear set of values and norms that engages and aligns our people, unifying them in delivering high performance and value to our customers. I just feel that the direction you’ve set can be a bit ridged and can be prohibitive to my work.

Sally Strategy: Interesting point, Calvin. You realize when I first started my work my intent was not just to help us formulate a clear direction and define who we wanted to be - but also to help us get there. It’s my job to execute, to get things done. Though we have come a long way since I first started my work and it may be time to revisit a few things. After all, I can’t get things done if I’m in the way.

Calvin Culture: Don’t get me wrong, Sally, I couldn’t do my job without you, and I value the direction and execution you bring to our work, as we both play a huge part in the happiness of employees and customers and in overall success, perhaps we could collaborate together more closely moving forward?

(*Aside - See the way that was phrased?  Calvin acknowledged what Sally brings to the table and made her feel valuable and important to the process.  Speaking to and providing feedback to your employees in this style can be beneficial to engagement and performance…but more on that in another article.)

Sally Strategy: That sounds like a fantastic idea. I’m glad we got a chance to connect. Thanks for taking the time to chat with me today, Calvin. Let's stay in communication.

In reality, culture and strategy are often viewed independently – they are both parts of the system and need to be viewed together.

 

Strategy can be defined in various ways…

• According to Henry Mintzberg’s book, The Rise and Fall of Strategic Planning:




• Strategy is a plan, a "how," a means of getting from here to there.


• Strategy is a pattern in actions over time; for example, a company that regularly markets very expensive products is using a "high end" strategy.


• Strategy is position; that is, it reflects decisions to offer particular products or services in particular markets.


• Strategy is perspective, that is, vision and direction.

• According to Kenneth Andrews’s book, The Concept of Corporate Strategy:
  
  
  
  • "Corporate strategy is the pattern of decisions in a company that determines and reveals its objectives, purposes, or goals, produces the principal policies and plans for achieving those goals, and defines the range of business the company is to pursue..."
  
  
  
  

• According to Michael Porter in his Harvard Business Review article and books:
  
  
  
  •  Strategy is "…about being different…It means deliberately choosing a different set of activities to deliver a unique mix of value." "…It is a combination of the ends (goals) for which the firm is striving and the means (policies) by which it is seeking to get there."
  
  
  
  

A strategy delineates a territory in which a company seeks to be unique.- Michael Porter

Based on how most define strategy, the main reason for the existence of strategy is to achieve end goals. Culture is the environment in which strategy achieves those end goals. It is a general framework that provides guidance for actions to be taken, and, at the same time, is shaped by the actions taken…this shaping in part occurs due to the culture.

No culture can live if it attempts to be exclusive - Mahatma Gandhi

Culture can be defined in various ways…

• According to Edgar Schein:
  
  
  
  • Organizational culture is “A pattern of shared basic assumptions invented, discovered, or developed by a given group as it learns to cope with its problems of external adaptation and internal integration that have worked well enough to be considered valid and therefore, to be taught to new members as the correct way to perceive, think and feel in relation to those problems.”
  
  
  
  

• According to Charles W. L. Hill, and Gareth R. Jones book Strategic Management:
  
  
  
  • Culture is "the specific collection of values and norms that are shared by people and groups in an organization and that control the way they interact with each other and with stakeholders outside the organization."
  
  
  
  

• According to Geert Hofstede:
  
  
  
  • “Culture is the collective programming of the human mind that distinguishes the members of one human group from those of another. Culture in this sense is a system of collectively held values.”
  
  
  
  

"We tend to think we can separate strategy from culture, but we fail to notice that in most organizations strategic thinking is deeply colored by tacit assumptions about who they are and what their mission is." – Edgar Schein

Whether written as a mission statement, spoken or just understood, organizational culture describes and governs the ways a company's leaders, employees, customers and stakeholders think, feel and act. Culture may be based on beliefs or spelled out in your mission statement – which should be created as part of the strategy. Beliefs and values are words that will pop up frequently when defining culture. Culture is the identity of a company, and because of that, in some ways it becomes an identity of those who work there, as well. The people end up affecting the culture as much as the culture is affecting them. So while there are many definitions of organizational culture, all of them focus on the same points: collective experience, structures, beliefs, values, norms, and systems. These are learned and re-learned, passed on to new employees, and continues on as part of a company's core identity.

So – culture is how “work gets done around here” and strategy determines “what work gets done around here.”  A positive culture and a clear strategy are both needed for organizational, employee and customer satisfaction and success. After all...

A satisfied customer is the best business strategy of all. - Michael LeBoeuf

We need to call a truce and work more collaboratively, both between and with culture and strategy, to truly create high performing organizations. Based on the definitions, and based on my experiences, the relationship between culture and strategy is – or at least should be- a symbiotic relationship.

What do you think…Is a battle between culture and strategy occurring in your organization? Do you think one is more important than another? If so why or why not?

*In this article, culture refers specifically to corporate and organizational culture and strategy to organization and business strategy

About Scott Span, MSOD: is President of Tolero Solutions Organizational Development & Change Management firm.  He helps clients to facilitate sustainable growth by developing people and organizations to be more responsive, focused, productive and profitable.

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*All Rights Reserved. Reproduction, publication, and all other use of  any and all of this content is prohibited without authorized consent of Tolero Solutions and the author.

About Scott Span, MSOD: is President of Tolero Solutions Organizational Development & Change Management firm.  He helps clients be responsive, focused and effective to facilitate sustainable growth.

Email | Website | LinkedIn | Twitter | Blog | Facebook

 

In Goldman Sachs We Trust…Or Do We?

By now you probably have heard the news about the latest Goldman Sachs incident. Former London-based employee Greg Smith made some serious accusations in a New York Times op-ed piece….and as of late he’s not the only one. His accusations focused around leadership and management practices and the “toxic” culture at Goldman Sachs Group.

This very public vent session by an employee assailing CEO Lloyd C. Blankfein’s management and leadership, and the firm’s treatment of clients, went viral and led to Goldman Sachs losing $2.15 billion of its market value with the stock price dropping 3.4% as of late last week.

A pretty huge public backlash!

Though Goldman Sachs issued a public response (seriously, how could they not) it was too little to late – the damage has been done. Much has been in the media regarding the incident, the supposed reasons for Greg Smith’s article, and the type of environment and culture at Goldman Sachs. Though I’ve experienced my fair share of “toxic” cultures – and I am a firm believer that culture plays a huge part in business success – I attribute the negative perceptions, outcomes and public relations damage at Goldman Sachs to one thing more than others– TRUST!

"Me, I'm dishonest, and you can always trust a dishonest man to be dishonest. Honestly, it's the honest ones you have to watch out for." - Captain Jack Sparrow

Trust is the foundation of any successful relationship both personal and professional, and when it is broken, it is extremely hard to repair.  Even though all specifics weren’t shared with the general public, for the most part, the general public has now lost trust in Goldman Sachs leadership and thus the firm overall.

I am repeatedly asked to make the business case for trust. Other than the usual statements about trust reducing transaction costs, increasing employee and customer loyalty, and shortening the sales cycle, hard evidence seems difficult to find. Well, Goldman Sachs is a real life example.

I would  like to offer a cause and affect view on this breach of trust at Goldman Sachs: without trust within your company and between your company and your customers, employee engagement and morale will suffer. If engagement and morale suffer, customer satisfaction declines. If customer satisfaction declines, revenue declines. If revenue declines too much, business stops.

Trust is one of those in-tangibles, which means that showing a value add and making the business case for trust can sometimes prove difficult – until trust is lost and broken.  At Goldman Sachs, due to the alleged unethical business practices of the leaders, managers and employees, a “…decline in the firm’s moral fiber” permeated contributing to a “toxic” culture that became an acceptable way to do business.

"When a man assumes a public trust he should consider himself a public property." - Thomas Jefferson

Once this information was made public, by someone with an insider view, Goldman Sachs clients, vendors, and the general public were forced to reevaluate if they wanted to continue to be associated with a company that operated in such a way. A company that they feel betrayed them (and in many cases the actions went against their own values), with actions that have fundamentally breached their trust. Based on the ongoing negative financial impacts Goldman Sachs is experiencing, the overwhelming response seems to be – many don’t want to continue to be associated with a company that fundamentally breached their trust.

Now of course many of Goldman Sachs clients and vendors aren’t bothered by this or choose to ignore it, and the firm will most likely recover. However, it will be a slow process to regain public trust, and we may continue to see the negative impacts for some time. This example serves as a simple and tangible business case for trust, one that highlights the importance of increasing trust in the workplace. Noticing the negative impacts that lack of trust and transparency have had on Goldman Sachs, and using this as a real example to facilitate positive culture change and environments of increased trust, seems like a good lesson to me!

Do you feel Goldman Sachs violated the trust of clients? Is trust in a company you do business with important to you? Do you think "toxic" cultures are detrimental?

About Scott Span, MSOD: is President of Tolero Solutions Organizational Development & Change Management firm.  He helps clients to facilitate sustainable growth by developing people and organizations to be more responsive, focused, productive and profitable.

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*All Rights Reserved. Reproduction, publication, and all other use of  any and all of this content is prohibited without authorized consent of Tolero Solutions and the author.

What Is Change Management & Why Is It Important to Your Organization?

As an Organizational Development (OD) and Change Management practitioner I often get asked by leaders – so what does that mean? Why are these things important to my business?  And how can they help me create a high performing organization?

Well…let me explain the executive summary (OK well the sort of executive summary)…

What is change management? 

"If you want to truly understand something, try to change it." – Kurt Lewin

• The definition of change management varies. Many exist, some simple, some complex.  I’ll refrain from getting overly scholarly (you’re welcome).  To synopsize for the busy executive, change management can be defined as a structured approach to transitioning individuals, teams, and organizations from a current state to a desired future state.  It can be applied to situations such as downsizing, growing organizations, or even adding new technology. It is an organizational process aimed at helping employees to understand, commit to, and accept and embrace changes in their current business environment. A part of change management is also managing transition – and though related, change and transition is not the same thing.  Some definitions go even further to define differences between change management and change leadership (in my experience I see them very interrelated – one referring to the tools and technologies and the other referring to those individuals utilizing such tools, technologies and frameworks to lead change efforts.)

Why is change management important – how can it help?

• If changes are occurring in your organization – strategic changes, tactical changes, leadership changes, technology changes – then those changes are going to have impacts and effects on your people and processes (among other areas). To help minimize those impacts and effects, from having unintended negative outcomes, it is necessary to have “change management” methodologies in place with skilled resources delivering and executing on those methodologies, principles and processes. This helps to minimize possible negative outcomes and increase positive results. Change itself is a process – managing it, leading it, achieving it is also a process and one that should not be viewed and managed with a one size fits all approach. Approaches and actions should be customized to fit your organizational circumstances.

My take - as an organizational development practitioner, I view change management methods as just one of many tools in your toolkit used to help achieve positive organizational improvements.

Feel free to learn more on the Tolero Think Tank.

 

What is organizational development (OD)?

• The definition of Organizational Development (OD) varies even more than that of Change Management. Again, many exist, some simple, some complex.  And again, I’ll refrain from getting overly scholarly (you’re welcome).  To the busy executive, OD is basically the application of tools, methods, frameworks and technologies and processes to make your entire organization (yes, that includes people) more productive, profitable, and innovative. OD is an ongoing, systematic process of implementing positive and effective organizational change. Organizational development is known as both a field of applied behavioral science and as a field of scientific study and inquiry. It is interdisciplinary in nature and draws on many other disciplines such as sociology, psychology, communication, cultural anthropology organizational behavior, economics, political science, neuroleadership and theories of motivation, learning, and personality.

Why should you consider OD initiatives to support your organization in achieving desired outcomes?

“…Think of an organization as all the clothes hanging on a clothes line. All parts are connected. If you pull on the socks the towels move…”

- Arthur Friedman

• One of the distinguishing characteristics of OD is that it is based on collaboration and a “helping relationship.”  OD takes a total system view — the organization as a whole, including its relevant subsystems in the context of the total system. Thus, OD interventions and improvement strategies can focus on the whole system or on multiple levels of the system such as groups, teams, and individuals. OD interventions should be clearly tied to strategic goals and objectives. Parts of systems are not considered in isolation; the principle of interdependency, that is, that changes in one part of a system affects the other parts, is fully recognized. These interventions and improvement strategies can focus on various initiatives within the organization such as change, communications, strategy, culture and process.

So, why should you care about these things?

• Well you want to be successful, don’t you? Isn’t that why you took on organizational improvement efforts to begin with – to innovate, to reinvigorate, to become ever better. To prevent your organization from potentially failing before you even start – understanding and skillfully executing various principles of change management and OD are a necessity to success!

About Scott Span, MSOD: is President of Tolero Solutions Organizational Development & Change Management firm.  He helps clients be responsive, focused and effective to facilitate sustainable growth.

Email | Website | LinkedIn | Twitter | Blog | Facebook

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*All Rights Reserved. Reproduction, publication, and all other use of  any and all of this content is prohibited without authorized consent of Tolero Solutions and the author.

Why is no one talking about the 'pink elephant' in the room? Or are they?

So your organization is going through some type of change. How can lack of communication during times of change affect your productivity and profitability? More than likely your employees know what’s going on earlier than you may think.  Actually, if your organization is currently going through a change, employees and customers are probably talking about it as you read this. So it would best if you addressed that *‘pink elephant’ in the room and nip that ‘water cooler’ talk in the bud soon as possible!

Whether it is downsizing, merger or acquisition, implementation of new technology, or change in strategy, regardless of the situation, honest, transparent, and timely COMMUNICATION with employees and stakeholders is imperative to success. Without information, assumptions form.  Assumptions lead to rumors.  And rumors can impact performance and can sabotage positive change.

As your employees are spending time talking about whatever it is that is going on in your organization and worrying about how it impacts them and what it means to their jobs, they aren’t getting their jobs done – they aren’t fully engaged and high performing.  They are likely unmotivated and less likely to bring forth new, innovative ideas – ideas that could be helpful on how to improve productivity, profitability, procedures, and processes and positively assist with the changes in your organization.

“In most organizational change efforts, it is much easier to draw on the strengths of the culture than to overcome the constraints by changing the culture.”   - Edgar Schein

Your employees are one of your organizations greatest strengths - draw on them, respect them, communicate with them and keep them engaged!

 

So what should you do about this…

How do you halt the rumor mill and keep engagement stable during change?

• The short answer (in case you didn’t notice my not so subtle attempt to call it out above) is to communicate, communicate, communicate.  A detailed communications strategy developed specifically for the change effort is also helpful.  A change management framework and plan of execution are also necessary for success. After all, you can’t just stay quiet, snap your fingers and expect everything to turn out as you want (if you master that, please let me know!).

What if you can’t divulge all the details?  How do you address that with employees and stakeholders?

• Let’s face it, you can always divulge something. No one enjoys lack of information; however, few enjoy information overload either. It’s about balance. Communicate in small bites. Start with communicating information that has been agreed to by leadership, is timely, and has a direct impact on employees and stakeholders. Be transparent that certain details are not yet worked out and some information may be at a very high level – however, what is ready to be shared is being shared with the appropriate audiences and more information will follow.

“Good communication does not mean that you have to speak in perfectly formed sentences and paragraphs. It isn't about slickness. Simple and clear go a long way.”  – John Kotter

What are some other actions you should take to address possible employee issues during times of change?

• Aware leaders are quickly recognizing that having a strong and committed workforce is a key success factor for achieving desired goals and objectives during a time of organizational change – and for a high performing organization in general.  Specific actions help to support and achieve positive outcomes. As mentioned, one easy way to maintain an engaged and committed workforce – and customer base - is with open, honest, and timely communication.

 So a bit more about that process...  

Once the changes are ready to be introduced to the masses, the process must include corresponding communications and change management efforts. These efforts should include specific and detailed plans and actions that run in parallel, not independently. Without a strategic communications plan, it is extremely difficult to determine the who, what, when, where, and how the information should be introduced. A detailed communications plan should outline the content, vehicles, and frequency of communications with the various audiences and include methods to receive feedback. This can help minimize certain employee concerns associated with organizational changes – concerns that if go unaddressed can have a negative impact. Careful communications and change planning and execution are imperatives to minimizing resistance, increasing understanding, obtaining and maintaining engagement and performance, and supporting achieving successful outcomes.

So the moral of the story – let me put it in the words of a manager I worked with on a recent change effort…

“…I’m not a child, don’t treat me like one.  Communicate with your employees; don’t treat them like they’re your children who don’t know what is really going on.  They are more perceptive than you think, and can sense that change is imminent.  We all know something is going on, we know changes are happening. Tell me the truth. The sooner I know the truth the sooner I can determine how I can help – or get out of the way.”

So – have you ever been an employee in a situation like this? If so, how did you react? What was the environment like at work? How do you think things could have been handled better? What was the outcome of the change? We’d love to hear your story. 

Oh – and leaders of organizations who had successful change efforts – we’d love to hear your stories as well!

Keep an eye out for another article we’ll post shortly which will discuss more about change management  – what is it and why is it important.

* The phrase 'white elephant' in the room can also mean the same as 'pink elephant' in the room, and 'pink elephant' can  also be referenced regarding alcohol and hallucinations...so the color of the elephant in the room doesn't make much difference and isn't really the point. The color is simply a  unique qualifier to further bring the point to the forefront - the point being   a huge elephant exists and no one is talking about it!

About Scott Span, MSOD: is President of Tolero Solutions Organizational Development & Change Management firm.  He helps clients to facilitate sustainable growth by developing people and organizations to be more responsive, focused, productive and profitable.

Email | Website | LinkedIn | Twitter | Blog | Facebook

________________________________________________________________________________

*All Rights Reserved. Reproduction, publication, and all other use of  any and all of this content is prohibited without authorized consent of Tolero Solutions and the author.