The phrase ‘culture eats strategy for breakfast’, widely attributed to business guru Peter Drucker, sums up the importance Margaret de Lattre attaches to organisational culture, particularly in such volatile times.
Margaret is the Programme Director for Henley Business School’s Advanced Management Practice programme, and her research has identified four key levers activated by organisations that manage to change their culture and become more agile and flexible.
“Simply put,” says Margaret, “if your strategy and business context require you to be more agile and your culture doesn’t allow you to be, you won’t be.
“Very often, the organisations I deal with know they need to adapt, flex and innovate, but they never manage to shake off a corporate mindset that is typically focused entirely on predictable delivery, lowering risk and efficiency. While these are important for success, they are also exactly the characteristics that inhibit agility.”
Margaret is far from surprised at this enduring approach, especially at a time when Brexit, elections, political upheavals and ongoing austerity tend to instil a sense of caution. “This rate of change can strengthen the inertia within lots of organisations, and they retreat into their comfort zones as they try to control their uncertain world, but we must realise that things will always change, and the rate of change is probably only going to accelerate. So the organisations that can learn to both deliver reliably and be fully responsive to changing circumstances will quickly be at a competitive advantage.”
Embrace the concept of multiple cultures
Margaret believes that one of the most important changes any organisation can make is to recognise that they can – and indeed should – have different cultures for different parts of the business.
“There still seems to be some benefit in a common culture – often a set of common values – to bind an organisation together, and as long as these values are aligned with the strategy of the business, it can really drive success.
“But all too often, desired corporate values compete with each other. It is too difficult for most people to simultaneously fall in line behind a value that emphasises efficiency and also one that emphasises adaptation or agility. They pull you in different directions. But if both mindsets are important for business today, we have to work out how we can help our organisations be both, at the same time.
“In organisations that achieve this, different parts of the business seem to have different priorities for their values or culture as much as they do for their operating plans and targets. The finance department, for example, might prioritise a culture and targets based on detail, process and control, whereas the research and development team needs to operate in an environment where creativity, innovation and experimentation can flourish. In this way, the different parts of a business can collectively deliver both efficiency and agility.”
The four levers that create a more agile organisational culture
In response to this need, and building on her research paper entitled Creating and Sustaining a Culture of Innovation, Margaret has developed four key levers that organisations need to activate.
- Symbols – what we see, hear and touch around us every day, such as training, communication and the working environment.
- Behaviours – understanding how successful people act, and how this can incorporate ‘living the values’.
- Reward and measurement – setting goals and targets that indicate whether you are making progress towards the culture you want.
- The business context – all the other things that help or hinder people to behave in certain ways.
“Unconsciously, the environment in which we work impacts hugely on what we focus on, so creating a working environment that can be adapted for different people and purposes or by simply giving people space in which to meet and interact can make a real difference.
“This would include recognition of success; not only good commercial performance, but also those role models who embrace and promote the organisational values. It also means people who achieve their operational and financial targets while not behaving in line with the desired culture should not be credited with high overall performance ratings.
“For example, this could be about defining specific metrics around not closing down seemingly unworkable innovations too quickly, but instead learning from them and finding ways to make them work.
“Often, the structures and processes that have been put in place – usually for good reasons – can get in the way of innovation and flexibility. Processes and the IT systems that enable them are often perceived to restrict progress rather than enabling agility. Holding tightly only onto essential processes, while being very open to amending those that really inhibit innovative new ideas is a starting point.
“It is possible to shift the culture of an organisation so that you can be both efficient and agile,” concludes Margaret. “The rewards, in terms of competitive advantage in today’s volatile, uncertain, complex and ambiguous world, can be enormous.”Advanced Management Practice