The global economy continues its slow and in some respects uneven recovery, and with that comes an array of responses and focus areas from organisations. Depending on the industry sector, the point of the transformation journey, and the strategies needed to remain competitive, each organisation has a slightly different take on what’s needed for success. A natural extension of this is obvious in the various strains of performance culture work we are supporting our clients with both in Australia, Asia and the UK. Significant variations in what constitutes ‘performance’ can make it more difficult for senior leaders to grasp and execute on the culture agenda. We believe there are some underpinning success factors regardless of the performance context, and the most important of these is making culture a business issue.
Choose your culture
At the heart of ‘making culture a business issue’ is choosing the culture you are trying to create with direct reference to the business outcomes you are seeking to achieve. Critical to this is being clear about how your culture aligns with the performance narrative that is running through your organisation. Is it about execution, the customer, innovation, risk management or simplification? Whilst most of these sound good and have relevance to most organisations at any given time, creating change requires active choices about what is most important based on: 1. Where your organisation is seeking to move to, and 2. The current maturity and shape of the organisations work practices.
The Danger of…
Choosing too many areas for focus usually results in minimal change in any one particular area. In his book ‘Good Strategy, Bad Strategy’ US strategist Richard Rumelt strongly advocates focus to drive strategic shifts. He describes the psychological phenomenon that people and groups within organisations experience when they observe noticeable shifts in selected areas of work practice. Upon recognising this change, they respond accordingly, which creates more shift and so on. It sounds obvious, but this is what we call momentum. The tendency to want to do ‘Everything. Now’ is a frequent organisational characteristic that usually falls short, as effort and resources are spread too thin and no shift in behaviour or work practices occurs (or it is too minor to detect). Alternatively so much changes that we can’t attribute or understand it’s origin and rationale and because of that, the change doesn’t stick.
Aside from this ‘momentum effect’, the notion of ‘choosing a culture’ is an area that can be a struggle for organisations. The ‘competing values framework’ provides the most compelling framework for linking performance and strategy to culture. This framework suggests that identifying the value drivers for your organisation (e.g. market share, growth, quality, capability etc.) will directly relate to the key cultural shifts and related initiatives you will need to undertake.
Taking the first step: The Denison Model
One of the first steps in aligning culture to strategy is to understand the current state culture of your organisation. This provides a great framework to help leaders discuss culture in a way that avoids ethereal conversations about ‘behaviour and mindsets’. A business orientated culture diagnostic helps ground culture work in the performance realities of the business, and enables decision making and investment to be prioritised in the areas that will make real differences. Surprisingly, there are few culture tools that have the characteristics just described. We support the use of the Denison Organisational Culture Survey (DOCS) – the Denison toolset is based on deep research that clearly demonstrates the link between this model of culture and key business performance measures (Sales Growth, Return of Assets and Company Valuation). Just as importantly, the model is easy for leaders to understand and talk to; given that it’s leaders who need to lead culture change.
Key considerations for performance culture work
Want to talk more?
The performance culture conversation isn’t likely to abate anytime soon, as organisations seek to drive value by better aligning the workforce to strategy. If you’d like to know more about some of the work we’ve done in the culture space, read our case studies or get in touch via firstname.lastname@example.org. You can also register for our upcoming November webinar, “Culture vs. Engagement: Which is the better performance lever?”