Today’s leaders will have to face several large-scale demanding situations within their organizations. This means building resilience in the face of financial unpredictability, competing for the smartest talent, and creating an inclusive environment for everyone to thrive. Let’s be honest, global business is constantly evolving and there is no magic formula for success.
Or is there one?
Imagine having a foolproof tool at your disposal, which promises good luck for your organization almost each and every time. An asset that can trigger your good fortune strategy. Believe it or not, genies exist and they don’t live in lamps with only 3 wishes. This specific genius lives within the framework of his own organization, providing an unlimited source of desires – his calling is culture!
Culture is essentially the organization’s “personality” or behavior at scale. It’s like a living balance sheet, where every action has a positive or negative impact. Just like in accounting, more positive actions lead to long-term success. According to a Korn Ferry survey of leaders from the World’s Most Admired Companies (including Apple, Amazon, Microsoft, and others), two-thirds attribute 30% or more of their companies’ market value to culture. Additionally, 38% consider culture as one of the top five determinants of company success. Furthermore, a PWC survey reveals that culture is a key driver of successful change, with 72% of respondents reporting that culture facilitates successful change initiatives. In a time where change is pervasive and organizational performance is crucial, investing in culture seems like a straightforward choice.
However, there is a problem: culture only adds price when it aligns with the organization’s strategy. Otherwise, it can become a significant barrier to success. In fact, a survey conducted through the Economist Intelligence Unit (EIU) of 500 senior executives of billionaire corporations found that 90% of them failed to achieve their strategic goals because they struggled to implement them. Cultural alignment has been known as the biggest barrier to success. According to the American Management Association, the misalignment between culture and strategy leads to other negative consequences, such as project loss among employees, a tarnished public image, and increased turnover.
On the other hand, organizations that align their culture with their strategy and empower their employees to deliver results achieve higher returns on investment, assets, and equity compared to companies lacking this alignment. Why? Because when there is culture-strategy alignment, employees are not just obligated to execute strategic goals, but genuinely desire to do so.
Leaders want to recognize that the culture they identify has a significant effect on the value their business generates. Culture acts as an anchor, aligning organizations with their goals and objectives, influencing how workers collaborate, innovate, and ultimately contribute to the company’s success.
There’s an old saying that a CEO once attended a corporate culture convention and then asked the hiring manager to “give me that. ” Unfortunately, many leaders mistakenly believe that building a set of regulations is enough to create a productive organizational culture. This begs the question: why is culture overlooked as a determinant of a company’s long-term success? What makes leaders hesitate to recognize the impact of culture or their own ability to shape it?
Even the most experienced leaders struggle to truly understand what culture is and its profound influence on organizational success. Culture is not just about workplace aesthetics or corporate social activities. It is a complex network of shared values, ideals and behaviors that govern how an organization operates and communicates, both internally and externally.
Leaders have the power to create or erode value through their impact on culture. In fact, the most effective leaders recognize that shaping culture is an integral component of leadership, whether or not it is explicitly stated in their job description. Some argue that this is the most important aspect. Satya Nadella once said, “As CEO of Microsoft, the culture of our organization is my top sensible priority. ” It might be worth following the example of a CEO who has skyrocketed his company’s market capitalization from $300 billion in 2014 to more than $2. 7. billions today.
Culture is leader led, but it’s not solely the CEO’s responsibility. Successfully changing culture requires collective action. Today, it’s not enough for a one leader to bear the burden of upholding an organization’s culture. All leaders must embrace that responsibility. In other words, every leader’s job is to ensure that culture doesn’t become a barrier between strategy and execution. As a leader, you unite the what (strategy), the why (purpose), and the how (culture) to guide day-to-day and achieve intentional success.
Culture is behavior at scale, and the good news is that behavior can be changed. To keep your organization relevant and competitive in the long run, you must recognize when to change and be able to initiate culture change quickly. Staying the same is not an option. As Jack Welch once said, “creating a healthy, high-integrity organizational culture is not all about puppies and rainbows.” Instead, what enables culture change are two shifts working together: behavioral and structural. These shifts effectively foster and spread change throughout your company.
Let’s say you’re looking to foster a culture of innovation: how would you ensure that all of your structural and behavioral elements are in sync to help that culture? This can come with a motivating project and values that encourage artistic behavior, professional practices that give Americans the opportunity to be innovative, praise systems that recognize positive results, and an operating style that is conducive to creativity. Ultimately, as a leader, you are the conductor of your symphony. It is your duty to ensure that each musician and instrument plays harmoniously, as it should, and with enthusiasm while playing the composition. You set the speed and understand when it’s imperative to increase or minimize the intensity, all to bring out everyone’s most productive efforts!
Culture is not a mere backdrop to your business strategy; it’s a potent force that fuels it. Every leader, from the CEO to front-line management, holds the power to sculpt the culture and ensure its harmony with the organization’s strategic goals. As a leader, you’re not just a strategist and goal-setter; you’re a culture-shaper. So, take a moment to ponder: what’s your culture-contribution, and how does it elevate the value of your organization?
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