The New Culture
Conversation
How can you leverage culture to improve business performance?
Recent studies confirm a
strong culture drives organizational
outcomes when aligned with
— but can be a significant liability
when not aligned. Here's what our research has shown about culture and a model that organizations can use to help talk about and shape it.
strategy and
leadership
Scroll on for five takeaways
Culture should be viewed as a foundational business system and managed as such.
Organizations that embrace the same sort of management discipline around culture as they
do for other key performance levers will be
best positioned to shape culture to support emerging needs.
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Why?
A company’s culture can make or break the smartest strategy or the most experienced executives. Cultural patterns can produce innovation, growth, market leadership, ethical behavior and customer satisfaction — or they can erode business performance, diminish customer satisfaction and loyalty, and discourage employee engagement. Getting culture right matters.
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Managing culture requires
a definition and a model.
Culture is pervasive, and executives have an opportunity to either shape culture or allow it to shape them.
Our definition
of culture
Understanding
culture
Our culture model
Our Definition of Culture
Start from the outside-in
when setting a target culture.
When working with organizations to define a target culture, we ask about:
These data points serve as inputs for business leaders in making a data-based decision about what that target culture should be and how they can align their people around it.
4
Culture and leadership are inextricably linked,
so select and develop leaders who support the culture you want.
The style of the management team can send signals about the culture and how to succeed in it. Signals include:
The way they behave
and communicate
The people who they hire,
recognize and
promote
The questions they ask
What they focus
on in meetings
Assessing leaders for culture
We use our culture framework to compare leaders’ styles to the desired culture to understand how they might influence or help shape the culture.
Boards should understand the role organizational culture is playing in business performance
Because culture is a key driver of business results, boards should ensure they have an adequate line of sight on the culture, including any potential risks the culture could pose. Here are some questions they can ask to assess the impact of culture:
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What should boards do?
Boards should understand the cultural fluency and impact of the management team, and think about incorporating culture into forward-looking activities such as CEO succession planning.
Managing and shaping culture
can be a step-by-step process.
At a high level, here’s how we work to shift culture:
Defining a target culture that aligns with the needs of the business
Selecting and developing leaders with culture
in mind
Gaining buy-in for
the target culture
Ensuring performance management, training, compensation and other processes support the ideal culture
Read the full article
We can help assess whether your organizational culture is aligned with the strategy.
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LEARN MORE
We define culture as the shared assumptions that drive the way organizations think, behave and act. Culture represents the “unwritten rules” for how things really work.
What are the “unwritten rules” guiding the thousands of decisions employees throughout the company
make every day?
What is the current culture of the organization?
What organizational behaviors are required to achieve our strategy, and how well do
we demonstrate those behaviors today?
How well-aligned is our corporate
culture with our strategy?
What cultural impediments do we face and how will we overcome them?
What is the difference between our current and ideal corporate culture?
How does our talent development process advance our
ideal culture?
How do we consider culture in our leadership succession planning?
What changes should we as a board make in our behavior or composition to set the right tone for the company?
How can the board contribute
to the right tone at the top?
What are the goals of the business? How is the company’s heritage, history and current culture influencing the strategic journey?
strategic direction
What regulatory, competitive and customer trends drive what the organization needs to do?
external forces for change
What type of culture would bring out the best of the organization’s people? For example, does there need to be less emphasis on order and more focus on learning?
how to motivate the
current workforce
It’s not unusual to use “culture” as a catch-all for everything people don’t like about an organization, or to think about culture in terms of goals or outcomes. To really understand culture, look deeper at the underlying social system that directs the organizational behaviors that lead to specific outcomes.
Understanding Culture
Our culture model assesses where an organization falls along two dimensions critical to understanding culture: how it responds to change and how people interact to accomplish their work.
So, we look at where organizations fall
on a spectrum of highly independent to highly interdependent. We also look at organizations’ response to change, on a spectrum ranging from a strong emphasis on stability, consistency and predictability to a strong emphasis on flexibility, adaptability and receptiveness to change.
Our Culture Model
Recent studies confirm a strong culture drives organizational outcomes when aligned with
— but can be a
significant liability when not aligned. Here's
what our research has shown about culture
and a model that organizations can use to
help talk about and shape it.
strategy and leadership
Recognize the sub-cultures in
your organization
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A commercial division that's driving growth may need to be more aggressive
or risk-taking
A finance or a compliance division may need to be more cautious
A mature business that's more margin-focused may have a different culture
than a business that requires a lot of
investment and innovation for growth
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•
•
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Regular team meetings
The annual strategy session
Other follow-up strategy discussions
Performance management
EMBED CULTURE INTO REGULAR
BUSINESS PROCESSES
Leaders can’t just rely on strategy, structure and processes to manage the business because they don’t adequately address the people side of the change equation. The right culture allows companies to coordinate activities across very big, complex organizations very quickly.
MANAGE CULTURE TO HELP
THE ORGANIZATION ADAPT
TO NEW CHALLENGES
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