Your Vision was clear and compelling. Your Goals were well-defined. And your Strategy for creating Value was the perfect plan for winning in your chosen arena. You communicated the Strategy to the entire organization; leaders knew what to do, and employees knew what to do. All that was left was to execute the Strategy, and success would surely be yours.
But you didn’t. And it wasn’t. And you’re left thinking, “What went wrong?”
The Vision, Goals, and Strategy may have been flawed, but even if they weren’t, there is a significant factor that’s overlooked all too often.
The Culture of your organization — that set of Values, Beliefs, Attitudes, Norms, and “Rules” (both written and unwritten) — can sabotage the most elegant Strategy.
A significant body of research shows conclusively that Culture is the single most important factor in determining whether or not a Strategy is successfully executed and performance goals are achieved.
In short, it doesn’t matter how wonderful your Strategy is. If your Culture doesn’t support it, your Strategy is probably doomed.
Nowhere is this more apparent than in Mergers and Acquisitions. Time-Warner/AOL, Hewlett-Packard/Compaq, Daimler-Benz/Chrysler, and Microsoft/Nokia…just a few of the many unsuccessful M & A’s that litter the business landscape. The Strategies that underpinned those examples may well have been sound, but nevertheless failed to achieve their goals. And lost a lot of money in the process.
All due in large part to Culture issues.
Culture has such a powerful impact on Strategy because it is the environment in which everything and everyone in the organization exists. Culture surrounds, influences, and to a great extent, determines what will happen, how it will happen, and ultimately whether a Strategy succeeds.
Culture can support or obstruct action. It can create or destroy momentum. It determines the level of risk people are willing to take, the amount of change they will accept, and whether the shared values and beliefs of the organization are aligned with the Strategy.
There are three methods to address this potential roadblock to the successful execution of a Strategy.
Method 1: Clearly understand your Culture and how it is operationalized throughout your organization, then select a Strategy that can be executed within your existing Culture.
Method 2: Select the best Strategy, then determine how your Culture will have to change in order to support that Strategy.
Method 3: Close your eyes, pick a Strategy, and hope for the best. (Not recommended.)
The first two methods have pros and cons: Method 1 may limit your choices of a Strategy, but execution and implementation will be more efficient and effective. Method 2 provides for more Strategy choices but requires cultural changes that may be challenging.
The best way forward is to ignore Method 3, and blend Methods 1 and 2 by examining both Strategy and Culture simultaneously.
Considering both Strategy suitability and Cultural fit gives you the best probability of success.
If the best Strategy also is a good fit for your Culture, off you go! If the least suitable Strategy is also a poor fit for your Culture, you can eliminate that choice straight away.
In most situations, the choice will be determined by weighing the benefits and costs between suitability and cultural fit. If one Strategy is clearly superior but not a fit for your existing Culture, part of your planning will be to consider what cultural changes will be required, and their degree of difficulty.
For example, will the Strategy require:
- Challenging existing Values, Attitudes, and Norms?
- A higher (or lower) tolerance for risk-taking?
- More (or less) collaboration?
- A higher (or lower) level of innovation and creativity?
- Attracting different talent?
- Significant employee retention?
If the changes to your Culture will be more challenging than choosing a slightly less-than-optimal Strategy, that may be your better choice.
To avoid having your Culture eat your Strategy for breakfast, don’t select a Strategy in a vacuum. Always be clear about the interconnected nature of Strategy and Culture, then choose the best path forward to success.
The more you know about your Culture, the more successful you can be at aligning it with your Strategy. I can conduct a Culture Audit for your organization to provide you with a clear understanding of your Culture, how it influences behavior and decision-making, and how it can support your business strategies.
Download Ronn Lehmann’s Guide to “Why Should I Care About Culture”
Many leaders talk about Culture and often cite it as a reason for their success…or lack thereof. But few of them actively build and maintain their Culture. Download this free guide to discover how your Culture has a direct impact on your business success.