By Natalie Filatoff
Long-term business strategies may not stand up to market turbulence and disruption, but the organism that is culture, and its inherent adaptability, can turn shared beliefs, values and stories into purpose-driven responses that help a company pivot and prosper in almost any circumstance.
The saying, “culture eats strategy for breakfast,” attributed to 20th-century management guru Peter Drucker, has never seemed more pertinent than it is in 2019. The Royal Commission into misconduct in the financial sector identified culture in banking, superannuation and services businesses as responsible for the unethical behaviours it exposed. In an atmosphere set by Royal Commission probing – into the financial sector, institutional responses to child sex abuse and aged care – along with the risks posed by climate change, and the disruptive threats of business models built on new technologies, the rules of corporate survival are being rewritten.
Innosight’s much-quoted 2016 executive briefing, Corporate Longevity: Turbulence
Ahead for Large Organizations, was a stark wake-up call to corporations, showing a downward trend in the life span of large companies, with the average tenure of S&P 500 firms shrinking from 33 years in 1965 to 20 years in 2016 to a forecast 14 years by 2026. The briefing concluded that record mergers-and-acquisitions activity and “the growth of startups with multi-billion-dollar valuations are leading indicators a period of relative stability is ending and that an increasing number of corporate leaders will lose control of their firm’s future.”
A new Maximus whitepaper – Curating Culture: Mobilising People in the Age of Disruption – addresses the changing relationship between corporate strategy and culture; as well as the emerging role of leaders as influencers of adaptable and inventive cultures at a time when rapid change has become the norm.
THE NEW STRATEGY/CULTURE RELATIONSHIP
“What good is a strategy written down on a piece of paper when success hinges on its execution?” asks Jeff Puritt, CEO of Telus International, a Canadian-based telecommunications innovator in the customer-experience space.
The traditional approach to organisational strategy has been to measure past and present performance data and formulate decisions and future direction based on previous successes and market trends. “This approach works well in a stable market environment, but today’s circumstances demand a different approach that’s no less disciplined or intentional, but much more directed towards driving responsiveness and accountability among leaders at all levels within organisations,” says Director of Maximus Brent Duffy.
“Strategic planning for our organisations must move away from planning for static states and predictable patterns and towards being defined by adaptability and change,” agrees Dr Nora Koslowski, Associate Director at Maximus and co-author of the thought-leading whitepaper.
Maximus directors assert that developing shared aspirations among employees and leaders for the future of a company is becoming a key characteristic of adaptable cultures. Telus defines its own culture as “hands down” its competitive advantage: It’s what fuels our innovative approach to delivering end-to-end customer experience solutions backed by next-gen technology.
Essential to the new focus on organisational culture is the realisation that, in legacy companies, culture is already established. In Under the Hood: Fire Up and Fine-Tune Your Employee Culture, author Stan Slap defines it as “employees’ shared beliefs about the rules of survival and emotional prosperity.”
The neutrality of this definition emphasises that corporate cultures may exist anywhere on the continuum from positively empowering to toxic. It implies also that employees will create the culture that they need to survive their work and the demands it makes on them. Slap adds: “Culture is a distinct organising framework that gives your people a motivation fundamentally different from the company’s motivation.”
To bridge the gap, leaders need to understand their corporate culture and seek to positively shape it from within, driving the emotional commitment of the people they lead and embodying the changes they want to bring about.
THE LEADER’S ROLE IN CULTURAL DIFFERENTIATION
“Our new view of culture,” says Duffy, “is that it still encompasses the rituals, routines, stories and symbols of an organisation, but we believe it can change much more rapidly than the five- to seven-year timeframe previously touted as the minimum.”
Koslowski adds, “We’re thinking of culture as a living, breathing organism.” Like any organism, it’s adaptable and reactive to stimuli, or changes in environment. It selects practices that bring reward and satisfaction. It may be cohesive, or consciously diversified: aligned in common purpose, or towards various influential front-line leaders.
In the past, says Duffy, “the C-suite thought it owned and set organisational cultures and was responsible for them. We now understand that crafting a company culture to the nth degree and prescribing behaviours doesn’t work. As soon as people feel that leaders or HR are trying to impose culture, they dismiss it.”
To change or influence a culture, leaders must first observe it from the inside. “They need to get out there and sit within the culture, immerse themselves in it,” says Duffy. He also advocates that leaders “lift their heads out of the sand and experience other organisational cultures”, not in order to appropriate appealing aspects, but to clearly understand the positive differentiators of their own corporate culture – and what makes it unique.
The opportunity inherent in this strategy is to amplify each company’s outstanding characteristics, rather than trying to set nice-to-have agendas. Robots can deliver rote politeness; an enabled agile culture could instead curate for forthright responsiveness, intuitive personal service, or delight in domain expertise that’s both deep and up-to-the-minute.
With an understanding of the organism that currently defines their company, leaders who want to future-proof their organisation must begin to exercise new transformative skills. Leadership behaviours are in the spotlight, says Koslowski. “In this age of disruption, cultures are becoming so much more important in allowing companies to adapt to rapid change, and the responsibility of leaders to live the culture becomes much more pronounced,” she notes.
Leadership behaviours reflect not only a company’s mission and its aspirations, but the ways in which people spark off each other’s ideas and support one another to overcome difficulties.
“The leader’s every behaviour, every small action, contributes to the state of the overall organism – culture,” Koslowski says. “Whether a leader walks past a crying staff member, or stops to check in, for example, determines whether the culture feels ‘supportive’ or ‘uncaring’.”
Where leaders might once have assumed the mantle of planner, director and controller, they will now achieve much more by casting themselves as Meaning Maker, Value Architect, Culture Curator and Performance Coach.
“The leader’s every behaviour, every small action, contributes to the state of the overall organism – culture.”
Dr Nora Koslowski, Associate Director at Maximus
LEADING CULTURES FROM WITHIN
The new Maximus whitepaper explores in more detail the rationale and application of adaptable cultures, but, in broad brushstrokes, the roles of leaders are:
MEANING MAKER: “If you can create meaning for a company, the culture will be more sustaining and positive,” says Duffy. He cites Patagonia as a company that has connected its purpose and its people to “something bigger than just turning up to work every day to make outdoor gear and make money”. Patagonia recently changed its detailed and engaging articulation of culture and purpose to the simple yet profound statement: “We’re in business to save our home planet.”
The company has a history of shaping its culture with intention to reduce the harmful impact of its business on supply chains and on the environment; as a result, much of the basis for employee interpretation of this statement was in place, but for some weeks the company did not clutter the credo with any more scaffolding. It let the culture digest the statement and allowed people to imbue it with their own meaning. By seeding Patagonia’s new, urgent purpose into the culture and relinquishing control of how employees brought it to life, leaders created a more sticky and powerful aspiration than if they had clearly defined it. It lives within individuals, cohort, and staff groups rather than with leadership, marketing or HR.
VALUE ARCHITECT: “In the past,” writes Koslowski in the Maximus whitepaper, “strategies to grow future organisational value were planned and dictated from the top.” Now, when leaders don’t know specifically where growth will come from in the next three to five years, she asks, “How do we enable value creation throughout our teams, distribute the accountability and allow employees the freedom to be curious and empowered to create long-term value within their role?”
Duffy cites Urbis, a professional services firm in the property sector as a company achieving an agile, collective mindset. “The property sector is susceptible to turbulence, but Urbis is united around a purpose of ‘shaping cities and communities for a better future’,” he says.
“Whether I’m in their Perth office or conference calling with Urbis in Singapore, I can ask the question, ‘Why does Urbis exist?’ And individual employees don’t talk about their clients or their services; they talk about their responsibility and their ambition to shape cities and communities. Their culture, where everyone understands the overarching vision, is not held to static strategies,” Duffy adds.
The key to this commercially focused aspect of leadership, says Koslowski, is to help individuals understand where they contribute and how their role adds value in the current and future state.
This approach also answers the growing expectation among new generations of employees for personalisation of goals rather than group KPIs. In recognising people’s unique qualities and contributions, it builds a greater sense of engagement.
“If you can create meaning for a company, the culture will be more sustaining and positive.”
Brent Duffy, Director of Maximus
CULTURE CURATOR: When leaders understand their corporate culture and their sphere of influence within it, they can begin to model the behaviours that complement purpose and build cultural cohesion. Writes Stan Slap: “Your employee culture will notice what you emphasise, what you reward, what you give priority attention to, what you ignore. It will observe why you protect and promote. It will watch to see whether you defend what’s important to you under stress or temptation to compromise. The culture will use all of these impressions to form beliefs about how to behave in order to best serve itself.”
What leaders choose to shine a light on in terms of rewarding integrity, curiosity, fearlessness or ingenuity will become more quickly and naturally embedded than any company code. “If companies want their people to call out unethical behaviour, they must be rewarded, not punished, for doing so,” says Koslowski.
In short, leaders need to identify the outcomes they seek, demonstrate behaviours that drive those outcomes and reward people for making those behaviours their own. New Zealand Prime Minister Jacinda Ardern is an inspiring example of a culture curator for our era, demonstrating compassion, modelling shared human beliefs and driving transformative change of gun laws to meet the terrible threat of mass shootings.
“She’s a great role model,” says Duffy. “Ardern set a tone and the people of New Zealand accepted and adopted that tone, and it’s lifted the country’s culture through a devastating time.”
PERFORMANCE COACH: “The core aspects of leadership are still pertinent,” says Koslowski, referring to assembling talented individuals into teams, giving feedback on their performance and coaching them to excellence. The change is away from traditional command-and-control roles of leadership to more matrix-like structures.
Like a sports coach, leaders will give almost constant feedback. “We’re working with one organisation on how people talk to one another,” says Koslowski, “They’ve given each other permission to be honest in an environment based on care for their progress and development. They’re saying how refreshing it is to be able to ensure that everyone is held to high standards during projects right through to delivery – it motivates every team member to better understand their value to the group, and to revel in performance.”
At a time when the pace of change is so unprecedented that the value of static strategic planning processes is called into question, organisations must look to their cultures as the foundation of competitive advantage. In the context where most companies have an existing culture, it makes sense that leaders should amplify positive characteristics that are adaptable in times of disruption. Where cultures seem rigid or no longer fit for purpose, it is the role of leaders to embody the changes they want to see, and to sow aspirations that can unite a collective, but also live within each individual and group. When leaders model and reward inventive, thoughtful, culture-based agility, they can meet challenges with curiosity and transformative action.
This article was originally published in the 3rd edition of M Magazine, an exclusive print magazine aimed at inspiring and driving change through Australia’s executives and heads of HR.