The world is changing at an unprecedented rate. Enormous geopolitical upheavals, economic instabilities, the climate crisis, huge technological developments, data and artificial intelligence, new worlds of work, problems in supply chains, a changing power structure in the world – all pose enormous challenges for companies. These instabilities force companies to adapt, change or even transform quickly.
Naturally CEOs start with their strategy – looking outwards at their own industry and customers’ needs and inwards at their structures, processes and systems and finding ways to improve company’s strengths and increase efficiency. Leaders assume that by mass-communicating these decisions to employees they will naturally accept and adhere to changes, within the broader context of the need to respond to external pressures. But this isn’t always the case. Employees often don’t understand the bigger strategic picture, and their individual or team’s role in achieving it. Mistrust grows, disengagement permeates and individual ownership becomes collective disenfranchisement.
The root cause of this? The consistent failure of organisations to factor in their underlying cultural fabric and its ability to support and drive the strategy – or not as the case may be.
“Many CEOs recognise the strategic priority of culture; for example, a study by Hedrick & Struggles shows that one third of the 500 CEOs surveyed rate corporate culture as the most important factor influencing financial performance. Yet, howto align culture with strategy, is often less clear,” explained Markus Webhofer, CEO of The Institute of Brand Logic.
This is borne out through my experience of working with organisations across the globe. Companies usually have an industrial strategy, customer strategy, market strategy, HR strategy. But, interestingly, a ‘culture strategy’ is usually absent.
Changeability must be weaved into the organisational fabric
All ofthis means that, to survive in today’s challenging climate, companies need to have the ability to adapt and change inbuilt in their everyday practises, by combining a solid corporate purpose with a robust cultural DNA. In other words, they need “changeability”.
Markus Webhofer identifies three essential questions that every organisation should be asking as they navigate today’s realities and prepare for the uncertainties of tomorrow:
- Do we, as a company, have a customer-relevant and distinctive purpose – a clear reason for our existence in the market?
- Is this purpose clear and significant enough to inspire and engage our employees and partners?
- Can everyone in the organisation understand and connect this purpose to their daily work?
At the Institute of Brand Logic, experience shows that the most successful organisations are not those who rely on a short-term strategy, but those which develop a distinctive purpose via a collective process and steadily cultivate it across the company.
“Therefore, we sustain companies, defining their “reasons why” involving all functions and hierarchical levels, and foster an ongoing, company-wide dialogue – in microcosms, forums, hallways and digital spaces alike,” explained Markus. “We make sure that purpose doesn’t remain just a statement – it becomes a shared north star, deeply internalised in people’s minds, hearts, and behaviours.”
A logical purpose serves as the organisational rudder
Next, organisations need to translate their purpose into a highly differentiated brand profile; building outstanding customer experience; modelling the touchpoints, the internal processes and policies; sometimes even defining everyday tasks. Thus, the company’s purpose becomes a unifying logic that guides the entire organisation and its ecosystem. And, in case of sudden changes in the environment, it serves as a guiding light that enables every employee to act rapidly and consistently, helping steer the company toward its defined destination.
Alongside this, the organisation’s culture needs to be crafted, scaled and sustainably embedded to ensure it is robust enough to drive all of the above. I’ve spent the last 25 years supporting organisation’s undergoing transformational shifts for numerous externally driven reasons – mergers, geographical expansion, technological changes, new leadership etc. All required a unique and bespoke strategy but what did each have in common? They ensured the strategic shift went hand-in-hand with a cultural one – harnessing the bottom-up spread of employee behaviour to embed and sustain their new ways of working.
Actions always speak louder than words
What does this look like in practice? We can’t just tell our employees to be more innovative, more customer-centric or more entrepreneurial because that’s what our strategy demands. These are loose terms open to interpretation. What we need are concrete behaviours inbuilt into the organisational system that encourage and support employees to innovate, put the customer first or think like entrepreneurs. We need to decide which behaviours we need to normalise, across the board, to create the culture we want.
We cannot address strategy and then hope culture will follow along behind. The most successful organisations of the future – the ones that truly have changeability as part of their DNA – will be the ones who understand that, when purpose and culture merge and reinforce each other, quantum leaps can emerge.
Author: Dr. Leandro Herrero – Chief Organisation Architect, The Chalfont Project and pioneer of Viral Change™
Photo credit: Dr. Leandro Herrero
