Culture as a Core Business Strategy

An emergent approach to a living culture

I often wonder how many organizations truly put the effort into understanding how culture is fundamental to their business success and how to optimize such to bring their desired culture into the fabric of the organization.

For the sake of common understanding, let’s define culture as:

‘Influencing patterns’ that people consistently and congruently experience over time which emerge as the norms, beliefs, values and practices that guide people in their perspectives, attitudes, decisions and behaviors.’

An ‘influencing pattern’ is a contingency of interdependent patterns that begin to emerge and form into something which has an inherent capacity to influence persons and events.

I believe this is in line with Dr. Edgar Schein’s definition:

The culture of a group can be defined as a pattern of shared basic assumptions learned by a group as it solved its problems of external adaptation and internal integration…

A Living Culture

Let me also offer a fundamental principle to support the ideas presented in this write-up:

People are ‘experiential’ by nature.

People have heard all the talk, read the list on the pretty frames in the hallways that sound the same in any organization, and have attended the ‘event programs’ about its vision, desired norms, values, attitudes, and beliefs. But the reality is until they experience such, those ‘talking points’ will not become real nor internalized in people’s minds and hearts.

So how does an organization create both the conditions and the ‘influencing patterns’ that help form people’s experiences which then emerge as what is called the culture of an organization?

How does an organization embed the desired perspectives, norms, attitudes, values and practices that reflect the desired culture into the fabric of the organization?

What if …

• What if an organization is not encapsulated by the overly used term, ‘culture’?
• What if this nebulous construct named ‘culture’ is never placed under a microscope as something to be quantitatively assessed, analyzed, segmented and diagnosed?
• What if the term ‘culture’ is seldom mentioned? Rather, an organization focuses on setting the stage and the conditions for the desired culture to emerge and form naturally.
  • Serendipitously, I discovered the following quote by Dr. Edgar Schein in a recent interview with Tim Kuppler, “I’m almost tempted, when I get into a client situation or a coaching situation, to say: let’s have this entire conversation without using the word culture…”
• What if the desired culture is simply ‘experienced’ in a consistent and congruent manner over time emerging and forming the desired norms, values, attitudes and practices?
• What if certain norms, values, attitudes or practices shifted, or were distinct from the original thoughts of the desired culture? Let’s say some emerge and some evolve as the organization emerges and evolves?
• What if we can create a ‘living culture’ to emerge and evolve.

As I grow older, I pay less attention to what men say, I just watch what they do.
-Andrew Carnegie

Culture as A Core Business Strategy

Let’s explore the three following areas where people can create the conditions and influencing patterns of experiences for a desired, living culture to emerge and form:

1. The business model.
2. The business strategy.
3. The structure and design of the organization.

1. The Business Model – some considerations

Whether an organization is a start-up, or an organization that has been around for a long time which has a need to review their business model because of changes in such areas as the market, technology or a change in leadership, then what if senior people started thinking proactively about one’s company’s culture as an integral and fundamental ingredient of its business model.

Some Questions to Facilitate Awareness and Exploration of the Importance of Culture Becoming Inherent Within the Business Model:

• What business are we in? What is our business model?
• How important is culture to our business model?
• What is the role of culture in our business model?
• What does culture look like within our business model?
• What are our core beliefs? What are our values? What do we stand for?
• What does leadership practices look like in our business model?
• How do we give people experiences that are consistent and congruent with our desired culture through our structures, practices, systems, policies, relationships, and business processes?
• How does the role/design of IT/IS reflect our culture in our business model?
• How do we work together and build positive relationships with each other in our organization, with our customers, with our market, and with our supply side in our business model?

Comment: Even when you have the greatest business model, you will not achieve optimal performance if you cannot create a supportive/validating culture that becomes integrated and synergistic within that model as a whole. This is why culture needs to be embedded as an integral part of the business model canvas.

2. The Business Strategy – some considerations

Traditionally, a change in organizational culture has been written as and viewed as a unique initiative/program within an organization’s strategic plan. This sets up an organization’s culture as ‘something nice,’ or as ‘a program’ outside of the core business strategies of the organization. Thus, cultural change many times becomes ‘something we have to do as a sideline project outside of the core business strategies.’

As an alternative, what if an organization embeds their values into their core business strategies to create new employee experiences congruent with the stated values.

Examples

• Strategic Goal: Service / Product Value to Enhance ‘Reputational Capital’

To enhance product/service reputation through integrated information systems for supporting and increasing the scope of product/service knowledge, customer feedback, innovation, and decision-making at front-line staff, systems, and customer interfaces.

• Strategic Goal: IT / Front-Line Information Systems Integration

To design and implement open and integrated IT/IS systems where people/teams can design user-friendly, customized dashboards to enhance a greater understanding of, as well as their contributions to, the business as a whole system.

The purpose of a company is not to create a nice workplace culture but to function in the economy, to provide goods and services.
-Edgar Schein on Culture University

3. Organizational Structure and Design – some considerations

Most, if not in all, organizations have two basic types of structures.

1. The first one is the formal structure that describes ranks of individuals, authority/reporting channels, functional departments and the segmentation of those functions.
2. The second one is the informal structure. Whereby the formal structure shows how participants are expected to relate to each other, the informal structure is how they actually do relate and interact with each other, how work really gets done across the organization, what types of relationships are developed as well as what actual value each person/group brings to the performance of other members and to their customers.

Most organizations are still formally structured according to The Industrial Age hierarchical silos. This 19^th Century design is based on traditional authoritarian power (feudal lords and expendable serfs), upward lines of reporting, territorialism, management control of information, and expected ‘god-like,’ infallible humans at the top to follow without question. This formal structure exists for the control of resources, people, and outcomes but not necessarily adaptable to today’s rapidly changing and increasingly complex world.

In a May 2011 Harvard Business Review article, Harvard Business School professor John Kotter suggests that hierarchical organizations inhibit timely transformations, which are essential if a business is to survive in a rapidly changing environment. He suggests that hierarchies work for standardized processes but they are not useful in dynamic environments. They are slow to react to new opportunities, which often require transformative change.

To extend Dr. Kotter’s point, I believe that traditional, hierarchical structures cannot fully reflect, and may actually inhibit, the desired values, attitudes and practices that are needed to deal with the complexities, risks, competitive innovations, market changes, political changes, customer expectations and rate of change that organizations have to deal with today.

I believe that the 21^st Century needs structures that move from Industrial Age silos toward the Interconnected Age, such as collaborative, functionally integrated, value-based networks linked by integrated information and value streams, and where ‘positional leadership’ is a thing of the past. Maybe, some day, a person is not defined by their position but by their merit and character as reflective of the desired values of that organization.

How would you design an organization that would effectively function in a complex world of change and challenges? What would that look like?

The bottom-line question here for me is: How does the design of your organization reflect your values so internal and external people actually experience such in their interactions with your organization?

In Summary

Through my studies, practice, and observations, I believe that what people experience as ‘influential patterns’ over time constitutes how they perceive and define the culture of an organization.

I believe the desired culture needs to be embedded and reflected in an organization’s business model, their strategic goals, and their organizational design.

In doing so with conscious effort and guidance, the desired culture will emerge and form new norms and practices as a living organizational culture.

Bottom line: If you want to change the culture, give people a different experience.

What do you think about this approach? What can you add to this discussion? I invite your thoughts and comments on social media.

This article is adapted and shared with permission by Patrick Trottier