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Kathy Davis: Does Culture Trump Strategy?

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I am a CEO, not a psychologist, so what do I know about culture and human behavior?  Maybe nothing, but in my 30 year experience, it’s hard not to reflect upon the notion that who we are and what we do plays out daily throughout the culture of our organizations. As a business leader, you can build the most sophisticated strategy, gather the best talent and execute on queue. But it doesn’t mean you will be successful.

Enter “culture” or “the way we do things around here”. It permeates every organization and has the ability to either support or destroy even the most critical initiatives.

For example, the story of “new Coke” is widely recalled, but the context is often forgotten. In 1985, The Coca-Cola Company’s market share lead over its main competitor had been slowly slipping for 15 consecutive years. The cola category in general was lethargic too. Thus, consumer preference for Coca-Cola was dipping, as was consumer awareness. As a result, they changed the secret formula, adapting to a formula preferred in taste tests of nearly 200,000 consumers. However, the taste tests did not consider the extreme bond people had with their coke and the company made history from an unfortunate business decision.

For business leaders, this infamous case study emphasizes that even the best strategy means nothing in isolation. If the strategy conflicts with how a group of people already believe, behave, or make decisions, it will ultimately fail.

Cultivating the culture you want should be a matter of defining the culture and then acting consistently in a way that positively impacts how the people around you think, feel and act. But is it really that simple?  If it is, why do so many organizations fail to successfully implement strategic initiatives?

There are many reasons and it starts at the top. Experience tells us that simply because a plan has been implemented and everyone is on the same page, the results may not be as intended. Business owners, CEOs, and presidents must be fully committed and fully understand how a strategic plan can improve their enterprise. A recent Economist Intelligence Unit report, sponsored by the Project Management Institute (PMI), surveyed 587 senior executives globally on the success of global initiatives. The respondents reported that the number-one reason for the success of strategic initiatives at their organization is leadership buy-in and support. Nevertheless, only half of those surveyed stated that strategy implementation as a whole receives appropriate C-suite attention. Moreover, 28% admitted that individual projects to implement strategy do not obtain the necessary senior-level support. This lapse in leadership buy-in has a direct impact on the success of implementing strategic initiatives.

Likewise, if you’re like me, you’ve tried many techniques, programs and initiatives to improve culture throughout the organization, only to have the initiatives fail the first time a senior leader chooses not to follow them.  Your staff says, “Why should I do this when she (and he/she points at you) does not?”  It’s unquestionable; everything leaders do, say and don’t say is picked up and mirrored in the behaviors of peers and staff.  Because of its impact on the rest of the organization, leadership behaviors drive culture and ultimately organizational performance.

It is prudent then to assess your culture first when developing strategic initiatives.  Does the current culture (mindsets and behaviors) align with the culture required to successfully realize your initiative? If the mindsets, behaviors, and strength of the current culture place the initiative at risk, ask yourself whether you should/can deliver the promised results in a way that is more consistent with the current culture. If you answer yes, then you are set. If you answer no, then it’s time to scrap it and move on. You may even determine that fostering a new culture is necessary to achieve the strategic initiative. If so, make sure to pay attention to appropriate timing and communication to key internal groups. This will ensure that you are able to build the momentum and critical mass required for success.

The next time you are under the impression that a strategic initiative is not impacted by your company’s internal culture, you may want to take a step back and reassess. Culture will inherently trump strategy every time if your organization’s leadership does not make efforts to align them.

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Kathy Davis_112013Article Provided By Kathy Davis, CPA, CGMA, MKS&H Managing Partner.

About MKS&H:

McLean, Koehler, Sparks & Hammond (MKS&H) is a professional service firm with offices in Hunt Valley and Frederick. MKS&H helps owners and organizational leaders become more successful by advising them regarding their financial, technology and human capital management needs.

Originally posted by Kathy Davis on February 18, 2015 at 5:29pm

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