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Organizational culture can either promote or inhibit new strategies. So, it is vitally important that strategy and culture complement one another. But, should strategy be formulated to fit the culture, or should culture be altered to align with strategy? Here we look at the interrelation between strategy and culture, and the issues involved in changing organizational culture.
How Does Culture Impact Strategy?
Organizational culture is the collective experience and taken-for-granted assumptions of those within the organization. These combine with the norms, beliefs and values held by individuals and groups to influence organizational practices and events. Culture has a strong impact on the behavior of individuals and groups: it outlines the established norms and traditions (‘how things are done around here’); offers shared meaning to those in the organization; and deals with innate values and beliefs, which people generally act in accordance with. Because of these, any strategy that conflicts with the established culture is likely to come up against strong resistance. Conversely, strategies that complement the existing culture are more likely to be accepted and implemented successfully.
But, what happens when a strategy requires a significant departure from the established culture? Should the strategy be altered, or should leaders attempt to change the culture?
The easiest solution is to change the strategy to fit the culture. Small changes to align strategy to culture can indeed mean the difference between successful implementation and failure. However, compromising the strategy too far can limit its long-term value for the organization. If the basis of a strategy requires fundamental changes to the culture, the organization may have to address culture change. For example, with the emergence of new technology and the demand for intelligent digital data, Ordnance Survey could not have transformed their traditional map-making organization into the state-of-the-art company they are today without a major culture change.
Changing Organizational Culture
At the best of times, organizational culture can be a tricky concept – it is notoriously difficult to identify and understand, let alone change.
Cultures are relatively stable, highly dynamic and notoriously difficult to change.
Culture is difficult to change because of people’s reluctance to let it go – it is familiar and safe, it allows them to maintain social acceptance within a group, and it provides direction. (These comfort factors are especially important to people during times of change.) Subcultures can also make organizational cultural change difficult. Subcultures can exist within departments and teams that have their own set of shared values and beliefs. They are difficult to identify and understand, and can be particularly resistant to change.
Analyzing Culture
Before embarking on any cultural change program, it is important that senior management analyze the existing culture to assess the fit with strategy. This can be done through a combination of discussions with employees, leaders and key opinion makers; employee survey questionnaires; work observation; interviews; and performance analysis. [1] Senior management should look at the existing culture in relation to the strategy to assess:
- The gap between the existing and desired culture
- The strengths and weaknesses of the culture in relation to the strategy
- How the strengths can be exploited and the weaknesses diminished
- If the organization should continue to perpetuate the present culture or if it should be changed
If the analysis highlights a conflict between strategy and culture, management might first look at if and how the strategy should be altered. If altering the strategy is not feasible, they might look at where and how culture should be changed.
Techniques to Alter Culture
Andrew Brown outlines some mechanisms for influencing culture:[2]
1. Structural change
Restructuring teams, departments or functions in order to create new hierarchies can help break up subcultures and promote the adoption of new rituals and routines. Restructuring helps demonstrate cultural priorities through task allocation, resource distribution, policies, budgets and procedures.
2. HR devices
Organizations can instill and enforce required behaviors by recruiting the type of people that will fit within the desired culture. Cultural messages and desired behaviors can also be communicated through induction, training, reward and performance-management systems. Rituals, such as parties and awards can also be used to reiterate what is important to the organization.
A consistent set of cultural cues continued over time can help to re-orientate the long-term culture of an organization. [3]
3. Leadership
Leaders have a major role to play if culture change is going to be a success. It is the responsibility of leaders to communicate the vision, reinforce and show support for the new culture in everything they do. Through their own behaviors and values, leaders can portray change positively, provide information and shape understanding.
Leaders can also influence behavior through their actions. For example, leaving their office door open, going to see employees rather than sending an email, etc. all add up to reinforce a more open and collaborative culture. However, their actions can easily contradict the desired culture. For example, a culture of autonomy and innovation will be contradicted through a command and control style of leadership. It is important for leaders to recognize that small actions can demonstrate powerful cultural messages. For example, saying that staff input is important but not creating a mechanism for soliciting feedback.
4. Involvement
Organizational culture can more easily be changed if employees are involved in the process. Members of the organization should be given the opportunity to shape strategy, analyze existing culture and experiment with new ways of working in order to gain their commitment to cultural changes.
Behaviors are relatively easy to change. Minds, however, are not.
A Word of Warning
Peter Elsmore carried out research into cultural change within large organizations in the 1990s.[4] His conclusions are illuminating for anyone involved in organizational culture change. He discovered that:
- Significant cultural change in large organizations is almost impossible in the short-term to medium-term.
- Top-down efforts to create and sustain cultural change usually fail.
- Staff can be put under considerable stress as a result of the demands of cultural change and changing work obligations.
- The strength of subcultures can equal or surpass that of the ‘officially promulgated culture’.
As a result of his findings, Elsmore provides recommendations:
- Managers in charge of significant numbers of staff require training in the area of cultural change.
- There should be considerable investment in development initiatives that encourage ‘bottom-up’ cultural change where change is directed upwards from middle and junior management.
- Priority should be given to diagnosing anti-cultural behavior and teaching new behavior. While he admits that diagnosing anti-cultural attitudes does not mean it will be possible to alter them, Elsmore believes it is far better to identify them openly than pretend they do not exist.
Conclusion
It is much easier to alter strategy than organizational culture. However, this is not to say that cultural change cannot be achieved. In fact, many organizations have claimed to successfully alter their culture. It is important to recognize that it will be difficult, there will be resistance and it will be a slow process.
References[1] Andrew Brown, Organizational Culture, Second Edition (Prentice Hall, 1998).
[2] Andrew Brown, (1998).
[3] Andrew Brown, (1998).
[4] Peter Elsmore, Organizational Culture: Organization Change? (Gower, 2001).
