How to Align Culture to Support Your Strategy

Over the years, much has been written about culture. All too often, publications have left the reader with a very academic or “touchy feely” perspective on the topic. Culture is comprised of 1) a set of characteristics, such as centralized or decentralized decision-making; 2) values: a set of beliefs that shape our view of reality, such as integrity, respect and empowerment; and 3) behaviors: observable actions that shape the way people act and react, such as demonstrating initiative and taking risks.

This article discusses five steps for transforming an organization’s culture:

Step 1: Understand your business strategy. The starting place is to develop a formal plan and fully understand the implications of your business strategy on the culture of your organization. The key areas of focus include your vision/mission, enterprise-wide scorecard, and planned/ongoing strategic initiatives.

Step 2: Determine future state culture. Translate the business strategy into a short list of future-state cultural characteristics, values and behaviors. This step is usually an iterative process that requires several meetings to incorporate feedback from a diverse population of stakeholders, including your executive leadership team, employees, suppliers, customers and channel partners.

Step 3: Map current culture. Our firm has developed a proprietary database of more than 500 different cultural characteristics we use to customize surveys, interviews and focus groups to map the current-state cultural characteristics, values and behaviors. Figure 1 includes an excerpt of a culture map that details how you can visually depict the similarities and differences between your current and desired cultural characteristics. You can visually depict the current characteristics (C) and the desired characteristics (D) to note areas of convergence and divergence.

Step 4: Identify culture gaps. Conduct a gap analysis to identify the disparity between the desired and current-state cultures. Specifically, a number of structured meetings are facilitated to identify and prioritize gaps between the current cultural characteristics, values and behaviors, and those that are future-state. Pay careful attention to those that must evolve to be successful in the future. The focus is to not change everything, which is impossible, but to focus on a finite list of cultural characteristics, values and behaviors that MUST change to successfully deploy your strategy!

Step 5: Create and execute culture alignment plan. Most leaders and business owners don’t understand that an organization’s culture is an output of your organization’s business model. A number of factors ultimately determine your organization’s culture, such as the amount/type of technology you use, the leadership styles of your management team, performance management practices, and compensation and hiring practices.

Therefore, culture can be modified over time by minimizing undesired characteristics, values and behaviors and enhancing desired ones. An example of a high-level culture alignment plan appears below.

By modifying specific attributes of your organization, you can evolve the culture over time. The key is to understand the link between inputs and outputs. If you modify such factors as your recognition, compensation, metrics and performance management practices, then cultural characteristics, values and behaviors will change over time.

Culture serves as a semi-permeable boundary in terms of what an organization can achieve. Cultural characteristics, values and behaviors drive organizational outcomes. Organizations that are able to align their culture to closely support their strategy are better able to transform themselves when market conditions dictate and will typically outperform their competitors.

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About the author

Ronald J. Recardo

Ronald J. Recardo

Ronald J. Recardo is the managing partner of The Catalyst Consulting Group LLC. He can be reached at rrecardo@catalystconsultinggroup.org.

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