Schein, Professor Emeritus at the MIT Sloan School of Management, is famous for his quotes on organizational culture, which are often recited in the world of HR and organizational design. “The only thing of real importance that leaders do is to create and manage culture,” is one of my favorite Schein quotes. “If you do not manage culture, it manages you. And you may not even be aware of the extent to which this is happening.”
I consider the work of “managing culture” akin to guiding and fostering the people, philosophies, and practices of an organization in a direction that is authentic and ideally a positive force toward the company’s vision. Yet when we consider the typical management structure of organizations, strategy and being strategic seems to pull everything else behind it. It’s truly one of the most overused and poorly understood set of expressions in the world of work today. Strategy tends to be equated with a company’s secret sauce—the means by which it will best the competition, win the marketplace, and make owners, investors and shareholders do cartwheels.
But strategy is not the same thing as culture, much less vision. To quote another academic theorist, Peter Drucker, “Culture eats strategy for breakfast, lunch and dinner.” The inference is that a happy workforce is a productive workforce, correlating directly with business success.
Words, Words, Words
Regrettably those three words: “strategy,” “vision” and “culture,” while vital to an organization’s success, are in the wrong order of importance to the business and the people within it.
Here’s my quick glossary of what each of these words means:
A “vision” is a compelling picture of a future state and goal, a clear, simple, aspirational statement of where an organization needs to go and what it needs to become to succeed and differentiate in its marketplace. Often, a company’s vision is articulated in a statement. For example, Oxfam envisions “a just world without poverty.” It can be daunting to create a vision, as we often fail to see ourselves as visionaries, or we may fear that our vision will not be realized, or worse, might be wrong. But I believe we all have the capacity to create a vision, and the value it creates is far greater than the alternative, a strategy with no vision, a ship without a compass.
A “strategy,” by contrast, is a bit easier to define, it takes discipline to execute, but anyone can roll up their sleeves and build the steps to achieving a goal and vision. A strategy is simply the broad plan of action taken by an organization to achieve the vision it has in mind (tactics, on the other hand, are the means by which the strategy is carried out).
Now let’s turn to “culture,” a word that means slightly different things to different people. In a business context, culture is the collective beliefs and behaviors governing how management and employees share knowledge and interact. These activities are often a byproduct of the organization’s history, leadership values, and management style—such as hierarchical command and control management methods or more free-thinking and collaborative ones.
Schein refers to culture as a “pattern of shared basic assumptions that … has worked well enough to be considered valid … passed on to new members as the correct way to perceive, think, and feel in relation to those problems.”
Some business academics refer to a company’s culture as its personality, unifying force and soul. Other theorists describe it as the sum of what it is like to work in an organization—the aggregate experience of all stakeholders culminating in a sense of collective purpose, belongingness, and identity.
Our definition at Ultimate also focuses on people. We see culture as a self-re-enforcing framework of thoughts, actions, and philosophies that determine how people experience their work lives, and how the organization treats and interacts with employees and customers.
When Cultures Collapse
I appreciate these varied descriptions, in part because they underscore the fact there is no one perfect culture that fits all organizations. Each culture must be hinged to a clear vision depicting where the organization is headed. Some cultures prize trust and loyalty, while others elevate autonomy and recognition. The point is that all cultures have specific attributes that influence organizational behaviors.
When workers are clear about the company’s vision and feel their work has purpose and meaning, the business generally flourishes. For example, at companies where employees feel senior leaders regularly listen to them, 86 percent define the business as having a “strong culture,” according to a CultureIQ survey.
While the best cultures do tend to satisfy members’ needs, those that are destructive do not. In such cases, people often are unclear about the organization’s vision, giving them feelings of disengagement and distractedness. Productivity declines, reverberating at the bottom line.
Why am I so caught up in culture? The answer is that workforce cultures are under extraordinary pressure today, in part due to digital transformation. Organizations of all sizes are seizing market opportunities and solving business problems using new technologies, which can be fantastic for business and will create many new opportunities for people… provided we are thoughtful about the changes and their impact on our organizational cultures. Machines are expected to handle more than half of workplace tasks by 2025. Jobs, not people, will be redundant, according to The Future of Jobs 2018 report.
In their eagerness to change current operating models, my apprehension is that companies will fail to consider the lasting technological implications of these investments on culture and the quality of employees’ work. Will the work they do be meaningful, purposeful and valued?
I recall a quote attributed to Marshall Goldsmith, author of the best-selling business book, “What Got You Here Won’t Get You There.” “If you know what matters to you, it’s easier to commit to change,” said Goldsmith. “If you can’t identify what matters to you, you won’t know when it’s being threatened. And in my experience, people only change their ways when what they truly value is threatened.”
If culture is swept under the rug as leaders focus primarily on the strategic value of digital and data transformation, people will feel threatened—to the detriment of the organization. A new culture without historic antecedents, expectations, and loyalties could surface—one not necessarily as productive as the prior culture. But there are alternatives, in fact, Prof. Schein writes, “In most organizational change efforts, it is much easier to draw on the strengths of the culture than to overcome the constraints by changing the culture.”
A New Order
To be fair, many companies’ digital and data transformation create the means to rethink culture for the better. By understanding the impact of change on the workforce, steps can be taken to reinvent the culture to be more relevant to employees’ work needs and career aspirations.
Given the value of culture, it makes sense to reposition those three words from their traditional order. Here’s my take: Once an organization’s vision is articulated, the unified efforts of the workforce culture guide a winning strategy to achieve superior outcomes. Vision, culture and strategy. A new order.