Corporate Culture and Strategy Implementation
Folktales at FedEx abound about a delivery person who was given the wrong key to a FedEx drop box. So ingrained was the culture of “next-day delivery guarantee” that the delivery person unbolted the box from its base and took it back to the office where it was pried open. The contents were delivered the next day. It is not important whether this folktale is true or not. What is important is that this story illustrates Fedex’s corporate culture: every employee helps in the achievement of FedEx’s reputation of reliable overnight delivery.
All organizations have their own folktale. What’s yours? “This is the way we do things around here. ” Do you not tell this to every employee who joins your organization? Your organization has its own work environment, its own way of doing things, its own processes and its own politics. How your organization approaches problems, what it believes in and its thought process defines its personality. This is what is corporate culture. It is born out of your organization’s beliefs and philosophies about why it does things the way it does.
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It is born out of how you with your stakeholders. Consistently doing the things you do results in your corporate culture. Culture is formed by screening and selecting new employees who share the same values as your organization. However, culture evolves, it is not static. Both internal (hiring, staff turnover, etc) and external (technology, competition, etc. ) factors shape your culture. Your beliefs, vision, objectives and business practices may be compatible with culture. If this is the case, your culture becomes a valuable ally in strategy implementation.
On the other hand, if there is conflict then you do not have a strategy-culture fit and you need to do something about it quickly. Strong cultures promote successful strategy implementation while weak cultures do not. By strong culture, I mean there is a shared belief in practices, norms and other practices within the organization that helps energize everyone to do their jobs to promote successful strategy implementation. For example, if your culture is built around listening to customers and empowering employees (both authority and responsibility), it promotes the execution of a strategy that supports superior customer ervice. In weak cultures, employees have no pride in ownership of work, work is sloppy, there are very few values and people form political groups within the organization. Such cultures provide little or no assistance to implement strategy. Some time ago, I was working with a small business that in the software industry. They had been in business for a number of years before I was brought in. One of the things I noticed initially was that there was constant re-work; i. e. bulk of the developers’ time was spent in fixing bugs instead of new development work. Deliverables were always late.
Customers who did receive the product found the software buggy. The organization’s reputation suffered as a result. To combat this we initiated a number of measures; from letting unprofitable customers go to introducing time tracking, etc. But we forgot the most fundamental aspect; to initiate a change in the culture. Developers looked at our initiatives with skepticism. I was told statements like “This will never work” or “Wait for a few days and we will revert back to the old way of doing things”. We did eventually figure it out and started to implement a change in culture.
Changing a culture is the toughest of all management tasks. It takes time to change unhealthy culture and you may have to weed out obstacles to a healthy culture. This experience was a valuable lesson for me. In weak cultures, people do not take risks that is needed to succeed. They believe in moving cautiously, preferring to follow than lead. In today’s dynamic business world, strategies are dynamic. Hence, it is but logical that your organizational culture has to be dynamic too. It needs to adapt to the demands of business. In such cultures, all employees have confidence in the teams ability to meet any challenge.
In my professional career, I have always taken the approach of doing whatever is necessary to ensure organizational success within the bounds of organizational core values and beliefs. As a CEO you need to encourage this culture. In fact, you should consciously seek, recruit, train and promote individuals who exhibit such entrepreneurship capabilities. Edited: March 30, 2007: Here is a link to Skip Reardon’s summary on corporate culture that you may find interesting. Here is the link to the article by Bain that Skip mentions in his post.