Why is it that everyone sagely agrees with Peter Drucker’s aphorism that culture eats strategy for breakfast but the vast majority of companies spend far more time on their strategy than their culture? We organise strategy offsites, strategy departments are set up, extensive strategy documentation is developed, expensive strategy consultants are engaged and we present strategies for endorsement to our boards. Yet for most companies any focus on culture is simply well-meaning lip service or a part-time hobby for an overstretched HR department. Is this because defining and progressing towards a target state culture is hard? Is it because demonstrating that culture yields direct business benefits is not possible? Is it because we do not really believe Peter Drucker?
As I wrote in the first post in this blog the single biggest insight of my career to date is that transformation is about people. Processes and technology do not change themselves. People drive change and to drive transformation at scale you need to create any army of engaged and motived people. There are many stats quoted (mainly in the presentations from those highly paid strategy consultants) on the low percentages of successful transformation programs. These failures are often due to the lack of focus on culture, not the application of the wrong strategy.
More and more strategies are centred around digital transformation. Successful digital transformation is not about the blind implementation of new technologies but the mindset of continuously improving customer solutions by the application of suitable technology. True digital leaders are impatiently curious about what works and what does not. This is a culture issue not a strategy issue – digital culture eats digital strategy for breakfast, lunch and dinner. Strategy, digital or otherwise is important in setting direction but sustained execution depends on behaviours. Yet pretty well everyone I speak to agrees that in their companies there is much more focus on digital strategy and little or no attention to the behaviours. Part of the reason is because how to develop corporate culture is not taught in business schools, it is not role modeled by leaders – it is new for most people. The good news is that more and more companies are believing in the importance of developing a digital culture although are not sure exactly how to go about it. The even better news is that it is not difficult if you are prepared to focus on it. Here is the high level approach.
- Be explicit about your desired culture. Corporate culture is the sum of the behaviours of the people in the company. You should define the desired behaviours that are going to enable the purpose and accelerate the strategy of the company. This helps to address the link between culture and business outcomes. At DBS we set out to be a 27,000 person startup as we wished to operate at speed and at scale. Clearly we were not a startup, we were a fifty year old bank but we precisely defined the behaviours of a startup that we wished to emulate.
- Build a dedicated program to develop the future state culture based on the “culture by design” approach that we pioneered at DBS and set out in the book Eat Sleep Innovate that I co-authored with Scott Anthony, Natalie Painchaud and Andy Parker. I shall be writing more about this in future posts so you do not need to buy the book to learn more but essentially you will need to address culture blockers through the conscious introduction of rituals, vocabulary and enablers.
- Measure progress. The future state culture must be defined in terms of observable behaviours so that progress can be measured and issues identified.
The corollary of the afore-mentioned “one big insight” that transformation is about the people is that corporate culture is an important asset of the company. The leadership of a company are the custodians of this asset. The board should ensure that culture is nutured and developed by the leadership. There should be culture offsites and teams dedicated to defining and developing the culture. Progress should be reported in annual reports
And of course if you need a highly paid culture consultant you know how to reach me!!!
- Spend as much time (if not more) on culture as you do on strategy. Culture improvement is your most powerful execution enabler!
- Be explicit on the behaviours that are required to deliver on your strategy. This is your future state culture.
- Implement a program to develop the future state culture.
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