culture and strategy

Have you have ever worked in an organisation, or in a division, where senior leaders have proposed a new strategy or idea, and you instinctively had that gut feeling it wasn’t going to fly?

It is not by accident that the quote “culture eats strategy for breakfast”, typically attributed to late management consultant Peter Drucker, has found much resonance in business writing. Organisations have always struggled with bridging the gap between strategy formulation and effective day-to-day implementation. Given the rapid pace of change, for many organisations, this gap is widening significantly. Research from the Economist Intelligence Unit suggests that “62% of strategic initiatives fail to deliver the desired performance results.” In other words, no matter how smart your strategy, without buy-in from your teams, it’s unlikely you’ll realise the benefits.

A couple of months ago, I was interviewing Rob, a client relationship manager working for a large financial institution. His division had appointed a new leader, and I was interested to hear how the implementation of the new strategy was going. Part of the change was structural, and it meant changing the way clients are allocated to account managers. When I asked Rob how things were going, he said that he’d spoken to his colleague and they decided among themselves that they were not going to bother and keep allocations the way they were. He said that another leadership change and a new strategy would probably happen within the next two years and disrupting the client relationships that had been built over the years just didn’t make sense. Sound familiar? It doesn’t mean that the strategy wasn’t sound; it just didn’t fit with the way people think, act and engage with others.

But what is the cultural paradigm of your organisation and how does it influence your ability to implement new strategies and progressive ideas? To understand the shift in thinking that is required, it is useful to understand where we’ve come from. In his book, Reinventing organisations, author Frederic Laloux has done some ground-breaking work in describing the evolution and transformation of consciousness in organisations, which has allowed us to progress from simple tribal structures to most complex interconnected organisations of today.

Here is a very simplistic synopsis: If we look back a few hundred years in history, we find that the ability to scale meant strategic advantage. This meant that leaders needed to deal with a level of complexity that hadn’t existed before. Leading people in their 1000’s (like an army, for example) required hierarchical structures and a command-and-control type approach to ensure everyone was pulling in the same direction. Planning and execution of strategy was strictly separated, with the formulation of strategy happening at the top and execution at the bottom. Fast-forward a hundred years or so, and we find that a different worldview starting to take hold. Rather than the tradition-driven view of authority has the right answer, the next evolutionary step was all about expert advice and scientific reasoning. It's an evolutionary shift that brought about advances such as entrepreneurship, innovation and accountability and with it, unprecedented levels of prosperity. However, there is also a dark side, and many of its consequences (e.g. reckless exploitation, materialism and overconsumption) are all too familiar to us today. To address the shortcomings of this results-driven worldview, many organisations have started to operate from more of a pluralistic paradigm, which values fairness, equality, community and cooperation.

But why is reflecting on past paradigms important for us today? Today we are faced with challenges that cannot be resolved with a worldview from the past. We are trying to build organisations that are agile and adaptive, but we still have systems, structures and ways of working that are stuck in these old paradigms. In a networked world that requires us to be adaptive, a traditional structure and the bureaucracy that goes with it no longer serves us.

“We are asked to invent the future, but to do so inside a culture of that is deeply broken.” - Aaron Dignan

It’s the next evolutionary shift that makes Laloux’s work so interesting. He has focussed his research on a growing number of pioneering organisations that have shifted their paradigm to allow them to deal with a more complex, networked world. And they are delivering value beyond what traditional organisations have achieved in the past. Laloux refers to these organisations as evolutionary, and unlike the paradigms described before, these organisations have less of a need to predict and control the future, but rather focus on evolving in a way that allows the organisation to serve its purpose. Concepts such as self-management and wholeness are some of the revolutionary new ideas attributed to this paradigm. For example, rather than just bringing a narrow “professional” self to work, we bring all of who we are to work – it is about us, growing as individuals and teams to become the best version of ourselves - with purpose the guiding principle for decision making.

In terms of our culture, it’s not either or, but in specific moments, we tend to operate from a specific paradigm. If the predominant paradigm from which the organisation operates is results-driven, siloed and individualistic, it will be difficult to implement a strategy that requires adaptability and the collective input from teams. If our rewards mechanism, rewards competitiveness, it will be difficult to get individuals to operate from a space that requires trust and collaboration.

How would you describe the predominant paradigm of your organisation? What should it be?