I was initially alarmed and dismayed by a headline in the April edition of Harvard Business Review, only to settle down in understanding and agreement once I had read it properly. Titled “Culture is not the culprit” by Jay Lorsch and Emily McTague, the authors analyse four companies through the lens of CEO leadership and strategy, and make the case for focusing upon business basics, rather than culture, as the solution.
In the analysis of Ecolab, Delta, Ford and Novartis, they establish a common theme of merger, acquisition and turnaround activity across the cases that suggest that key structural, process and operational issues need to be addressed before the business may succeed, and that focusing upon culture first, or alone, will be a shortcoming.
Upon reflection, I fully agree with the sentiment. An organisation under siege, in dire financial straits or undergoing major change requires strong leadership, clear strategy, appropriate structure and strategic implementation if it is to succeed. In no way can you merely aim to deploy a new culture as the total solution to the business in the hope that it will resolve all operational imperatives in isolation — this is tantamount to fairy-tale fantasy.
Culture as part of strategy
Conversely, culture should not be left out of the equation. A clear strategy, structural realignment and the necessary resource deployment may drive new values and behaviours in a business, shaping a new culture in the process and significantly contributing to strategy implementation. Lorsch and McTague acknowledge this in the article, and suggest that new culture formation was a key output in each of the cases analysed, morphing along with the company’s competitive environment and objectives.
In 2004, when Tom Boardman took over as CEO of Nedbank on the back of an Old Mutual bailout and recapitalisation, he did exactly that. In shaping a new strategy for the bank, he inspired a vision-led, values-driven approach that was also part of a business-turnaround strategy, and “Make Things Happen” became a key internal rallying cry toward a whole range of business process improvements and gains in key banking sector metrics, as much as it was an external marketing proposition in becoming a bank for all South Africans. Reshaping the values, culture and behaviours of the organisation were central to the turnaround strategy but were certainly done in tandem with a wide-ranging restructuring of the bank.
A contradiction in terms
This is in sharp contrast to those organisations which pay lip-service to culture or see it as a possible quick fix in a situation where a business is experiencing deep-seated problems. Sadly, lipstick on the pig is not a sustainable model, and an authentic and real solution is what is required. Businesses experiencing crises in some form or undergoing traumatic merger- or acquisition-change do need to ensure that the business fundamentals are in place, supported by a clear sense of purpose and a newly articulated strategy to realise it.
Only then may new values and culture be shaped, deriving shared meaning and a reconstituted set of norms, behaviours and actions that will enable the future and the realisation of an intended vision.
This article was originally published on Marklives.com