Culture Trumps Strategy Every Time

by / Thursday, 26 December 2013 / Published in Shaping Culture
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Credicorp’s Walter Bayly explains:

Developing our leaders means shaping our culture so that people can perform. It is about finding a fit. I have learned in business that if it doesn’t feel right, it isn´t right. And our leaders must create the right performance-culture mix for our people to thrive. What are those elements of culture? That is for our leaders to discover.

What type of culture is necessary for leaders to create in order to foster organizational success?

The challenge for organizations and their executives is two-fold:

1.)  You may not have the culture you need to enact your business strategy and perform.

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2.)  And in the performance game, culture trumps strategy every time.

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Our research and work with organizations across the globe demonstrates that when leaders shape a culture that contributes to creating direction, alignment, and commitment (DAC) across the organization, the probability of attaining superior performance is quite high (Dinwoodie, 2011). The key question is how do leaders go about creating a shared direction, coordinate work processes, and maintain commitment to the collective? This process of creating DAC may vary greatly depending on the predominant leadership culture.

Looking at the chart below, you can see that the approach to setting direction, for example, could be rooted in compliance (dependent culture), influence (independent culture), or shared exploration (interdependent culture). Similarly, the cultural approach to creating alignment and building commitment will vary depending on what leaders consider will be most effective in their particular organization to achieve their desired performance outcomes.

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When you understand how people decide on a shared direction, coordinate work, and maintain commitment, you’ll have a better sense of your organization’s leadership culture. From there, you need to determine if you have the culture that best supports strategy execution.

The leadership strategy process helps leaders with this analysis of culture. It allows them to see and articulate the formal and informal elements of culture in your organization and evaluate the extent to which culture will support – or prevent – the success of business strategies.

Adapted fromWhite Paper:  Bridging the Performance / Strategy Gap: How leadership strategy drives business results

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