While strategy is critical to business success, the importance of culture should never be underestimated. How can HR help to get that balance correct?
“Culture eats strategy for breakfast”- Peter Drucker.
However, it should be kept in mind that “if you don’t have an effective strategy, you won’t get much for dinner,” says Michael Gourley, Asia/Pacific Director of Human Synergistics International.
In this famous line, Drucker is obviously not downplaying the importance of strategy. What he is saying is that, regardless of the organisation’s strategy, it can only be successfully implemented if the organisation supports its execution.
The importance of culture is emphasised by Satya Hadella, the head of Microsoft, when he says: “Technologies come and go. What we need is a culture that allows you to constantly renew yourself.”
This is reiterated by Deputy Prime Minister Tharman saying that “Singapore can only realise its aim of being an innovative economy if the culture of innovation was pervasive across society. In particular, this involves the leadership and organisational culture within large and small companies that enables incumbents to manage both the need for efficiency with the space required for innovation.”
For this to happen, people need to be able to contribute ideas, coordinate what is happening in different parts of the organisation, and be rewarded for taking risks and being innovative. Instead, there are too many organisations that have Passive/Aggressive cultures which do not facilitate innovation. They encourage people to play it safe and keep out of trouble.
Leaders need to learn what is required to leverage culture in order to build outstanding organisations. Research by Rob A. Cooke PhD, CEO and Director of HSI, has identified 31 causal factors that drive the operating culture of organisations and influence their effectiveness. These, he has measured through his Organisational Effectiveness Inventory® (OEI). In conjunction with the Organisational Culture Inventory® (OCI), these assessments are the most widely used culture surveys in the world. The OCI has received the endorsement of Edgar Schein, the leading academic on research into organisational culture, as the only measure available on organisational culture.
Their findings are outlined in the white paper Building a Culture for Innovation. They include job design, participation, empowerment, leaders encouraging involvement, decentralisation of decision-making, teams communicating, and reward and HR systems. These factors shape either an effective Constructive or ineffective Defensive organisational culture.
Effective leaders understand these causal factors and know how to leverage them to have a positive impact on members, groups/teams, and the organisation as a whole.
People infer what is expected when these factors are applied in constructive ways, and this results in productive behaviour that has a direct relationship to the performance and the profitability of an organisation.