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Culture Ate Strategy For Lunch — Now It’s Eating At Your Value

CEOs continue to struggle with is what a good culture is for their business and how to operationalize it. They are running out of time to figure it out, too.

Reading the pulse of the organization

Culture work typically has a catalyst — commonly a shift in strategy, a new CEO, a merger or acquisition, digital or functional transformation, regulatory changes, increasing calls for inclusivity, or unethical behavior events. As a first step, senior leaders should ask questions to determine what needs to be done, evaluating their catalyst and identifying how it can or should shift culture:

• Are we trying to achieve new things with old ways of working?

• Do we have a clear view of the culture we have and need to have?

• Do we, as leaders, set the right tone at the top? Not just a nice tone based on our style, but the right tone for our business? Do we live it consistently?

• How are we operating today, and how will it change in the face of transformation?

• Is our culture an asset or impediment to a desired change in our business strategy?

• Are there skeletons in our closet? Would we rather know and do something about them, or ignore and hope nobody gets hurt?

The answers to these questions can initiate a movement. To quantify progress, you’ll need to assess data from employees, customers and shareholders to create a baseline of where you are, and establish regular check-ins over time to track progress. Most of this data already exists, and advancements in analytics and technology make it easier than you might expect to gather, use and learn from it. With this information in hand, leaders can determine what the company should keep doing, stop doing and start doing to best drive the strategy.

Social mapping

Before moving toward new ways of working, leaders need to clearly understand the social network of the company – who actually connects to whom and who has the largest influence. Every company has a formal structure and an arguably more important informal social structure. This is part of your culture; if you don’t see it today, you need to. The real influencers aren’t always the people in senior leadership roles, and as such, the vast majority of companies have no clue who can really help them shift culture.

To identify your influencers, examine the “digital exhaust” of your company. Using data for example, from email traffic and calendaring, it is possible to create social maps and determine how people are influenced. This analytic method, Organizational Network Analysis (ONA), is used globally to better understand and measure certain aspects of culture. It allows leaders to identify areas for impact and to design change to and through the real influencers in the business.

Top-down and bottom-up

While it’s true that behavior is modeled from the top down, pushing a new way of thinking on others isn’t an effective strategy for operationalizing culture. Executive sponsorship is key, however. To get that buy-in while allowing the real work to happen on the ground, adopt a “rocks and boulders” approach.

At the senior level, identify the big boulders, like governance, operating model, performance systems, rewards systems, and business processes that must change to shift and sustain new ways of working. Prioritize one boulder at a time, so that senior leadership can put their collective shoulders into rolling it forward.

Outside of the senior leadership team, identify the influencers who are open-minded and ready to do things differently. With these people at the forefront, plan small changes for local teams by creating an environment conducive to learning and adopting new behaviors. Over time, these new behaviors (the rocks) create new norms that can be promoted to other teams as a new way of doing things. When enough rocks move, they create an avalanche, resulting in the force needed to truly make a culture shift.

Shape up or ship out

Everyone who works in your organization contributes to your culture. We are each accountable for how we show up every day. One bad egg is all it takes to disrupt harmony, prompt a new wave of employee turnover, damage client relationships, or even drop your share price.

It is past time organizations got serious about stopping bad behavior. In part, this means working on self-awareness, so that everyone understands the impact they have every day on trust, safety and performance. Unfortunately, some people just won’t get on board. So it also sometimes means removing people whose actions are detrimental to the cultural health of the organization.

Aligning culture across every level of the organization so that it enables your strategy is essential to moving with agility in a time of unprecedented change. As external pressure mounts, leaders should take action to create a blueprint for purpose and culture that delivers short- and long-term value for employees, customers and investors. Culture isn’t the soft stuff, it’s the real, human stuff. And it’s time we got that right for each other.

EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Neither EY nor any member firm thereof shall bear any responsibility whatsoever for the content, accuracy or security of any third-party websites that are linked (by way of hyperlink or otherwise) in this article. The views expressed are those of the author and do not necessarily represent the views of Ernst & Young LLP or any other member firm of the global Ernst & Young organization.

Read more: Improving Your Culture Must Be An Obsession


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