Managing culture for strategic success

Citation

Vaisnys, V. (2000), "Managing culture for strategic success", Strategy & Leadership, Vol. 28 No. 6. https://doi.org/10.1108/sl.2000.26128fab.002

Managing culture for strategic success

Managing culture for strategic success

Vaiva Vaisnys

Abstract Culture is the personality of the organization. It sets the tone for behavior and interactions within the company and deeply influences how strategies are implemented. The author discusses how organizations must "manage" their cultures by tending to various touch points, e.g. compensation programs, communication, policies and perquisites, which reinforce how employees experience their company's culture.

Keywords: Corporate culture, Compensation, Communications, Organizational design

The speed with which things happen in the new economy has forced companies to reevaluate how they go about executing their strategies. Variables such as processes and costs continue to play an important role in reaching business objectives. However, now more than ever, people – and the company's ability to attract, retain and mobilize them – play a critical part in realizing business objectives. And, to the degree to which a company's culture provides the context within which people work and the intangibles that employees are looking for (such as achieving work-life balance or working in organizations where there is more flexibility in schedules), culture itself has become a variable that needs to be actively considered, evaluated and managed as part of the company's strategic mix.

Culture is the "personality" of an organization. It is the embodiment of company values and norms as they exist in practice. It sets the tone for behavior and interactions within a company. Simply put, culture deeply influences how people work together to identify and execute a strategy. Therefore, it needs to be actively managed to ensure that it is supporting and facilitating an organization's goals and objectives. Left unchecked and unmanaged, a culture can develop characteristics that work counter to what a company is trying to achieve.

Managing culture as a brand

There is a phrase that is occasionally used in marketing called "touch points," referring to all the ways that consumers come in contact with a particular brand. The goal in marketing is to ensure that every touch point – whether it be product quality, packaging, customer service, advertising, or any other point of contact – communicates a consistent and positive message. The more consistent the message, the stronger the brand.

Similarly, given the degree to which culture permeates how a company operates, culture needs to be viewed as a "brand" and, therefore, must be managed. In other words, managers and employees alike need to be mindful of how people – internally and externally – come in contact with a company's culture and ensure that those touch points reiterate a consistent and positive message.

Because culture is embodied through actions, virtually everything that individuals do and produce can be a cultural touch point. Some of the more obvious touch points are, in fact, managed by companies. These include:

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  Compensation programs. Since the way people are rewarded influences their behavior, compensation programs can have a big influence on culture. For example, if a company's strategy is best realized through teamwork, then compensation structures should reward collaboration. If compensation is structured to reward competition among individuals, it will dilute the culture that the organization has identified as being beneficial given its strategy and goals, and will promote behavior that, in fact, is counterproductive.

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  Office layout. Many people get their first glimpse of a company's culture by stepping inside the workspace. The way the office is laid out and the décor can provide significant insight into a culture. Again, assuming that a company has determined that its goals are best realized through collaboration, an office area that is conducive to group work would be a consistent cultural touch point. Having cubicles and offices that keep people more isolated would be a disconnect given the type of behavior the company has determined is optimal to reach business objectives.

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  Communication. Everything from the tone of communication to the amount of information that is shared to the medium through which information is delivered says something about the culture. If, for example, a company's leaders want an open and communicative environment because it facilitates teamwork, yet important information is delivered through formal periodic memos that come only from top managers, their method of communication is a mismanaged touch point. In this instance, if communication were managed in a manner consistent with the desired culture, messages would be delivered more informally, by a broad range of personnel, and would probably include face-to-face meetings so people could engage in meaningful discussion.

Often, however, the less obvious cultural touch points go unmanaged. Over time, this can dilute a company's culture because it sends mixed and inconsistent messages. Some less obvious touch points include:

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  Policies. Every company needs to have policies in order to be legally prudent. However, which policies a company chooses to have and the way they are worded and presented say something about the organization. For example, if an organization prides itself on having a culture built on trust, then having a very thick employment manual runs counter to that sentiment. Company leaders should select and craft their policies carefully and thoughtfully and use them as opportunities to reinforce important cultural elements.

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  Perquisites. Most companies offer some kind of "perks" and benefits to employees. The portfolio of perks may have developed over time and, as a result, may not make much sense in today's employment marketplace. However, with careful management, perquisites can be used to underscore some important cultural elements. For example, if a company prides itself on being "family-friendly," the portfolio should include perks and benefits that take the family into account (e.g. day care, family insurance coverage, family health-club membership) and not be targeted toward individual employees alone.

...To the degree to which a company's culture provides the context within which people work and the intangibles that employees are looking for, culture itself has become a variable that needs to be actively considered, evaluated and managed as part of the company's strategic mix...

A case in point

A company that has spent a significant amount of time managing its culture through touch points – particularly the less obvious ones – is Jellyvision, Inc., a company that develops interactive media experiences. (Jellyvision is probably best known for its award winning CD-ROM and Internet game, "You Don't Know Jack"1 and the top-selling CD-ROM for the "Who Wants to Be a Millionaire?"1 television show.) Owing to the efforts of the company's leaders, the culture is very strong and has served the company well in attracting, retaining and focusing employees. Jellyvision's culture is broadly characterized by collaboration, teamwork, trust, creativity and open communication. These cultural characteristics influence all company dealings, external and internal, large and small.

Jellyvision's organizational flow charts illustrate that the company recognizes that virtually everything can be a cultural touch point. The chart shown in Exhibit 1 literally and figuratively underscores every aspect of the company's culture. Collaboration and trust are depicted by the fact that if one person is plucked from the group, the whole structure collapses. Creativity is reflected in the unique approach to visually presenting the organizational chart itself. Open communication is not formally shown, although it can be inferred from the informal nature of the group, and the mere fact that everyone in the company has a copy of the chart demonstrates the openness of the company's culture.

Exhibit 1 The Jellyvision organizational flow chart

It is certainly true that simply having a traditional organizational chart will not destroy a culture. However, by recognizing that everything people in a company do and everything they produce can serve to reinforce a culture that is supportive of business objectives, business leaders can manage the culture to the company's benefit.

Developing a culture-management plan

Developing a culture-management plan begins with knowing what the organization's current culture is and what sort of culture would be ideal given the company's strategy and mission. Is the current culture supportive of business objectives, or are there elements that run counter to these goals?

Identifying the current culture is easier for some companies than for others. It depends on how strong and distinct the culture is. Some of the clues to a company's culture have been outlined in this article. Important information can also be gained by asking people who work in the organization how they would describe the culture.

Deciding what the ideal culture should be is a matter of reflecting on the long-term mission, vision and strategy of the company. In particular, it is important to identify the types of behavior that will best support the organization in reaching its objectives.

Once the current and ideal cultures have been defined, it becomes a matter of ensuring that what is working continues to be supported through touch points as the organization evolves, or designing a plan that begins to develop an improved culture through the active management of touch points. Either way, it is important to become aware of what the significant touch points are and to begin taking advantage of them to reinforce or modify the culture in a way that is supportive of the organization and its goals.

In summary

Culture is a product of actions by all company employees – past, present and future. It is not static, but it evolves over time, whether or not it is managed. Given the important role that it can play in supporting an organization's strategic objectives, it needs to be actively managed and guided. Consequently, organizations need to be mindful of all the ways in which culture manifests itself and ensure that it is reinforced (or, at a minimum, not contradicted) through all touch points.