Organizations are increasingly recognizing the need for transformative change to thrive. Business transformation and culture transformation are two crucial aspects that contribute to holistic performance.

This article delves into the significance of performance based on both business and culture transformation, shedding light on the interdependent relationship between the two.

Understanding the Dynamics of Business and Culture Transformation

When organizations embark on a journey of business transformation (be it e.g. restructuring, innovating new products, expanding to new markets, responding to disruptions that force them to change their way of operating, merging with another business, outsourcing capacities and processes), it becomes evident that culture transformation is a prerequisite for sustained success.

Why business transformation necessitates culture transformation

Business transformation necessitates culture transformation because all these above-mentioned business changes, in one way or the other, are managed by people.

They are now faced with having to do things differently, approach different relationships differently, communicate more and differently, and maybe need to reinvent themselves, step out of their comfort zone, and deal with fear or with being overwhelmed.

Culture becomes the driving force behind implementing new strategies and ensuring their successful execution.

Why culture transformation relies on the impetus of a business transformation

On the flip side, culture transformation also relies on the impetus of a business transformation.

Culture transformation without concurrent business transformation can lead to a lack of tangible manifestations of desired mindsets and values. Cultural change alone may not translate into sustainable embodiment and implementation if it does not align with the processes, systems, and structures within the organization.

Culture Transformation relies on the impetus of business transformation — A holistic approach, combining both business and culture transformation, is crucial to ensure that cultural shifts are effectively embedded and supported by the necessary organizational infrastructure.

By intertwining culture transformation with business transformation, organizations create a fertile ground for holistic performance, one that is driven by the hard goals and measures which are negotiated and integrated with the hearts and minds of the people who are making it happen.

The Impact of Business and Culture on Organizational Performance

Business and culture have a profound impact on organizational performance. While business elements such as strategy, operations, and financial metrics play a crucial role, the underlying culture sets the tone for employee engagement, innovation, and collaboration.

Let’s keep in mind these two aspects are not separate and need to be integrated at every step of organizational life. Here is an example to illustrate this.

The beautiful strategy example

So often, I see beautiful strategies that make total business sense, but when it comes to cascading it down into the organization to all the departments and teams who need to embrace it and execute it, a lot of unnecessary confusion happens.

Strategic focus lost in translation — In the translation from high-level goals and strategies to the operationalization of concrete and actionable initiatives and projects, often, the right focus gets lost or diluted.
Somehow many more initiatives get added because they are deemed necessary.

And since these additional initiatives are inhibiting the swift follow-through on the right ones, more initiatives get added from the top in the belief that the initial ones were ‘not enough’ to achieve the desired outcomes.

Here is when culture comes in. Even though most modern organizations claim to have an open communication culture, when it comes to driving strategic initiatives, most managers and employees collectively act in a very traditional top-down order-taking manner.

The goals communicated from the top are taken as written in stone; teams do not dare or are too busy to challenge back upwards if they need more guidance or clarity or if they see that something might not work the way it is defined currently; they just keep muddling through.

Attempts to challenge back so often remain unsuccessful because both the way they are communicated might be defensive and the way they are received is with a lack of listening and willingness to get to the root causes and a deeper understanding (in the midst of overfilled agendas and time pressure – because so many initiatives are on the plate and we need to keep cracking on).

There is only one way out: Strategizing and goal execution needs to be done in a culturally skilled way; simply said, it needs to become an iterative process that aims at

identifying the right initiatives with the highest likelihood of achieving the goals. This knowledge is typically not centered in one person or one team, nor in one level of the organization.
avoiding a dilution of focus by adding adjacent initiatives that suck up resources out of the main focus.

Just imagine this for a moment: An initiative running through three organizational layers, with only five departmental and cross-functional teams, each comprising 10-15 members. Every member adds a few ideas and assumptions around the alleged joint focus, which do not get discerned, disentangled, and channeled into what the top priority should be.

Then, each of these team members has conversations with other organizational members on a daily basis, and all these conversations add nuances about what the focus is…. I don’t have to continue here, it is clear how the lack of focus and level of confusion reaches exponential heights when nobody intended it.

At the same time, no single person is really to blame because the process and its underlying culture are broken in the sense that we all participate in it with a lack of skills and awareness. They need to be grounded in a constructive culture to make it work.

In order to get there, people need support and training to develop their constructive behavioral muscles. How do they start seeing the whole instead of their small area of impact and start acting with an enterprise instead of a silo mindset?

How do they learn to speak up and communicate their ideas and opinion in a non-defensive way that can be heard by their higher-level managers? And how do higher level managers learn to listen-up to their people and integrate their expertise into their strategic next steps and setting of priorities?

Only then are they able to work collectively towards focused execution, higher achievement and performance while employees gain a sense of empowerment and pride instead of more overload and more pressure.

Elements of Holistic Sustainable Performance: Bridging Business and Culture

Let's delve into these elements by referencing the concrete situations and examples I discussed earlier.

1. Aligned Strategies and Culturally Skilled Execution:

While strategies may make perfect sense from a business standpoint, their successful execution relies on cultural integration. We saw how confusion arises when strategies are not effectively cascaded to all departments and teams.

To bridge this gap, a culturally skilled approach is needed, where strategic initiatives become an iterative process. This involves identifying the right priorities, avoiding dilution of focus, and promoting constructive behaviors and culture.

For example, rather than a top-down order-taking approach, teams need to feel empowered to challenge back, seek guidance, and contribute their expertise to keep finetuning strategic execution and stay on focus.

2. Purpose-Driven Culture for Employee Engagement:

A purpose-driven culture is vital for sustainable performance. It brings together the business objective of achieving success with the cultural aspect of skillful and constructive collaboration.

We witnessed how a lack of clarity and communication hindered progress. Organizations must cultivate a purpose-driven culture where employees understand the greater cause behind their work and the enterprise behind their individual tasks. By aligning individual purpose with organizational purpose, employees become motivated, enhancing productivity and customer satisfaction.

3. Collaborative Leadership and Constructive Communication:

Effective leadership plays a pivotal role in holistic sustainable performance. Leaders need to foster a collaborative environment where open communication and constructive dialogue flourish.

We noted that traditional top-down approaches hindered progress and stifled focus on priorities, and this while organizations might not be aware of the fact that there is such a traditional top-down approach being enacted.

By promoting collaborative leadership, organizations empower employees to voice their expertise, concerns, and ideas. Leaders should create spaces to embrace a non-defensive attitude, actively listen to their teams, and integrate their expertise into strategic decision-making.

4. Continuous Learning for Adaptability:

Organizations committed to holistic sustainable performance prioritize continuous learning and development. We recognized the importance of training and developing the constructive behavioral muscles.

Such cultural programs enable employees to see the bigger picture and act with an enterprise mindset, take more ownership, and practice concise and constructive communication.

5. Stakeholder Engagement and Responsible Practices:

Sustainable performance extends beyond internal operations and the above-described strategic operationalization process. It encompasses stakeholders such as customers, suppliers, communities, and the environment. We need to acknowledge the significance of engaging and listening to these stakeholders' voices too.

Organizations should adopt responsible practices by integrating environmental, social, and governance considerations into their decision-making processes. By doing so, they build trust, enhance their reputation, and contribute positively to society.

In summary, by intertwining these elements of holistic sustainable performance, businesses can unlock their full potential. The integration of business strategies with purpose-driven cultures, collaborative leadership, continuous learning, stakeholder engagement, and responsible practices creates a framework for success.

This framework not only drives sustainable performance but also fosters a positive work environment, empowering employees and promoting a sense of pride and fulfillment.

Conclusion

Our journey through the elements of holistic sustainable performance highlights the interconnectedness of business and culture. To achieve sustainable success, organizations must not only bridge the gap between these two realms but integrate them, recognizing that strategies and culture are inseparable.

The impact of such transformation is felt across the employee and stakeholder experience, fostering a positive work environment, empowering employees for excellence and creativity, and promoting work-life balance and well-being.

Business and Culture: Holistic Meaning of Performance