Culture: The Symbiotic Link between Purpose and Strategy
In the ever-evolving landscape of business, the notions of strategy and purpose have long taken center stage as crucial drivers of success.
While their significance cannot be denied, there is an often overlooked aspect that holds the power of both together, and can shape the destiny of organizations: Culture.
Culture encompasses the very essence of how an organization operates. It acts as the bridge between purpose and strategy, translating the organization's purpose into everyday behaviors and norms.
Surprisingly, despite its profound influence, culture tends to receive far less attention than its strategic and purposeful counterparts.
Shedding light on the three-some force of Culture, Strategy and Purpose
It is time to shed light on this hidden triangular and symbiotic combination of the three forces and recognize its pivotal role in unlocking the full potential of businesses.
With nearly two decades of experience in organizational transformation work, I have strongly experienced the interconnectedness (and the lack of it) between a company's purpose, strategy, and culture.
While strategy has long been regarded as the primary driver of business success and purpose has gained significant importance in recent years, the critical role of culture often goes overlooked.
In my view, purpose, strategy, and culture need to form a strong and interdependent relationship, where each element influences and shapes the other two.
If any one of them changes, the others must adapt and evolve to maintain equilibrium; otherwise, this triangle becomes fragile and collapses.
Culture, with its governing beliefs, principles, and behaviors within an organization, plays a significant role in bringing purpose and strategy to life. I firmly believe that leaders possess the power to shape their company's culture more rapidly and profoundly than commonly perceived.
How Leading Companies Achieve Culture-Purpose-Strategy Symbiosis
Watching successful companies like Microsoft, Netflix, and Adobe, among others, we find that culture has served as the fertile soil that nurtures both purpose and strategy, propelling them toward exceptional performance on a large scale.
When purpose, strategy, and culture are closely interconnected and aligned, they reinforce one another. Why is this synergy crucial?
It's because employees must be willing and capable of channeling their individual and collective human genius to support the company's purpose and strategy, which can only be achieved within a culture that harmonizes with both.
Microsoft
Take the case of Microsoft’s CEO Satya Nadella. When he assumed leadership in 2014, the company was grappling with a reputation for its aggressive and combative culture, resulting in missed opportunities in technological innovation.
However, through a remarkable resurgence, Microsoft managed to transform its trajectory. While updating the company's purpose to empower every individual and organization on the planet was undoubtedly significant, the pivotal factor in this incredible turnaround was the reinvention of the company's culture to align with that purpose.
This transformation involved addressing unmet and unarticulated needs, shifting from a dominant "know-it-all" culture rooted in world domination and zero-sum-game thinking,
to cultivating empathy and a growth mindset, essential for fostering an open culture.
Conversely, toxic cultures have proven detrimental to the downfall of companies and their leaders. Enron's web of fraud and financial misconduct, which led to its collapse in 2001, was a direct result of the poisonous culture driven by hubris.
Similarly, Uber's co-founder and CEO Travis Kalanick was compelled to step down in 2017 due to revelations of a workplace culture rife with bullying, sexual harassment, and discrimination, perpetuating what was famously referred to as a "bro culture."
Adobe Systems
Adobe Systems Incorporated is a multinational software company renowned for its creative solutions. In the early 2010s, Adobe faced significant challenges as it sought to transition from a traditional boxed software model to a subscription-based cloud service offering.
This strategic shift required a fundamental transformation of the company's culture to support this new direction and ensure its long-term success.
Under the leadership of CEO Shantanu Narayen, Adobe recognized the need for a culture that fostered innovation, collaboration, and customer-centricity.
The company aimed to empower creative professionals and businesses to create exceptional digital experiences through its software solutions.
To achieve this, Adobe embarked on a comprehensive cultural transformation journey. One key aspect of this transformation was redefining the company's purpose.
Adobe shifted its focus from simply providing software tools to enabling creativity and empowering individuals and organizations to bring their ideas to life.
This purpose became the guiding force behind all aspects of the company's operations and served as a rallying point for employees.
To align the culture with this purpose, Adobe introduced initiatives aimed at fostering creativity, collaboration, and a growth mindset.
They implemented a flatter organizational structure that encouraged cross-functional collaboration and eliminated bureaucratic barriers.
The company also invested in employee development programs and initiatives to nurture a culture of continuous learning and skill development.
Furthermore, Adobe recognized the importance of a diverse and inclusive workforce in driving innovation and creativity.
They implemented initiatives to promote diversity and equality, including programs to increase representation of underrepresented groups and initiatives to ensure an inclusive work environment where all employees felt valued and respected.
Learnings from the Culture, Strategy, Purpose Symbiosis
In my perspective, purpose, strategy, and culture can be understood as symbiotic forces, with each element interconnecting and shaping the others. The area of focus depends on the circumstances at hand.
As I've learned from experience in many different companies, striving for excellence in all aspects at all times mostly leads to “average”.
When companies live through a critical period of disruption, market decline, or restructuring measures, their primary focus needs to be on swift action, operational improvements, and fostering a spirit of unity and determination to save the company.
There is no time for extensive deliberation on a meticulously crafted company purpose or a long-term strategy. Instead, they need to prioritize direct operational enhancements, which reignited a customer-centric culture among employees.
Only once they stabilize the business can they shift their attention again to growth, defining their purpose, and subsequently realigning their strategy accordingly.
This transition then should prompt the company to reshape its culture in order to bring its purpose to life.
To effectively shape a company's culture, I’ve seen times and again that the most successful companies do articulate a concise, compelling, and aspirational purpose that encapsulates the culture around a singular, yet powerful idea.
This formulation serves as a guiding force and facilitates the dissemination of the desired culture throughout the organization. Simplicity and emotional resonance are key, as they ignite energy, focus, and action.
As part of our transformation work, I embark with leadership teams on a collective introspection to identify our best and purposeful selves as a collective entity. We ask questions such as, "If your company was a person, and you were that person, what would be your dream for your personal future, how would you behave?"
The organic response emerges almost always as something like “I want to be more sustainable and responsible with my environment”, “I want to create something bigger than myself that will serve our children”, “I want to connect people”.
These concepts harmoniously align with company purposes of enriching lives through technology, connecting the world, or simplifying lives. Great purposes encompass how leaders and employees want to interact within their company and with all stakeholders.
An inspiring purpose embodies the qualities we admire and aspire to in a human connection—an understanding, caring, and supportive presence that consistently strives to help.
Such a simple yet powerful idea can revolutionize the way every employee engages with one another, customers, suppliers, shareholders, and local communities. It can guide decisions, actions, and the transformation of a business, management systems, and operating environment.
In essence, it crystallizes a company’s culture for every employee, making it easier for its purpose and strategy to manifest in reality.
Leaders are role models
As John C. Maxwell said “The single biggest way to impact an organization is to focus on behavior change. The way you change the culture is by changing the behavior of the leaders."
This notion underscores the significance of leaders as role models in shaping culture. Role modeling begins at the top, with leaders signaling change through their own behavior and actions.
Many CEOs I work with spend regular time in their stores or on their shop floors dressed down to fit their sales associates or workers.
Immersing themselves in the frontline experiences, they observe, ask questions, and listen to gain valuable insights. By doing so, they not only set a cultural tone but also discover invaluable learnings that inform their strategies to turn the business around.
This may include price matchings with competitors, enhancing the customer experience, and reconfiguring factory or store layouts to accommodate rapidly growing product categories.
Authentic role modeling necessitates connecting personal values with the company's purpose and culture being shaped. Leaders should not shy away from this connection.
Leadership is not about being the most knowledgeable individual in the room; it's about creating an environment that enables the purpose and strategy to thrive.
Business, Management and Human Levers of culture transformation
While role modeling is an essential aspect of culture transformation, it is not the sole driver. There are three important levers that profoundly shape an effective culture: business levers, management levers, and human levers.
Business levers
Business levers involve improving operational aspects that, in turn, influence strategic choices. For example, addressing customer pain points can emphasize the importance of outside-in thinking and bottom-up action.
By prioritizing customer satisfaction, companies can communicate that its future hinges on understanding and improving their customer’s lives.
Additionally, successful partnerships with renowned suppliers and strategic acquisitions can shift employees' perception of the company, expanding the focus beyond a zero-sum-game mentality.
Management levers
Management levers directly impact culture through key processes and decisions.
The management levers encompass crucial elements such as the selection of individuals for positions of power, the recruitment process, the emphasis on performance versus unethical behavior, decision-making protocols, measurement and recognition of success, and the overall structure and rules governing the organization.
These factors significantly shape the culture.
Netflix example
Netflix provides an excellent example of how management levers can mold culture. The company's approach to travel, entertainment, and expenses is guided by a single policy: "Act in Netflix's best interest." This minimalist approach reflects a culture of trust and autonomy that empowers employees.
Similarly, Netflix's lack of strict regulations on office hours and vacation days reinforces the culture of "freedom with responsibility." These practices align with the company's overarching goal of fostering creativity and entertainment for the world.
Additionally, Netflix's recruitment strategy focuses on attracting exceptional individuals, while constructive feedback and contextual information sharing contribute to decentralized decision-making and constant improvement.
Human levers
Alongside business and management levers, for me, the power of human levers stands out. They create an environment that inspires employees to fully invest their energy and talents in serving the company's purpose.
Key ingredients for the human levers are meaning, human connections, autonomy, psychological safety, mastery, and a growth mindset.
How can organizations enable employees to connect their personal motivations with their work? How can genuine human connections be fostered within the workplace?
How can autonomy be granted to empower individuals to perform at their best? How can psychological safety be cultivated to encourage open expression of thoughts and emotions?
How can opportunities for growth and mastery be provided? These are the questions that need to be addressed to leverage the human magic levers.
Articulating a powerful purpose
By articulating the company's culture around a concise yet powerful idea, one can effectively utilize all three levers.
A powerful purpose can serve as the cornerstone for leadership’s decision-making, actions and behaviors. It guides them e.g. to eliminate scripted interactions with customers, instead encourages employees to listen attentively and empathetically.
This shift can contribute to building a human-centric culture that supports the company’s purpose and strategy.
Conclusion
In conclusion, the numerous cultural transformation journeys have taught me the importance of purpose, strategy, and culture as interconnected elements for organizational success.
While strategy remains critical, purpose and culture should not be neglected. Crafting an effective culture requires the alignment of purpose, strategy, and culture in a manner that reinforces their symbiotic relationship.
Leaders play a pivotal role in shaping culture through their behavior and actions, and the three types of levers—business, management, and human magic—offer powerful tools for cultural transformation.
By leveraging these levers in unison, organizations can create an environment where employees are driven to excel, adapt to unforeseen challenges, and fulfill the company's purpose in an ever-changing world.