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Culture (still) eats Strategy for Breakfast

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Culture (still) eats Strategy for Breakfast

As the mercury hit 30 degrees in Cambridge—the one nestling in the Fens, not in Massachusetts—it was a relief to...

5 Minutes Read

As the mercury hit 30 degrees in Cambridge—the one nestling in the Fens, not in Massachusetts—it was a relief to enter the cool of a Cambridge college courtesy of HfS. What made me want to attend their FORA summit was a fascinating panel dealing with culture: why it matters and how to begin shaping it. The panel kicked off with some insightful data showing why it matters. The gist of it was this: companies that actively focus on culture generate a revenue dividend and go on to build out their digital transformation journey from a position of strength. I couldn’t agree more. Neglect culture at your peril.

You can check out the Cognizant/HFS study Make Digital Your Core Strength and see the data and bigger story for yourself. One data point was particularly insightful. Just over half of the highest performing enterprises (51%) worry that culture holds back their digital journey. They (rightly) worry about culture, and they make sure it's centre stage so people are ready for the rigors of modern work. Laggards in the HfS study, on the other hand, are missing the warning signs – only 36% of the lowest performing enterprises identify culture as a problem to their progress. Like I say, neglect culture at your peril because it matters from a revenue standpoint and it matters as a marker for how people perceive an employer and their place of work. It matters because business is a living entity, and if it looks stale or sluggish, then people won't want to work for it or do business with it, and they certainly won’t want to stick around.

This HfS data shows that culture matters and good leaders will know when it’s right (I’ve put together a simple test 10 ways to understand if your culture is working which might give some pause for thought). The problem is that the millions of pounds invested in a company’s digital transformation journey is money wasted if the workforce isn’t onside. “Culture eats strategy for breakfast” was Drucker’s neat quip and it captures things perfectly because disconnecting the two puts any future success at risk. And the panel revealed that there is some BIG money being spent on digital, and I mean big. Alas, the panel was under Chatham house rules, but the figure quoted by one panelist was getting north of £2 Billion over the next three years! So crossing your fingers and hoping people adapt to the radical shifts in how work gets done isn’t enough. Another aside from the panel show that this message is getting through at the top. One senior decision maker hailing from a UK high street bank struck a chord by stating that “performance management is dead.”

Performance management will not build a strong culture in the digital era. And yet performance management is the sacred cow of people management and has been for decades. The time has come to cart it off to the knacker’s yard. Setting performance around individual contribution rather than team contribution is nuts in this digital era of interconnected experiences, technologies and value chains. Digital and intelligent products and services are no longer standalone entities, but interactive components within an extended ecosystem made up of people. This fact fundamentally changes intra-and inter-organizational work structures. We need much more rapid teaming, cross-company collaboration and intercompany collaboration, not individual contribution, so why hang so much store in individual contribution?

Many leaders will find their culture at odds with the rapid emergence of technology and the sheer variety of work styles that now proliferate across the workforce. It’s critical for leaders to tune the work culture to nurture, anticipate and propel people, and the business, forward. The panel all understood this. They all explained that thriving in an era full of promise and uncertainty demands a velocity of innovation, experimentation, and collaboration inside and outside the organization. The problem is that work cultures that have grown up over decades can be complex, slow-moving and complacent (sometimes even paranoid). Stodgy innovation cycles and people unwilling to embrace the machines moving into work are a recipe for failure. Failing to energize people for work in the digital age risks the very survival of an organization. Culture eats strategy for breakfast.

PS Congrats to HfS for an excellent event. Looking forward to the next one.

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