What do a giraffe, a koala and a penguin have in common with leading organisational cultures? They’re all masters of adaptability.
This is, of course, an oversimplification of two very complex ideas – evolution and culture. But whether it’s a giraffe with its anatomic adaption reaching for food, a koala eating the toxic leaves of the eucalypt, a flightless bird, the penguin, diving deep underwater for food, or a company finding new markets and new ways to connect with customers, adaptability is essential to surviving and thriving in a changing world.
Organisational culture faced one of its greatest challenges over the past year as the pandemic forced organisations into new ways of working in new market conditions. In the wake of this (mostly unplanned) change, leaders were prompted to reassess their organisation’s purpose and culture to realign business strategy to what matters most.
But organisations today don’t have the benefit of millions of years to slowly adapt, they need to be able to do it in real time. Here, we discuss three actions leaders can take to drive an adaptive organisational culture.
There’s no doubt that culture is top of mind for leaders. Our global study identified that ‘driving culture change’ ranks in the top three global leadership development priorities.
But most – 72 percent – of corporate leaders admit they’re struggling to get their culture right. They haven’t married together the company’s collective values, beliefs, and behaviours to support performance.
Research from Duke University also highlighted the importance of culture, particularly in merger situations. 54 percent of respondents stated they would walk away from a merger if the company cultures wouldn’t mesh, while 33 percent would discount the value of the same merger by 10 to 30 percent.
Action 1: Align purpose, culture and business strategy
Organisational purpose is like a compass, steering the business through the wild waters of an ever-changing world.
When culture and purpose are in sync, employees execute on the strategic goals of an organisation, not because they’ve been told to, but because they want to. They’re working with the internal systems and processes, not fighting against them.
And then when businesses align culture to strategy and engage and enable their people to deliver, we see the combined power of purpose, culture and strategy. Our research found that when these elements align, organisations see a 117 percent greater return on investment than those that don’t. And they get a 145 percent higher return on their assets and a 56 percent greater return on their equity.
The starting point is a clear understanding of the type of culture that will drive the organisation’s specific strategy, the current culture and how it supports or hinders strategy execution and most importantly, the levers that will have a powerful impact on culture transformation.
Action 2: Anticipating problems, then inclusively setting and communicating strategic priorities
An adaptive culture is powered by proactivity. Leaders must spend time anticipating problems and understanding the existing culture’s weak points or improvement areas to continually adapt and elevate the culture to meet new challenges.
The signs might be obvious, like how innovation and experimentation are treated – is failing quickly welcomed as a learning process, or marginalised for fear of reprisal? Or they may be more subtle, as when communications are protected, reducing the level of awareness of employees and thwarting collaboration.
These conversations can be uncomfortable at times, but they need to happen fearlessly. Waiting for risks allowing these problems to infiltrate the culture, meaning the work to undo their effects will be even more difficult.
Action 3: Build and develop capabilities quickly.
Strong organisational cultures typically have a clear focus on people – clients and teams – rather than products and tasks.
This means putting in place the right talent to drive the culture you want. It could involve assessments, upskilling, reskilling, developing existing talent or even recruiting new talent.
Nowhere is this more important than in leadership, which must be agile, inclusive and committed to driving culture change. Leaders can inspire people to participate in the cultural evolution by being a role model, by authentically listening, and by consistently sharing the stories to illustrate why people believe in them.
In this case study, the CEO of Danila Dilba Health Service, talks to Korn Ferry about transforming a culture to create an environment of engagement and performance.