Peter Drucker said that “Culture eats strategy for breakfast”, but really they should be on the same plate. A company’s strategy won’t come to life without culture. Even though the importance of organisational culture is widely recognized by management and boards, it is still challenging to translate this understanding into focused hands-on action across the whole organisation.
This is a very familiar issue. As organizations, we go through the same routine every time the earth moves beneath our feet.
In the early 2000s, I worked at a company that made mobile phones. It was at this time that I fell in love with usability - it brought together people and technology. The goal was to ensure ease-of-use and create a pleasurable look-and-feel that combined cool industrial design, ergonomics and features that were intuitive to use. Making the design process more human-centric was rewarding.
I felt it was a vitally important role, but not everyone agreed.
Some people felt a separate usability expert wasn’t needed. After all, the company had created successful products without them. People would half-jokingly ask: “Why do you need ergonomics & usability if the device fits in to the hand of the product manager?”. It represented the attitudes and maturity of user centric design of that era. Eventually, as the competition became a much stiffer, development teams included usability specialists, and later the role evolved into user experience experts. Eventually it was understood that great user experience doesn’t just appear - it requires a systematic, user-centric approach.
The world has evolved.
Design thinking has evolved to service design, a practical application of design thinking in the development of services. Service design is a hot topic and people in related positions can be found in a wide variety of organizations. This is super cool compared to where I started.
But the world is not still not ready and is still evolving.
My role has evolved, too. The goal is still to create human-centric products and services, but we’re now working much closer to the heart of the matter. I now work with our clients to help organizations become future-capable, innovative and able to find success in a rapidly changing world.
Culture is my tool.
To thrive, companies need a new culture that empowers people to collaborate and move away from silos, experiment, take responsibility for results and co-create with customers. Culture is the key to transformation.
It’s like the early-2000s all over again
Now, when I discuss their needs with clients and bring up culture, I see the same kind of hesitation and doubt that I saw when I talked about the importance in investing in usability as an integral part of the product design process almost 20 years ago.
Executives agree that organisational culture has an impact on productivity, creativity, profitability, company valuation and growth rates. A positive culture is a vital aspect of running a successful, high value creation business, but there seems to exist a considerable gap between what management says and what is actually practised in daily work. Why is investing in culture a challenging idea even though it’s known that culture underpins everything an organisation does?
One reason may be the idea that measuring the return-on-investment in culture is hard. It’s not. There’s a clear link between an organization’s strategic imperatives and the way people need to behave and operate to deliver on them. Customer-centricity and loyalty increase when your people are willing to listen to your clients needs. This results in reduced costs and less churn. A great reputation brings savings in recruitment costs and better quality candidates, who then do better work and increase customer engagement. Engaged employees are more productive and with better retention rates your recruitment costs are reduced even further.
It’s a virtuous circle.
You can also approach ROI by thinking how much would it cost not to invest in your organisation’s culture. Many studies show concrete link between investment in innovation culture and profitability and growth. There are stories about poorly managed cultures, too, and the results were proportional to this.
But what do I get?
The benefits of investing in company culture include:
- Solid and empowering culture is the key enabler of strategy.
- A culture of innovation makes a company more efficient and productive, saves time and resources and attracts the best talent, i.e. makes it more competitive in the market.
- A team working towards tangible and shared goal creates motivational and meaningful work for everybody
- Building courage and empowering people to own their work is how you go from endless discussions to a real “get shit done” approach
- Improved communication creates transparency, trust and commitment across the whole organisation
- Transparency and trust help organizations embrace diversity, which is increasingly a key competitive advantage in both service development and recruitment.
- Long-term customer co-creation, innovating with customers and becoming the partner of choice.
- A more resilient organization that is more customer-centric, innovative even in adverse times.
- Continuous innovation cycle, build-measure-learn as a mantra. Innovation is not magic - it can be anything from fine-tuning services and meeting ever-changing customer needs to making processes more efficient.
If culture at first glance seems infuriatingly intangible, maybe the above pointers will help you see it as something more concrete and find impactful ways to invest in it.
The status of the company culture might be seen differently by directors and teams. Top management’s vision of what everyday work is like artoss the organization might be slightly divorced from the reality. Involving the whole organization - from boards to middle management and all the way to teams - in the transformation is essential. Everyone must be committed and engaged.
Without an investment in organizational culture, a company will not be able to manage the disruptive forces in its industry for very long. Disruptive forces are present in every industry now. A culture must be transformed to become truly innovative and able to meet ever-changing customer needs.
Culture is the key to the future.