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Corporate culture refers to the values and practices shared by an organization. These values and behaviors are supposed to penetrate corporate layers and direct the thoughts and actions of a group over the long term. The notions discussed in our article “5 management mistakes and how to fix them” are paramount: a company culture is real as far as it sis shared, implicit, pervasive and implicit.
Fair enough. However, some myths are so deeply embedded in the collective psyche that they become counterproductive, starting with the famous adage “culture eats strategy for breakfast”. Let’s debunk the myths.
Culture is the strongest driver of business performance:
This is not true. No, it does not eat strategy for breakfast. Nor does it shape it. Whether you are embarking on a long-distance trip or a Sail GP race, the culture of the crew does not guarantee you will reach your destination faster. If you don’t have the right strategy, the right roadmap, a competitive boat (structure and system), there’s little chance you’ll cross the finish line first… or ever cross the line.
This adage assumes that anyone can define a strategy while creating a culture would be more difficult. This is not true. Unless you confuse strategy and tactics or believe in management’s great incantatory slogans about culture, values, and people. Culture and strategy support one another.
No performance without a results-oriented culture:
Wrong. Cultures of order and authority, as opposed to a culture of results, are marked by processes and rigidity, risk aversion, and the preservation of status quo. So, no result? What about Huawei ?
What about cultures driven by innovation and learning like Tesla? It would be unfair to argue that results are not there. But it is no longer results at all costs that count. Results are rather the outcome of the right combination between vision, value and talent.
No performance without a strong culture:
There is no evidence of this. It is the ability to learn and anticipate changes that are correlated with business performance. We should not talk about weak cultures but cultures that acknowledge, like the Chinese saying that “being without ideas is the only way to remain open to every opportunity”. And adapt to changing situations.
On the contrary, performance fuels corporate culture. No performance – which once again depends much more than on culture – and the values, attitudes and usages that are supposed to form a corporate culture fall apart.
Cultural fit must prevail in acquisitions to avoid indigestion:
My foot! Those who have experienced acquisitions – on one side or the other of the fence – have all attended welcome seminars full of effusive and tearful statements about people centricity and culture… To discover a few months later the exit clauses of the freshly minted leaders and the exodus of talents to new horizons.
Drat! Could it be results do not depend on the addition of new resources, skills, and attitudes? Let’s be serious: if the culture of new entrants is in line with strategy, that can’t hurt. However, if the acquisition primarily aims at bridging a technological gap, settling in a new region for the greater good of customers of stock price, it does create value. And sorry if 1+1 does not equal 2 … or 11.
Real culture is everywhere:
In other words, without permeating all layers of the organization, it is unlikely to be shared and enduring. So, no or minor impact. Flase. Wait a sec ? Am I questioning one of the sacred traits of culture mentioned in the introduction? Yes and no. No culture is so pervasive enough to include every corporate entity, let alone every geography.
First, because regional cultures are not that permeable and flexible. Second, because the company is a living body consisting of micro-cultures that are specific to teams and departments. There may be common denominators: adaptability, acceptance of change and risk-taking, for example. Or strong values. But values and culture must not be confused. That is precisely what spawns globalism and identitarianism. Ouch !
“Cultural fit” is the ultimate screening and hiring criterion:
Since the most accepted theory – false – combines the power of culture with performance. Let’s go for it! Newcomers need to fit the mold and assimilate quickly. And juniors must walk in the footsteps of their elders.
Looking for startling numbers ? 65% of tech companies we interviewed rejected a candidate because of “cultural fit”… which turns out to be a “personal fit”. Half of the respondents do not know how to define their corporate culture or confess they have not validated a fundamental skill of new hires: adaptability. That bad mix of “cultural cloning,” biases and ignorance misses the potential impact of candidates with different backgrounds, experiences, and mindsets.
Culture is a hot topic and a powerful competitive advantage. Yet, it certainly does not eat strategy for breakfast and is not enough to predict the performance of a company. Culture, vision, values, objectives, strategies complement each other. It is the combination of these components that generates performance.
Nor is culture decreed by a charismatic leader. It is created, diagnosed, and adjusted in the light of the factors that sustain it, the strongest levers being by far talents and purpose. They are the ones that shape beliefs and behaviors and create a sense of belonging.
Demystifying corporate culture in one article is a challenge. Nevertheless, we have tried to put it back in its place. Its intrinsic characteristics – shared, pervasive, durable, implicit – remain valid. Provided that culture is understood as a system of actions and values that places the interests of the company’s stakeholders (consumers, employees, shareholders) and flexibility at the center of strategy, structure and systems.
Caught in the pseudo culture trap?
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