So, is it strategy or culture that impacts performance most?
Despite many executives believing that a sound strategy is what drives an organisation’s success, Peter Drucker believes that “Culture eats strategy for breakfast”.
Although strategy is required to provide a formal logic, focus, and clarity for the company’s goals, actions and decision making, it is the unspoken behaviours, values, mindsets, and beliefs of individuals that enables a strategy to be executed. It is the culture.
Poor work cultures generally result in underperforming organisations. They often lead to low employee morale and motivation, high employee turnover, poor communication, a lack of teamwork and collaboration, and a negative impact on an organisation's reputation.
According to a survey by FlexJobs, in the six months leading up to March 2022, “25% of employees quit their roles due to a toxic workplace culture”. These results suggest that cultures matter.
Many leaders are perplexed by what makes a good organisational culture. Some believe it can simply be built on material benefits like free coffee or food, employee discounts, or four-day work weeks. But it is most often built on the shared behaviours, ethics, values, and attitudes that are woven into the fabric of an organisation.
Changing a poor organisational culture or establishing a unified, productive, and high-performing culture is no simple task. Organisation’s often talk about building and maintaining a strong company culture but strong infers rigidity. To be truly successful and able to overcome operational challenges and market fluctuations, every organisation requires a culture that is flexible, agile, and able to adapt with the times.
Adaptable cultures provide space for employees to make decisions on their own, and being flexible offers a better chance to stay alive when an unwelcomed change is required. Creating this mentality requires leaders to promote adaptability, flexibility, and agility as part of the organisation’s culture.
It is the leaders within an organisation that shape the culture, through both conscious and unconscious actions. It’s the leaders who can create the supportive environments where employees are treated well, are involved in the decision making, are empowered to manage their own work, and where the communication is open and transparent that ultimately drives positive organisational outcomes.
One of the few sustainable competitive advantages an organisation has today is to lead with culture. Developing and embedding the foundations of successful cultures can not only stave off high turnover rates and enable organisations to deal effectively with any challenges, but it can also boost productivity, promote work-life balance, and make individuals feel like they belong to a community that fosters innovation, ideation, and growth.