Do you remember that (almost ancient) tune from Nik Kershaw: Wouldn’t it be good…”? Indeed… Wouldn’t it be good – when developing a strategy for the new normal – to know exactly which of its aspects will get the active support from the employees and which – of your mangers?

Where the grey zones are? Or where you can expect the strongest resistance, how strong it will be and what to do to cope with that? Or – when you have to change the organizational layout – to have a detailed canvas of possible and tangible risks mitigated with relevant levers to accelerate the integration. Wouldn’t it be good to have a reliable, tangible organizational map allowing you to see how different parts of the organization need to be refurbished in order to be better prepared for rapid and acute changes in the business environment similar (hopefully milder) to the ones we have been experiencing for the latest months?

Yes, it WOULD be good! Because behind each of those situations there is a concrete time, cost, expenditure, investment or a potential financial gain. And all of them are related to just one term: CULTURE. This is why Peter Drucker – quoted by everybody so often – said that culture eats strategy for breakfast. What he directly meant was that each organization does have a culture, but not every culture helps to implement and drive the company’s strategy.

A very good example here could be the Dubai-based Noor Bank led by John Iossifidis that at the end of 2017 designed and implemented a three-year change strategy putting the customers, the employees and technology at the forefront of all they were doing and embarked a path of focused, multi-level coordinated culture transformation project managed by the CEO and the Board members and run by a dedicated Culture Squad. As the result in 2018 Noor Bank reported the largest percentage increase in total assets (18,9%) and in net profits (62%) amongst all the banks in the GCC. On average the Region’s banking sector’s assets grew only by 5% and the second biggest increase of profits reached 33% in the same period. Same trends where kept also for 2019 leading to a successful acquisition by Dubai Islamic bank, making it the fourth largest bank by assets in the UAE after the acquisition. Looking closer at their road to the success may be a good investment of some of your time.

So, what’s the secret – what IS that culture that is so powerful? Apart from the fact that it is rather fuzzy and intangible? Well, there is a plethora of definitions. If you would be interested in linguistics then you can easily refer to this comprehensive oracle of wisdom: https://www.merriam-webster.com/dictionary/culture. But the question is: among all the approaches – are there any useful ones? For us, I mean, for business.

Being a business oriented, pragmatic and action-oriented individual, I opt for the definition of organizational culture formulated by prof. Geert Hofstede – based upon his comprehensive research from 1980’s and 1990’s, saying that this is the way members of an organization (or its part) relate to themselves, their work and the outside work, distinguishing from members of any other organizations. Why is it useful? Because it refers to organizational practices, which describe how the organization functions.

Having defined what culture is, perhaps it is worthwhile to also understand the four cornerstones of its dynamics?

Well, for the first – if you want it to be useful you need make it tangible and look at it from a meaningful perspective: you need to be able to measure it (to escape from literary, fuzzy descriptions that are not really actionable) and you need to have a proper scale or – if you like – a thermometer, allowing you to understand if 41OC fever is something desirable, neutral or perhaps deeply problematic. Some would say – compare your culture to icons (“let’s be a Google of the banking industry”) or other companies – selected benchmarks. Applying the logics here can help: how relevant Google is for your situation? What gets you to think that if another company succeeded in their line of business – you also will, following their path? Copying culture is unfortunately impossible. Because it is far too complex and there are far too many factors influencing its shape – history, structure, skills of the people, leadership practices, the systems and tools utilized, business environment and climate, investments etc. etc. Hoping to replicate all that is a waste of time. Not to mention unsuitability of the approach – unless you strive to be a copycat, that is. But even in such a situation – your circumstances would be different than the original company’s. And that would eventually affect the culture formulation process. The only meaningful comparison is the profile, optimal for your purposes: the one enabling you to reach your goals and deliver the promises you make to your shareholders, customers, employees and community. Translate your strategy into culture, using a robust data-driven methodology and voila! A huge data base of organizations measured is helpful as then you become aware what your optimal scores entail and what their consequences are. To learn more you are welcome to have a deeper look at Hofstede Insights web-site.

Another thing about culture worth cherishing is that there is no good or bad culture. It may be functional or dysfunctional, meaning it can help you implement your strategic objectives or hinder you from doing this. And then again – the key element here is to have a very clear and internalized image of the strategic intent, direction, priorities and initiatives. As they constitute the foundation for any work with culture.

Let’s face another fairytale: that you as a business leader can find competent experts to whom you will delegate the culture shaping “exercise”. As you normally wouldn’t delegate the overall responsibility for your balance sheet or P&L, you DO NOT delegate the responsibility for any other strategic asset of your organization, culture being one of them. Your strategy – its success and integrity – is determined by it – so would you really want to be dependent on others in such a critical area? This is the basic principle of successful delegation repeated at all leadership development programs, worldwide.

And one more thing: please bear in mind that culture is not the company’s values displayed on the walls and changing them (again) will not really bring about the expected change of culture. Unless the new values are operationalized, internalized and LIVED by the organization, translated into everyday activities and practices on the organizational, team and individual levels. And that is not a “culture exercise”. It is about simply changing the way we operate, do things over there. The less we talk about culture, the more we do and the more we put into our new business-as-usual, the faster the change will be and more sustainable.

Culture is a strategic asset of your organization that contributes to the achievement of your business objectives. Leveraging it properly can be a source of substantial, measurable gains especially in times when all the low-hanging fruit have already been exploited. And also – allowing to shift from firefighting to sustainable development. So, wouldn’t it be good to follow Noor Bank’s steps…? Not regarding the bank’s culture but their approach to transforming culture! There is substantial money waiting there…

SHARE:

Author

Piotr Gryko

Peter Gryko joined Hofstede Insights as a licensee in Poland already in 1995. Currently he is the Chairman of House of Skills, the biggest training and consultancy firm on the Polish market. Peter has a Master of Science in economy, graduated from the Foreign Trade Department of the Warsaw School of Economics.

Hope For The Best Be Prepared For The Worst: Culture’s Derailers