Why culture is the mediator for all things business

Image: Shutterstock

A paradigm shift occurs when our understanding of a phenomenon changes radically, often by altering some fundamental assumption. This shift can lead to significant advancements in the field, as seen when Copernicus proposed that the Earth revolves around the sun.

A similar shift is unfolding in business, though it is often poorly accepted. (It took centuries to accept Copernicus's heliocentric model fully.) Today, leadership conversations in a typical business focus on strategy, execution, customers, or personnel. While these aspects are important, the conversations miss key questions: What should the CEO focus on to have the greatest impact? What is the causal chain? Where does it all begin?

The New Model

In this article, I present a holistic business model in which culture plays a central role in driving growth and success. This model transcends the superficial discussions on culture often heard in leadership meetings and goes beyond token gestures like employee satisfaction surveys and recognitions. Instead, they should embrace culture as the very core of their business, not a peripheral concern relegated to HR.

A great culture doesn't necessarily mean keeping employees comfortable and happy. Not all successful cultures include comfortable employees, but they do include proud participants. A truly successful culture unites the firm's goals, resources, and strategies into a comprehensive and formidable system. As such, culture is a unified set of beliefs and behaviours that harmoniously drive toward business objectives.

Great teams use whatever tool they have in their arsenal to create outstanding outcomes.

Also Read: How to manage critical conversations

Today's most successful companies proudly exhibit distinctive cultures. Consider Amazon, Google, Bumble, Godrej, Southwest, Netflix, Infosys, and Mu Sigma — each has a unique and strong cultural identity. Culture transforms work groups into teams and goals into results. A study by James L. Heskett and John P. Kotter found that companies with strong corporate cultures that aligned with their business objectives achieved revenue growth of 682 percent, employment growth of 282 percent, stock price growth of 901 percent, and net income growth of 756 percent over eleven years.

My proposed holistic business model, called C-PLOS (Comprehensive Professional Leadership Operating System), is a conceptual path analysis of how things happen in business. For example, it includes over 50 strategic moves a leader can deploy to control business outcomes better. However, any detailed discussions are beyond this article's scope. The key point, nevertheless, is that it is important to recognise that strategy, staffing, execution, systems, and innovation can all fail within a poor culture.

Conversely, a great culture systematically resolves issues and drives growth. Strategy, systems, and processes can be documented and copied, but it takes the right culture to make them work together effectively. So, does culture shape strategy? Absolutely. Without a supportive culture, neither can survive. Innovative cultures foster innovative strategies, and disciplined execution cultures drive results.

On the other hand, a strong culture will not allow misfits to be hired or survive. For instance, Compaq tried to copy Dell's "Just In Time" model but failed because their cultures differed. Similarly, Nokia, Blockbuster, Kodak, and Yahoo failed due to cultural misalignments with their aspirations. On the other hand, companies like Ola, Flipkart, and Tata's JLR acquisition flourished by adapting their cultures while copying strategies from others.

Also Read: How to combat an "always on" work culture

Reciprocally, all elements fuel culture. Better strategies lead to better hires, which enhance culture. Great execution brings better results, attracts better people, and further strengthens the culture. It's a circular, self-fueling process. A business enterprise is a complex system where any change impacts everything, and each one is important.

So what seeds and nurtures culture?

Promoting Moonshots

You do! You seed culture and nurture it, above all else. You push for co-creating the symbols, language, and rituals as a team because it is your moonshot. The team must resonate with your frequency. So, you get the team to craft the vision of the future state and strategise the path to it from the current state. You articulate the values and beliefs and shout them out loud. You set the bar and uphold the standards. And finally, you are the guardian of the culture at your firm. Without you shepherding the culture, it will fall into disarray. Get all the help you need, but culture must be your primary focus. If you keep your eyes constantly focused on the health of your culture, the rest will be easier to achieve.

Avoiding Leadership Blindspots

Ultimately, achieving outcomes hinges on the participation of our people. As the CEO, your role is to lead the team towards these desired results. The collective can avoid the blindspots of the individual. Think of it as leading a jazz band rather than an orchestra. Jazz bands are not controlled productions, unlike orchestras. In today's dynamic environment, leadership is about fostering an atmosphere where talent thrives through improvisation. You're no longer the conductor dictating every move; instead, you create a space where the best outcomes emerge through collaborative creativity. This is why culture needs to be of paramount importance.

In conclusion, consider the VUCA concept from the US Army War College, which transformed the US Marine Corps from a traditional force to strategic warriors under Gen. Krulak's leadership following challenges in Somalia. This transformation emphasised decentralised decision-making and focused on transforming the culture. Zappos adopted a similar idea in developing the concept of Holacracy, which stands as one of the finest examples of culture-centred leadership.

The author is an Executive Search, Culture, & Strategy Advisor, Speaker, & CEO Coach.

The thoughts and opinions shared here are of the author.