Why is Developing Organizational Culture a Vital Part of Leadership Strategy?

For organizations that have been lasting more than 20 years, culture is a DNA that an outsider just has to adjust to. However, for growing organizations, the early days will be a roller coaster ride. A limited number of committed and engaged employees would only be focused on a ground-breaking idea to keep the adrenaline flowing and for solving their day-to-day problems as they arise while growing the business.

Growing organizations tend to back out from investing in dedicated human resources practice as long as possible, handling all kinds of human resource programs, processes, and policies on an ad-hoc basis. Similarly, training of all kinds tends to take a back seat with early employees often overseeing quickly growing teams without having ever managed anyone before. The longer the organization delays building a dedicated human resources centre to manage the central piece, 'Talent,' the greater the chance that the company will experience employee retention issues.

One-way leaders in growing companies reward loyalty and commitment is by retaining and promoting employees who dedicated themselves to the company early. There is certainly value to the institutional knowledge and continuity these old-timers bring in, but as a growing organization matures, it needs to change the philosophy by which culture needs to be crafted, nurtured, and sustained through HR interventions. It's unlikely that the team a founder starts with will have the exact skills and expertise as the team that runs the organization when it has tripled or quadrupled in size. At each stage of your organization's growth, it becomes imperative for the leaders or founders to pause and ask,

1. Are we architected by the right structure?
2. What is the culture (glue)we are trying to build and sustain?
3. Do we have the right talent to give us a competitive advantage in the future?

Culture is and has always been a group phenomenon [shared mindset]. It cannot exist solely within a single person, nor is it simply the average of individual characteristics or individual mindset. It resides in shared behaviors, values, and assumptions and is most commonly experienced through the norms and expectations of a group-that is, the unwritten rules.

The point to ponder is, what made some organizations sustain during this major unprecedented COVID-19 pandemic? What did the pandemic teach the world or the leaders? It taught the so-called profound leaders and think tanks that to be great in this period of uncertainty requires new frames of thought or mind. This called for a new mindset to self-reflect and architect the organization with a new set of practices that not only made it survive but to ensure it is seen as GREAT!

Greatness has never been and will never be a choice, it's a conscious call that leaders take during adversity. Strategy offers a logical or rational framework to define a company's future and sets the momentum for its people to march towards the momentum set. Culture, on the other hand, glue's purpose set in form of strategy, through shared values and beliefs of the people. It also guides activity through shared assumptions and group norms. The strategy provides a focus for collective action and decision-making. It relies on choices made out of options, sets the path to mobilize people's talents and competencies. Leadership goes hand-in-hand with strategy crafting and execution, and most leaders get this formula right. Culture, however, is a more mysterious bullet, because much of it is exhibited in form of unspoken behaviors, norms, mindsets, and social patterns that are always vague and tacit.

In most cases, culture and leadership are inseparably linked so that no one raises any questions. Founders and leaders of start-ups often craft and set new cultures in motion and imprint values that persist for decades, which then drives organizations forever. Over time an organization's leaders can also shape culture, through both conscious and unconscious actions (sometimes with unintended consequences). The best leaders we have observed are fully aware of the multiple cultures within which they are embedded, can sense when change is required, and deftly influence the process. Sadly, what we have experienced is, it is far more common for leaders seeking to build high-performance fuelled organizations to be puzzled by culture DNA. Indeed, many either let it go untouched or delegate it to the HR Leaders driving the function, where it becomes a secondary option.

For leaders, the 'strategy and execution code' becomes the primary motive or driving force than dwelling their thoughts to debug and drive 'culture code' as part of the strategy story. The 'culture' is the tacit social order of an organization; it shapes attitudes and behaviors in wide-ranging and durable ways and sustains the organization. Cultural norms set and define what needs to be encouraged, discouraged, accepted, or rejected within a group/team and the entire organization. When rightly crafted and aligned with powered values, drives, and needs, culture can unleash incredible amounts of energy in a great organization. A right culture can also generate flexible muscles in an organization, which then can help the organization to tap changing opportunities and demands. Culture helps in blending the intentions of top leaders with the knowledge and experiences of frontline employees, which when rightly integrated with 'strategy,' become the competitive weapon to fight and gain competitive advantage anywhere and everywhere.

At most growing organizations, the culture initially flows from the founders and earliest employees. When new employees are brought in, they tend to mesh well with the founders both for skills and personalities because they are being hired directly by those same company leaders. However, as companies grow and more people join while early employees leave, maintaining a coherent culture requires a deep investment in terms of time, effort, and energy.

Leaders have to acknowledge that culture is vital and then always reflect and answer one question always, 'How can we try to sustain and grow those vital elements that make us stand out as an organization that people are inspired, motivated, and excited to work for?' Being thoughtful about culture is not the same as maintaining the early culture at any cost. With more people and more hierarchy, more structure is required. This naturally changes the culture, which may be met with resistance by employees, particularly those who are used to the more free-spirited early days. That is why leaders of growing organizations need to make any changes transparent to all employees always.

Biography of the Author

An HR Professional with experience of more than twelve years, Aravind Warrier has worked in multiple sectors like Information Technology, Manufacturing, and Pharmaceuticals in leading MNCs. Having worked very closely with business leaders in managing mission-critical projects and assignments, he has been pivotal in providing a strategic perspective to the organization. Apart from being passionate about keeping up his learning curve while developing and coaching team and extended team, he is a motivational speaker and also serves as an advisory member for many leading business schools across India.