The term “strategy” is one of those buzzwords that excites organizational leadership. It’s a word that lights up board room presentations and dazzles investors. However, when a company’s culture is not aligned with a company’s strategy, leaders will almost always fail to deliver on their strategic objectives.
To be most successful in ERP implementations and/or business transformations, leaders must understand how to change their organizational culture to align with their company’s strategy and related digital strategy.
ERP Boot Camp
Join us April 22-23 in Denver, CO to learn how to optimize your supply chain and transform your organization.
Implications of a Misaligned Culture
When a company’s culture is not aligned with its strategy, the company is susceptible to the following:
1. Poor Hiring Decisions
Each employee is a critical member of the organization. This is especially true when employees are asked to participate in strategic initiatives in addition to their day jobs.
Unfortunately, when the organizational culture is not clear to the hiring manager, or it is misaligned with the company strategy, the wrong types of employees are hired.
Our clients that have made poor hiring decisions, often experience challenges when building an ERP project team or business transformation project team. This often creates an imbalance of external resources versus internal resources.
2. Lack of Performance Management
Performance management is about coaching employees towards excellence. For example, progressive discipline policies enable managers to give feedback and warnings to employees.
However, when an organizational culture is misaligned with the company’s strategy, project team members may ignore feedback from managers and continue working toward disparate goals.
3. Employees do not Understand the Value They Bring to the Company
A properly aligned organizational culture recognizes employees who contribute to the achievement of strategic objectives.
However, when a company’s culture is not aligned with its strategy, employees are not recognized properly, or in some cases, not recognized at all. This leaves employees marching to the beat of their own drum, pursuing objectives that may not be aligned with those of the project.
Ultimately, this type of environment leaves the company at risk of paying employees for work that doesn’t directly contribute to strategic goals.
Leadership’s Role in Organizational Alignment
The ideal organizational culture should encourage openness to change, foster trust in leadership and enable teamwork. Ultimately, it is the leaders of the company who must set an example of these values for employees.
In fact, each level of leadership plays a different role in the alignment of culture and strategy:
The executive-level leadership team bears the burden of establishing company culture. These leaders define the company mission, vision and values and communicate them to employees.
Middle and Senior Managers
Next in the line of leadership are middle and senior-level managers. These managers enable their departments to meet strategic objectives, and they also help determine key performance indicators. This role is helpful when it comes to being a sounding board for the executive team and communicating company goals to the front-line managers.
The last in the line of leadership to have a measurable impact on organizational alignment is front-line managers. These managers monitor the overall performance of their departments and ensure employees are achieving their assigned metrics. As this leadership group is most removed from the executive team (and sometimes, geographically, even further removed) this is where the greatest communication challenge lies.
How to Align Organizational Culture with Strategy
In order for a company to change its culture, communication must be structured as a continuous feedback loop throughout all levels of leadership. This means that from the executive level through front-line managers, everyone is fully aware of organizational goals and project goals.
Following are three steps for using communication to drive cultural change:
1. Define Objectives
To start this continuous feedback loop, the executive team must ensure the company mission, vision and values of are clearly defined. These items should be reviewed at no less than an annual basis and reworked if the strategic direction changes.
2. Communicate with Middle and Senior Managers
Once the mission, vision and values are defined, they must be directly communicated to mid-level and senior-level managers. This communication should happen not just through flyers and email but in person.
This allows for a dialogue to occur in which critical questions can be asked. More specifically, this discussion allows executives to receive feedback from mid-level and senior-level managers regarding any cultural blockers to the achievement of project goals.
Here are some examples of culture- and strategy-related questions that executives and mid/senior-level managers might discuss:
- Which internal processes need improvement in order to achieve strategic objectives and maintain our competitive advantage?
- What are our customer expectations and are we successfully meeting them with our products or services?
- Are our employees trained in the skills required to meet our objectives?
- Do employees generally trust the management team?
- Are we able to measure, in real-time, the performance of our company at a financial level?
3. Communicate with Front-line Managers
The final piece of the alignment mission is the transfer of the strategic direction and culture from mid-level and senior-level managers to front-line managers. This discussion must happen in-person and should be aimed at translating strategy to execution.
To accomplish this, it’s important to enumerate strategic objectives and define tactical priorities for front-line managers. It’s also important to listen to feedback from front-line managers when they are asked, “What is the most effective way to achieve our goals?”
It’s All About Communication
When an employee understands the purpose of his job function and how it ties into the strategic positioning of the company, he is more apt to pursue excellence in that domain. It is this intimate understanding of one’s purpose in a company that must be attained before a company can successfully implement new ERP software or pursue business transformation.
Panorama’s business transformation consultants can conduct organizational assessments to help you understand your corporate culture and its readiness for organizational change. These assessments evaluate employees’ understanding of strategic goals and help us develop a change management plan to achieve organizational alignment.