IMPLEMENTING
STRATEGY: CULTURE
AND LEADERSHIP
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“An organisation’s capacity
to execute its strategy depends on
its “hard” infrastructure, structure
and systems and on its “soft”
infrastructure - its culture and
norms.”
Amar Bhide
What Makes Up a
Corporate Culture?
Beliefs about how business ought to be conducted
Values and principles of management
Patterns of “how we do things around here”
Oft-told stories illustrating company’s values
Taboos and political don’ts
Traditions
Ethical standards
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Features of a large retailer cuture
Dedication to customer satisfaction
Zealous pursuit of low costs
Belief in treating employees as partners
Sam Walton’s legendary frugality
Ritualistic Saturday morning meetings
Executive commitment to
Visit stores
Talk to customers
Solicit employees’ suggestions
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Where Does Corporate
Culture Come From?
Founder or early leader
Influential individual or work group
Policies, vision, or strategies
Traditions, supervisory practices, employee attitudes
Organisational politics
Relationships with stakeholders
Internal sociological forces
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How Is Culture Sustained?
Continuity of leadership
Select new employees based on personality “fit”
Systematic indoctrination of new employees
Senior employees’ reinforcement of core values
Story-telling of company legends
Ceremonies honoring employees who display cultural ideals
Visibly rewarding those who follow cultural norms
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The Power of Culture
Culture can contribute to or hinder successful strategy
execution
Requirements for successful strategy execution may or may
not be compatible with culture
A close match between culture and strategy promotes
effective strategy execution
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Benefits of a Good Culture - Strategy Fit
Strategy-supportive cultures
Shape the mood and temperament of the work force
positively affecting organisational energy, work
habits, and operating practices
Provide standards, values, informal rules and peer
pressures that nurture and motivate people to do
their jobs in ways that promote good strategy execution
Strengthen employee identification with the company,
its performance targets, and strategy
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Benefits of a Good Culture-Strategy Fit (cont.)
Strategy-supportive cultures
Stimulate people to take on the challenge of realising the
company’s vision, do their jobs competently and with
enthusiasm, and collaborate with others to execute the
strategy
Optimal condition: A work
environment that
CanDo!
Promotes can do attitudes
Accepts change
Breeds needed capabilities
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Strategic Management Principle
Anything so fundamental as
implementing a new or
different strategy involves
aligning the organisation’s
culture with the requirements
for competent strategy
execution.
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Types of Corporate Cultures
Strong vs. Weak Cultures
Low-Performance Cultures
Adaptive Cultures
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Characteristics of
Strong Culture Companies
Conduct business according to a clear, widely-understood
philosophy
Management spends considerable time spent communicating
and reinforcing values
Values widely shared and deeply rooted
Often have a values statement
Careful screening/selection of new employees to be sure they
will “fit in”
Visible rewards for those following norms; penalties for those
who don’t
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How is a Strong Culture Built?
Leader who establishes values consistent with:
Customer needs
Competitive conditions
Strategic requirements
A deep, abiding commitment to espoused values and
business philosophy
Practicing what is preached!!
Genuine concern for well-being of:
Customers
Employees
Shareholders
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Strategic Management Principle
Strong cultures promote good
strategy execution where
there’s fit and hurt execution
where there’s little fit.
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Characteristics of
Weak Culture Companies
Many subcultures
Few values and norms widely shared
Few strong traditions
Little cohesion among the departments
Weak employee allegiance to company’s vision
and strategy
No strong sense of company identity
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Characteristics of Low
Performance Cultures
Politicised internal environment
Issues resolved on basis of turf
Hostility to change
Experimentation and efforts to alter status quo
discouraged
Avoid risks and don’t screw up
Promote managers who are more concerned about process
than about results
Aversion to look outside for superior practices
Must-be-invented here syndrome
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Hallmarks of Adaptive Cultures
Introduction of new strategies to achieve superior performance
Strategic agility and fast response to new conditions
Risk-taking, experimentation, and innovation to satisfy
stakeholders
Proactive approaches to implement workable solutions
Entrepreneurship encouraged and rewarded
Top managers exhibit genuine concern for
customers, employees, shareholders, suppliers
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Creating a Strategy - Supportive
Cultural Fit
STEP 1
Diagnose which facets of present culture
are strategy-supportive and which are not
STEP 2
Talk openly about those aspects of
present culture that need to be changed
STEP 3
Follow with swift, visible actions - some
substantive and some symbolic
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Symbolic Culture-Changing Actions
Emphasise frugality
Eliminate executive perks
Require executives to spend time talking with customers
Alter practices identified as cultural hindrances
Visible awards to honor heroes
Ceremonial events to praise people and teams who “get with
the program”
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Substantive Culture-Changing Actions
Benchmarking and best practices
Set world-class performance targets
Bring in new blood, replacing traditional managers
Shake up the organisational structure
Change reward structure
Increase commitment to employee training
Reallocate budget, downsizing and upsizing
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Topics Covered in Value Statements
Customer importance
Commitment to quality
Commitment to innovation
Respect for individual employee
Importance of honesty
Duty to stockholders
Duty to suppliers
Corporate citizenship
Protecting the environment
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Instilling Values in the Culture
Incorporate values statement in employee training
programs
Screen out applicants who do not exhibit compatible
character traits
Communicate the vales to all employees
Management involvement, participation and oversight
Strong endorsement by CEO
Word-of-mouth indoctrination
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Building a Spirit of High
Performance Into the Culture
Emphasise achievement and excellence
Promote a results-oriented culture
Pursue practices to inspire people to excel
Desired outcome:
Produce extraordinary results with ordinary people
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Approaches to Building a
Spirit of High Performance
Treat employees with dignity and respect
Train each employee thoroughly
Encourage employees to use initiative
Set clear performance standards
Use rewards and punishment to enforce high performance
standards
Hold managers responsible for employee development
Grant employees autonomy to contribute
Make champions out of people who excel
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Six Roles of the
Strategy Implementer
1. Stay on top of what’s happening
2. Promote a culture energising organisation to accomplish
strategy
3. Keep firm responsive to changing conditions
4. Build consensus and deal with politics of crafting and
implementing strategy
5. Enforce ethical standards
6. Take corrective actions to improve overall strategic
performance
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Role #1: Stay on Top
of What’s Happening
Talk with many people at all levels
Be an avid practitioner of MBWA
Observe situation firsthand
Monitor operating results regularly
Get feedback from customers
Watch competitive reactions of rivals
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Role #2: Foster a
Strategy - Supportive Culture
Successful leaders
Spend time convincing organisation members that the
chosen strategy is right and that competent strategy
execution is top priority
Nurturing values
Building and nurturing a culture that promotes good
strategy execution
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Leader’s Role in Matching
Culture and Strategy
Create events where all managers must listen to
Angry customers
Dissatisfied stockholders
Alienated employees
Energise employees to make new strategy happen
Repeat desired cultural values again and again
Reward people exhibiting desired cultural norms
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Role #3: Keep Internal
Organisation Responsive
Promote openness to fresh ideas
Pursue attractive new opportunities
Support people who are willing to champion
Innovative ideas and products
Better services
New technologies
Promote continuous adaptation to changing conditions
Build new competencies and capabilities
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Leader’s Role in
Empowering Champions
Encourage people to be creative and imaginative
Tolerate mavericks with creative ideas
Promote lots of tries and be willing to accept failures
Use all kinds of organisational means to support
experimentation (teams, task forces, “skunkworks” and
individual champions)
See that rewards for successful champions are large and
visible
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Leader’s Role in
Developing New Capabilities
Responding to changes requires top management intervention
to establish new:
Organizational capabilities
Resource strengths and competencies
Senior managers must lead the effort because
Competencies reside in combined efforts, requiring
integration
Clout is needed to enforce necessary networking and
cooperation
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Role #4: Dealing with Politics
Politics in strategy-making
Winning agreement on long-term direction, objectives, and
strategy
Politics in implementing strategy
Choosing people to fill key positions
Delegation of authority
Whether and how to reorganise
Who reports to whom
Deciding which units get biggest budget increases and
which get downsized
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The Political Role
of the Strategy Leader
Stimulate options
Nurture support for strong proposals and kill weak ones
Guide formation of coalitions on certain issues
Achieve consensus and commitment
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Political Tactics of
Successful Executives
Let weakly supported ideas die Lead the strategy but don’t
via inaction
dictate it
Establish hurdles for strongly
supported ideas that
shouldn’t be opposed
Keep low profile on
unacceptable ideas by
getting subordinates to say
no
Stay alert to symbolic impact
of one’s actions
Ensure all major power bases
have access to top
managers
Inject new views when
considering major changes
Let most negative decisions
Minimize political exposure on
come from group consensus
highly controversial issues
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Role #6: Lead the Process of
Making Corrective Adjustments
Requires both
Reactive adjustments
Proactive adjustments
Involves
Reshaping long-term direction, objectives, and strategy to
unfolding events
Promoting initiatives to align internal activities and
behaviour with strategy
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