Back in 2021, in the wake of the COVID-19 pandemic, a survey of 3,200 leaders and employees conducted by PWC across 40 countries found that 67% of respondents said that culture mattered more to an organization than strategy or operations.
I read this statistic with some surprise. Over my five decades of working with and studying executives, I’ve heard exactly the opposite: most executives would say strategy and operations matter more to an organization than having a healthy culture.
It’s possible that the timing of the PWC survey affected responses. After all, in 2021, many organizations were still navigating pandemic restrictions and work-from-home realities. In the environment of 2021, the weight of trying to maintain team cohesion and keep employees satisfied as the “Great Resignation” trend started to rise might have made leaders appreciate culture more than ever.
But even considering that possibility highlights the importance of culture—that is, when the chips were down, leaders recognized how important a strong, cohesive culture could be. Those companies with a good culture fared better through the tough months of the pandemic than those without.
The reality is that culture and strategy aren’t mutually exclusive—and they don’t have to be at odds with each other. Here are four ways a healthy corporate culture helps build and reinforce good company strategy.
Table of Contents
How a Healthy Culture Builds and Reinforces Strategy
1. A healthy company culture is always evolving.
In my book 52 Leadership Gems: Practical and Quick Insights for Leading Others, Gem #48 says “Culture is defined and redefined every day.” I like to say that culture is a verb, not a noun. A healthy company culture is always in a dynamic, evolving state that begins with the small behaviors people do every day. Senior leaders have more impact over the culture than any other group in the organization; their behaviors are watched by many and either modeled or critiqued throughout the organization.
An unhealthy corporate culture is stagnant. It might be mired in bureaucracies, or there might be a top-down approach where the only culture that matters is the one dictated by senior leaders. Such an environment discourages innovation and problem-solving.
In a dynamic company culture, the organization is teeming with ideas and energy. Leaders encourage a growth mindset and psychological safety that gives employees implicit permission to share good ideas and pursue innovation. Such creativity will naturally drive strategy and keep an organization competitive.
2. A healthy company culture is adaptable.
As many leaders realized during the COVID pandemic, disruption is inevitable, and even the best strategies and most finely tuned operations will sometimes be forced to pivot suddenly or even come to a screeching halt for a time.
In a stagnant, unhealthy culture, such sudden changes can be devastating. A stagnant culture often can’t accommodate rapid shifts; after all, there’s likely no “manual,” formal or informal, for how to respond culturally to disruption. Employees will function under new guidelines for a while, but if leaders can’t shore up the culture with positive behaviors, burnout will follow, and strategy and operations will suffer.
On the other hand, a healthy company culture can weather disruption and accommodate change; in the best circumstances, it will even welcome change. Leaders will have the change management skills to help even the most reluctant employees process and adapt.
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3. A healthy company culture is committed.
Every leader wants employees who are committed to organizational success; after all, committed employees will better drive strategy and keep operations running smoothly. However, it can be easy to miss the connection between company culture and employee commitment.
In an unhealthy culture, employees are indifferent to the success of the company. They may engage in “quiet quitting” behaviors—arriving late, leaving early, or just meeting minimum requirements of their jobs. Unhealthy cultures may become “toxic,” tolerating gossip, blaming, and victimhood. No strategy or operations can thrive in such an environment.
Healthy cultures are engaged and committed cultures. Employees are productive, often going above and beyond their job descriptions. They pursue growth and personal development in service of the organization’s goals, and they get excited when the company meets goals and objectives.
4. A healthy company culture has integrity.
The enormous warehouse chain Costco Wholesale has a simple Code of Ethics:
- Obey the law.
- Take care of our members (i.e., customers).
- Take care of our employees.
- Respect our suppliers.
While many organizations might embrace numbers two, three, and four on that list, the fact that Costco begins with the law reveals a commitment to integrity from the top down.
In unhealthy cultures, integrity is often entirely missing. Leaders might act in hypocritical ways, speaking about integrity while engaging in unethical or even illegal behaviors. Lack of integrity sends a message to employees that they need to watch their backs, which can lead to defensive, self-protective behaviors that undermine a healthy culture.
Healthy company cultures prize integrity and ethics above everything else. Leaders are as transparent as possible and share information freely with their teams. Employees trust their leaders and each other; when mistakes happen or failure occurs, they know their jobs are safe as long as they act with integrity.
The summary of Costco’s Code of Ethics explains it all: “If we do these four things throughout our organization, then we will achieve our ultimate goal, which is to reward our shareholders.” Costco’s leaders understand that driving a healthy culture of strong integrity creates a solid foundation for operations and strategic success.
What can you do if your company’s culture is stagnant, unhealthy, or toxic? First, don’t despair—cultures can change! With a careful approach toward creating more trust, openness, and integrity, over time, your organization can create a healthy, thriving, dynamic culture that drives strategy for years to come.
Self-check:
- Which matters more in our organization—culture or strategy? Why?
- Do we have a dynamic culture or a stagnant one? Why?
- What is one way we can better encourage integrity across our organization?
