OPINION: Culture eats strategy for breakfast

Does this statement surprise you? In our industry when the going gets tough the norm is for an agency to start tightening the purse strings and putting strategy first. But this statement, often attributed to management guru Peter Drucker, seems to suggest that it may not be the best course of action. In fact, its been suggested that in order for any strategy to succeed, the agency’s internal culture needs to be aligned to best deliver on that strategy.

Consider the research evidence:

A study done by Hewitt Associates shows that ‘Top 100 best employers’ experience 50 per cent higher investment returns.

According to a study by Pricewaterhouse Coopers, firms deemed ‘effective people managers’ were able to generate 35 per cent higher revenue per employee.

A Gallup study has established that firms with high employee engagement are 50 per cent more likely to have low staff turnover and 38 per cent more likely to have higher productivity.

Companies with an ‘adaptive’ (i.e. an organisation that learns from challenges and successes on an ongoing basis) culture that is aligned to their business goals routinely outperform their competitors; some studies report this difference as 200 per cent or more.

So what is culture? In an organisational context one could say that a culture refers to the values and practices shared by the employees of a company. Very often culture develops unconsciously often based on the values and core beliefs of top management. Leaders could also more consciously influence the culture of an organisation by articulating and actively communicating aspirational values.

According to a study done by Randstad US, a provider of HR and staffing services, 35 per cent of employees report that company culture has the greatest impact on morale. A culture that employees thrive in is becoming more and more relevant to employees too, given the significant chunk of time they spend at work. With the demise of traditional communities, companies are also fulfilling employees’ need to belong to a community.

By focusing on agency culture, agency leaders can not only meet the community and social needs of their employees, but, if the evidence is anything to go by, perhaps also harvest the benefits of long term improved business results. The old Telstra line ‘It’s what brings us together that sets us apart’ comes to mind.