Strategy x Behavior = Results

“Your company doesn’t make rational decisions. It makes decisions based on its culture.”

The most vital force acting within any team, group, family, or organization is its underlying shared culture. The cultures we are a part of set the stage for what we believe and how we behave. The levels of what is, or is not, acceptable are all generated by our culture. When faced with obstacles or challenging circumstances, our response is driven by the culture surrounding us. Contrary to what we might believe, even our daily decisions are less rational than we think. Because again, more so than rational thought, culture drives our thinking.

Published in 1982 and groundbreaking for its time, An Evolutionary Theory of Economic Change put forth the idea that “much of firm behavior” is best “understood as a reflection of general habits and strategic orientations coming from the firms past.” Simply put, cultures are built based on what groups have learned in the past, not what prepares them for what they need to accomplish in the future.

The book explains that while it may seem as though organizations process information, analyze it, and make rational decisions, organizations are driven by the prevailing direction of their culture.

If that cultural direction is out of alignment with the strategy we need to execute because the behaviors we have learned in the past don’t support future work, we will fail no matter how hard we try.

Once cultures are set, it is challenging for individuals to oppose them.

“The overwhelming majority of individuals will prove incapable of resisting the voice of the culture that surrounds them: in the typical case, their values, their beliefs, indeed, their very perceptions will tend to mirror those of the surrounding culture.”

So, not only is culture the strongest force guiding our behavior, we now know the force helping us make decisions, build strategy, and thrive as businesses is built based on principles that might not be the right ones for what we are facing today.

Culture tends to be underlying and invisible, so we often overlook it. Even worse, when we know building a strong culture isn’t within our skillset, we ignore it even more. We call it the “soft stuff,” and we check the box on culture initiatives. Until, of course, something bad happens…

We see this when brands we have known for years go out of business and become obsolete. Sears saw Amazon coming. Why were they not able to pivot? Blockbuster even had the opportunity to buy Netflix. What happened in the conference room that day that drove them to make the wrong decision?

Each year we update our business practices. We periodically update our office spaces. Every time a red alert pops up, we update the operating system on our phones and computers.

If culture is the operating system that drives behavior and the decision-making within our teams, when do we spend time updating it?

How can we ensure our organization’s culture will ultimately help move us in the direction we are trying to go?

Whether we like to admit it or not, our teams have a culture, and that culture is forming around us at all times. As we learned from An Evolutionary Theory of Economic Change, our culture drives our decision-making and sets the parameters of how to behave. That culture will have a significant impact on what we will achieve and who we will become. It exists as its own living, breathing, and constantly evolving entity that connects and permeates through our organizations. It drives our current outputs, our future roadmaps, and our eventual success.

Leaders need to be aware that we can change, we can improve, and we can update our behavioral operating systems to better support the execution of our strategies. We can get better results, and in the process, we can create more growth for our people.

When leaders intentionally update and align team behavior to the strategy they need to execute, they quickly adapt to changing circumstances and consistently deliver results.

To succeed, we need to encourage open conversation about how we should behave versus how we act today. We need to be intentional about discussing the undiscussables that lead us to perform inefficiently and make bad decisions.

Here are a few steps to make sure you consistently build the culture that makes great decisions, gets results, and supports your people.

Spend Intentional Time

The first step to harvesting the group culture that will better support your people and your strategy is to spend time constructing it. Great culture doesn’t happen accidentally, just like great marriages rarely occur simply because two people tied the knot. Look ahead at your schedule for the year and make sure you have set time on the books to talk about and to improve your culture.

Honest Communication

To continuously improve culture, we need to continuously improve communication. The most significant barrier we face? Fear. People afraid to speak up is cancer for the cultural health of an organization. Eliminate fear by sharing vulnerability and striving for communication-based on truth. To do this well, leaders must invite people to discuss the un-discussable.

Crave Diversity of Thought

The greatest input to changing cultural direction is having people in the room who can offer different thoughts and perspectives. The decisions we make will only be as great as the sum of the viewpoints in the room making the decision. The more you have, the better the ideas get.

Master Change

When you decide on a new direction, teach people the difference between old behavior and new. Teach them how to proactively live the new aspects of your culture and, most importantly, help people create plans to overcome instincts to revert to old and unwanted behaviors.

Compass Questions

  1. Think about the last big decision you were forced to make. What played a bigger role in the decision you made? Rational thought or the implications of aligning your result with the culture of the organization?
  2. Think about the culture of your team. Does it need to be updated? Are the beliefs and behaviors of your team stuck in the past or focused on what you need to accomplish in the future?
  3. Think about your organization as a whole. Is your current company culture aligned to your current strategy? At scale, are the right decisions being made to advance the organization?
Written by Steve Wasik

Photo by Saad Ahmad on Unsplash