Consider this question: Does culture trump strategy?
If you believe articles like this one from the Harvard Business Review, culture trumps strategy every time the two are at odds. A common refrain we hear is “culture eats strategy for breakfast.” In my experience, this is an oversimplification.
Culture is the daily embodiment of an organization’s values and mission—regardless of what the CEO says are her company’s values and mission. If your organization is a ship, then culture is the engine infusing employees with energy to move in one direction or another. Strategy determines where the ship will go based on defined objectives set by the management team. Clearly, both culture and strategy matter.
Nonetheless, corporate culture is a hot topic these days, perhaps more so than strategy. Companies with strong cultures tend to thrive and attract the best and brightest in the workforce. This is a huge competitive advantage for marquee companies. Netflix’s senior leadership team created an extensive slide deck highlighting the company’s values five years ago and posted it on the Internet for all to see. Today, we admire Netflix for its innovative products, bold decisions, and work environment—all central components of its highly effective corporate culture. The results are impressive. Since 2010, Netflix’s stock has tripled.
Improving a poor work culture is challenging but far from impossible. For some companies changing organizational culture is the crucial first step to a brighter future. When assessing how a company’s culture is impacting performance, I find it helpful to quantify and explain culture using a simple framework based on four stages. This framework gives a point of reference as well as a clear direction for moving forward. One of my tools for evaluating culture is based on an updated version of the DuPont Bradley Curve, which I learned about from a business colleague who used it extensively when she was an executive there.
Modified DuPont Bradley Curve
Developed in 1995 as part of DuPont’s system of building stronger safety cultures within each division of the organization, the Bradley Curve measures and ranks an organization’s maturity, or Relative Culture Strength (RCS), based on three areas: leadership, structure, and processes. The curve separates cultures into four stages. As divisions move through each stage, injury rates decrease while productivity, quality, and profits increase.
In thinking about this, I found the Bradley curve can be modified to assess the positive or negative impact of culture on organizational performance. With a nod to Bradley, here are four modified stages for assessing culture in your organization:
- Reactive: People do not consistently take responsibility for their own actions. They believe success is often a matter of luck and somewhat random. There is little employee mentoring; established processes/protocols are rarely followed. A few strong performers stand out despite the organization’s culture.
- Dependent: People see success as a matter of following rules and processes that someone else makes. The organization is dependent on regular enforcement of effective processes, but employees over time feel constrained by the heavy hand of management. This is a critical stage since backsliding to Stage 1 (Reactive) can occur.
- Momentum: Individuals take responsibility for themselves and see how their actions make a difference to the organization’s performance. Success engenders success which builds confidence among teams. Processes are updated and refined by management with input from employees.
- Interdependent: Individuals feel shared ownership for success and take responsibility for themselves and others. High performance is an expectation. Candid, constructive feedback is welcomed. Teams actively converse with one another to understand different points of view before making strategic decisions. Regularly sharing “lessons learned” in the spirit of overall improvement is a hallmark sign of this stage.
Moving from Stage 1 (Reactive) to Stage 3 (Momentum) is critical for organizations to achieve sustained success. Reaching Stage 4 (Interdependent) means the organization has achieved alignment of leadership, structure and process.
The Four Stages of the Modified Bradley Curve
Netflix’s culture statements “All of Us Are Responsible for Ensuring We Live Our Values” and “We Help Each Other to Be Great” assume Stage 4 Interdependence. Google and The Bill and Melinda Gates Foundation design office space to encourage collaboration, teamwork, and, yes, interdependence.
One of our clients recognized the importance of changing its company culture, or, as the CEO put it, “We need to change the way we do things around here.” Following a cultural assessment using the modified Bradley Curve, it was easy to see this company’s culture was stuck in Stage 1 (Reactive). After several months of diligent work by the management team and full commitment from the CEO, we helped guide the company to Stage 2 (Dependent). It’s nice to see the company’s progress and even better to know the company is anxious to reach Stage 3 (Momentum) in the next six months. Once this company reaches Stage 4 (Interdependent), it will be obvious to anyone walking around its offices. Signs of collaboration, trust, energy, and engagement will be abundant, and, just like Netflix, the company’s stock will likely reflect the Interdependent stage as well.
Where is your organization today along the modified Bradley Curve? Feel free to contact us to discuss your results.