Michael Porter, the renowned strategist, once succinctly stated, “The essence of strategy is choosing what not to do.” While this may sound simple, we all know simple does not mean easy. The complexity of human nature and our cognitive biases make the prioritization of strategic investments a challenging task. However, when developing and executing strategy, getting and keeping the executive team aligned to these priorities can be even harder. If priorities constantly change or are undermined by “pet projects” and executive fiat, the broader organization has no chance at successful execution. Corporate culture plays a significant role in helping or hurting this dynamic.
With limited resources to allocate to strategic initiatives, inevitably several “good” ideas need to be sacrificed for one “great” idea. If your department is the main benefactor for one of the “good” ideas, that sacrifice is real.
Does Your Culture Help or Hurt?
Several aspects of corporate culture will impact how easy it is to make that sacrifice and how likely executive alignment around organizational priorities will stick. Recognizing the enablers and inhibitors to getting and remaining aligned is the first step to ensuring it happens. Based on 36 years of business and our collective experience, IPM identified the critical attributes of culture that have the strongest impact on strategy realization. Consider questions like these:
- Strength of leadership: Do leaders shy away from unwelcome news? Do they insist on pushing forward despite evidence or resistance from the implementation teams?
- Collaboration and teamwork: Do leaders agree in principle but hoard resources in practice? Does the culture revere heroics over teamwork?
- Relationship quality and trust: How does physical proximity (or the lack thereof) influence trust? Has the executive team had a long-standing working relationship, or are they new and still in the forming/storming phase? What does the organization’s political landscape look like?
- Engagement, responsibility, and accountability: How are commitments established, tracked, incentivized, and enforced?
- Authority and empowerment: Do leaders exhibit an authoritative style, stifling alternative ideas or preventing contradictory information from flowing upwards? Are leaders overly empowering, allowing lower-level decisions to cause misalignment?
- Communication effectiveness: Is the strategic portfolio typically “set and forget” or actively managed? How frequent and qualitative is the information flow when changes occur? Is there a robust feedback mechanism in the organization, from bottom to top? How pronounced are the organizational silos?
- Value and respect: How are individuals and teams acknowledged and rewarded?
- Decision and planning approach: Is urgency prioritized over accuracy? Does the organization easily get sidetracked by new, shiny opportunities? Is there a culture of impatience? Does the organization value discipline? Are leaders overly optimistic about the resources required for plan execution?
Once the executive team has assessed the potential challenges and advantages organizational culture presents, and the obstacles to alignment are clear, preventive measures can be implemented. These often take the form of improved communication, additional measurement, process guardrails, regular reviews, dedicated strategic portfolio leadership, and other checks and balances.
Executive Alignment and Compliance Are Key
In our own organization, we speak to the risk that a small misalignment among leaders will leave a gap that will only widen as it permeates the organization. We rely on the trust and openness built among the team (and all levels of the organization) to challenge each other where we see this happening. Alternatively, I have seen the opposite happen firsthand at numerous clients where the executives are the first to work around an agreed upon priority to continue progress on their pet project. Nothing can erode confidence in a decision-making process faster.
The influence of corporate culture on executive alignment and strategy execution is profound. Organizations that recognize and understand this correlation are better equipped to align their leaders, execute their strategies efficiently, and flourish in a constantly evolving business landscape.
April 22, 2024
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