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Aligning Strategy and Culture


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Implementing the lessons learned at Hay Group’s 2012 International Conference.

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Aligning Strategy and Culture

  1. 1. Aligning strategy culture Implementing the lessons learned at Hay Group’s 2012 International ConferenceThe biggest challenge for most organisations is not working out what their strategyshould be, but working out how to bring it to life and make it happen >>As Israel Berman, head of Hay Group in Europe, said in his opening n Actions and behaviours – clarity about desired behaviours, remarks at this year’s Hay Group International Conference in Berlin, managing performance in line with these, rewardwhat differentiates the best companies from the rest is a powerful programmes that reinforce them.corporate culture that drives great performance, enabling teams It is critical to have alignment between the organisation’s coreand individuals to realise their strategy and their own potential. values, the messages it sends to people and the behaviours itCulture drives performance through three channels, explained expects of them.Hay Group’s Jean-Marc Laouchez: And alignment has proven results. Hay Group’s research findsn hared purpose and values – the true heart of culture. S that organisations with well-aligned cultures show consistently better results than other companies, with an average five-yearn rganisational messages and reinforcements – role models, O return on investment that is twice as high and gross profit organisational design, management systems, brand language. margins that are 27 per cent higher.©2012 Hay Group. All rights reserved
  2. 2. Aligning strategy and culture: Implementing the lessons learned at Hay Group’s 2012 International Conference Here, we outline the key findings from the International Conference on how to nurture a high-performance culture and we suggest ways to implement them successfully in your organisation. Align values, messages and behaviours to drive results The best organisations ensure they have What you can do now: a shared, deep purpose and vision that is understood by all. They establish their values n Evaluate whether your organisation has – perhaps customer focus, commitment, a shared purpose that goes beyond just entrepreneurialism or innovation– and achieving financial goals – for instance, does it clarify the behaviours they want to see. They touch on serving the customer or community? do not rely simply on words on a poster n Define the values and behaviours that are to communicate these, but use the right needed to support the shared purpose – and catalysts to embed the values and behaviours identify gaps that need to be closed. throughout the organisation. Leaders role model the right behaviours; organisational n Assess whether you have aligned your design and management systems support performance management system, internal them; staff are rewarded for demonstrating communications and rewards to foster the the right behaviours and performing well. behaviours that you want to see. Case studies: Align values, messages and behaviours to drive results Johnson Johnson, for example, underlines Kim Hauer of Caterpillar showed how its customer focus by inviting a customer using leaders as teachers, introducing (perhaps a doctor, nurse or patient) to talk an annual performance management about the impact of JJ products on their programme tied closely to results, and life at the start of meetings. weekly visits from Chairman Doug Oberhelman to customer sites, shaped “ A desk is a dangerous place a hands-on and customer-centric focus from which to view the world Oberhelman, CEO, Caterpillar Doug ” ‘from the top.’ This unique culture has helped Caterpillar drive profits up by 80 per cent. Caterpillar drive profits up by 80%©2012 Hay Group. All rights reserved
  3. 3. Engage and enable staffto enhance performanceStaff enablement is about much more than n Develop and communicate a specific motivation: it is about ensuring employees definition of career development,have the tools they need to do their job specifying what it means, where it occursproperly without frustration and that there and the distinctive opportunities for growthare no significant barriers in their way. Our and development your organisation offers.research shows that organisations where Outline the responsibilities of individuals,members of staff are both engaged and managers, and the organisation.enabled show more than four times therevenue growth of those in the lowest quartile. n Take a total rewards approach. To help employees see the balance betweenIn many organisations, engaged but frustrated contribution and what they get back,employees suffer in silence, not wanting to be ensure that reward communicationsseen as trouble makers; these are the people emphasize the full range of rewardsmost likely to jump ship. Many staff surveys focus the organisation offers employeesonly on motivation and engagement, looking (both tangible and intangible).at employees’ desire to go the extra mile, ratherthan examining whether the structures they n Provide employees ‘specific freedom to have in place enable them to do this. It is critical act’, ensuring that they understand whichto investigate both elements. decisions they can and cannot make. When the scope of decision making is unclearWhat you can do now: employees will be disinclined to take risks or make even simple decisions.n Determine whether employees are hearing consistent messages from managers at n Train managers to regularly evaluate all levels. If middle managers and first- processes, ensuring that roles and work line supervisors are supportive of senior systems are aligned with present work executives, they can foster high levels of demands in order to avoid the trap confidence in the organization’s leadership. of routines.
  4. 4. Aligning strategy and culture: Implementing the lessons learned at Hay Group’s 2012 International Conference Challenge the unwritten rules CRC increased its to enable transformation turnover by 770% The most successful leaders have the courage What you can do now: to confront the ‘unwritten rules’ embedded in n Write down the unwritten rules and interrogate their corporate culture, and recognise that their usefulness. the biggest enemy to change often lies within the company. It takes courage to go deep and n Identify the leadership mindsets and behaviours acknowledge the emotional barriers and the that are serving as barriers to transformation. unhelpful mental models that are getting in n Consider leadership development programmes the way of progress. to aid top team collaboration. Case studies: Challenge the unwritten rules to enable transformation Hay Group’s Wayne Chen and CRC’s Mr Du Christian Majgaard described the unhelpful Wenmin described the transformation of paradigms that Lego had to confront and CRC in China from an organisation that the changes it had to go through to rescue valued personal strength to one that fostered its fortunes after the advent of electronic organisational capability and strategic games seriously dented its sales: eradicating thinking. Top leaders worked hard to be more secrecy and forging external alliances; open and transparent, to develop a common embracing Hollywood (which would language and to share, collaborate and coach previously have been seen as “making each other. This has helped CRC increase its contracts with the devil”) and identifying turnover by 770 per cent since 2000. new distribution channels.©2012 Hay Group. All rights reserved
  5. 5. Embrace diversityto drive changeA diverse workforce brings enormous value to What you can do now:an organisation. For companies entering newmarkets, having employees who understand n Aim to recruit different people by using the culture and practices of those countries more objective assessment methodologiesis essential. But, even at home, a workforce that avoid the ‘just like me’ syndrome andthat is diverse in terms of age, experience, show clear links to role requirements.educational and socio-economic background, n Purposefully put together groups/project as well as race, culture and gender, will bring teams of people from different backgrounds.different perspectives that can broadenhorizons and catalyse change. Diversity is n Use diagnostics to see if different groups challenging for organisations, as we all find it view the organisation/work in different ways,easier to spend time around people who are then act on the us – but the rewards are plentiful. n Have facilitators who help teams harness the varying views of their members – people with no vested interest in the ‘right’ solution. Case studies: Embrace diversity to drive change What gets people out of bed in the morning IBM’s Corporate Service Corps sends teams is different for different people, noted of 30 people from across the world to leading business thinker Tamara Erickson. work on month-long projects in Kenya, for Some thrive on risk and want no two days example, to learn about new key markets to be the same; others prefer to stay firmly and develop global relationships, said within their comfort zone. Understanding business expert Anil Gupta. The employer what excites each employee is key to gains twice: it cultivates high potentials with mobilising their intelligence and inspiring a global mindset and it aids recruitment by them to perform. offering one of the most sought-after career plans in the world.What gets people out of bed in the morning isdifferent for different people. Understandingwhat excites each employee is key to mobilisingtheir intelligence and inspiring them to perform.
  6. 6. Aligning strategy and culture: Implementing the lessons learned at Hay Group’s 2012 International Conference Instil a networking culture to foster innovation Moving away from a command and control culture What you can do now: towards a networking culture is a journey that pays dividends, allowing organisations to attract top talent n Check to see if roles and strategic objectives are and capitalise on employees’ diverse skills. The best clear, while providing freedom to adapt tactics to organisations welcome ideas from all levels of the changing conditions. workforce and encourage everyone to contribute. n Examine whether your leaders are pushing The best leaders, meanwhile, inspire rather than decision making to the lowest levels possible in order, catalyse rather than command. They have the organisation and encouraging collaboration. learned that they do not need to have all the n Build processes for two-way communications that answers; the trick is to ask great questions that enable leaders to provide vision/direction and excite employees and unlock their discretionary listen to ideas/feedback from their employees. effort. It is also critical to get the ‘piping’ right, by ensuring you have the physical environment and frameworks to foster new thinking and collaboration. Case studies: Instil a networking culture to foster innovation Anil Gupta pointed out that the People thrive when they are given clear organisations that are most successful roles and ambiguous tasks, said Tamara, in emerging markets are the ones with using the example of a BBC news team firm roots and values but which give their made up of specialists with deep expertise managers in distant markets the freedom in their own roles. Understanding exactly and responsibility to make decisions and what they have to do enables them to enter respond quickly to local conditions. an unknown situation, such as a war zone, and work together successfully to produce “ Cut your chains and you become free; cut ” your roots and you die Anil Gupta excellent reports. Five questions to ask yourself now 1 Are you clear about the behaviours that you want to see – should you rethink reward to support and emphasise these? 2 Are your roles clear and doable – or are overcomplicated structures, insufficient training or unsupportive colleagues hampering your best talent’s ability to thrive in their role? 3 Are your attempts to change the organisation thwarted by unwritten rules – how can you help people to reframe their mental models? 4 Do you truly embrace diversity – what could you do to make your workforce more diverse and encourage healthily disruptive ideas? 5 Are your structures too top-heavy and your leaders too controlling – how can you move towards a networking, collaborative culture? Hay Group is a global management consulting firm that works with leaders to transform strategy into reality and to help people and organisations realise their potential. To find out more about how Hay Group can help you with these challenges, visit©2012 Hay Group. All rights reserved