Winning with culture

Don't blame culture for business problems, instead focus on the critical few behaviours that need to change in the context of the culture

The 26/11 terrorist attack scarred the collective memory of the nation. The incident also evokes images of 11 Taj Mahal employees who laid down their lives while helping around 1,250 guests escape. What incubated such a customer-centric culture that led them to place the lives of their guests above their own? According to an article in the Harvard Business Review, the Taj employees' actions weren't prescribed in manuals; no official policies or procedures existed for an event such as 26/11. The unusual hiring and incentive systems, the values of the House of Tata, which owns the Taj Group (Taj is a global five star hotel chain) and Taj Mumbai's roots in the movement for a free India - may have together combined to create an organisational culture in which employees are willing to do almost anything for their guests.

So what is this fuzzy thing called 'culture'? We believe that an organisation's culture is its self-sustaining pattern of behaving, feeling, thinking, and believing. Many chief executives believe that organisational culture will be critical to help them address the strategic challenges. They see their most important responsibility as being the custodian of the company's culture.

Don't blame your culture, embrace it

That corporate culture is a critical ingredient of an organisation's success is nothing new. What we are just beginning to learn, however, is that an existing corporate culture doesn't necessarily need a complete overhaul. If you are seeking change in your organisation, you are most likely to succeed using your existing culture to help you change critical few behaviours that matter the most.

Senior leaders in many Indian companies often blame their culture for business problems. For example, a senior leader in a private company said "Our 'Lala' (promoter-driven) culture prevents us from building a scalable process-driven organisation that is required to compete in the International markets." Another senior leader at a government-owned bank said, "Public sector mentality prevents us from being fast and nimble in the marketplace." However, we often find that the same "Lala" culture is the driver of fast paced/entrepreneurial growth. And the same public sector culture brings tremendous pride among people due to its heritage.

Instead of changing the culture, focus should be on the critical few behaviours that need to change in the context of the organisation's culture. Tata, Infosys, P&G, Apple and Google are among the companies noted for unique cultures that contribute to their competitive advantage.

The Katzenbach Centre at Strategy& conducted a Global Culture and Change survey in late 2013, covering more than 2,200 executives, managers, and employees across the world, including India. While majority of the respondents believe that culture is critical to their organisation's success, only 38 per cent in India, as compared to 60 per cent globally, believe that it is more important than strategy. The result isn't surprising. India's exponential growth has allowed many companies to expand. But, development of the informal aspects of the organisation, including culture, hasn't kept pace.

Further, though 53 per cent of all managers and employees in India say that culture in their organisation is in need of a major overhaul, only 24 per cent believe that culture is being effectively managed in their organisation. It seems clear that there is a disconnect between what many companies say about culture and how much they attend to it. Putting all of this together, there seems to be an opportunity, indeed a need, to evolve culture itself so that it can be used as more of a change lever and, in some cases, to have culture lead the change.

Leveraging culture

Most organisations in India and globally cite leadership capacity, organisational capabilities and scalable operating model as challenges they face to realise their growth plan. We believe that those organisations that methodologically leverage culture will come out as winners. Traditional change levers - including top-level diagnostics, organisational design, performance management, metrics, and incentives, may all be crucial depending on the change initiative. A change effort needs to lead with culture as part of a more holistic approach if a transformation programme is to have the best possible chance of success. In particular, the change needs to draw on the positive cultural attributes already embedded in the organisation.

Anshu Nahar
Principal, Financial Services practice, Strategy&

Pali Tripathi
Co-leader, Organisation, Change & Leadership, Strategy& India