The CEO’s Role in Aligning Corporate Culture

CEO’s Role in Aligning Corporate Culture is Growing

The CEO’s role in aligning corporate culture to the strategy has never been more important.  It’s hard to overstate the role of a CEO in the success of a company.  The CEO has the ultimate responsibility (as in “the buck stops here”) for business success.

But few leaders fully understand the role the CEO can play in perhaps the most important aspect of a company’s overall performance — whether the workplace culture helps or hinders the strategic agenda.

What is Corporate Culture?
We define corporate culture as the way things get done on a day-to-day basis.  It’s all about how employees think, behave and work.  This includes the known and unspoken corporate values and assumptions that drive key business practices and behaviors — particularly in who leaders hire, fire, and promote.

In large part, organizational culture is set by its founder but company cultures evolve over time.  The CEO has the platform as the most visible leader to shape the corporate culture that is so critical to an organization’s success or failure.

A Successful Workplace Culture
A recent Harvard Business School research report described how an effective culture can account for up to half of the differential in performance between organizations in the same business.  And our own organizational alignment research found that cultural factors account for 40% of the difference between high and low growth companies.

Can there be a more powerful motivator for CEOs to get culture right?

What a CEO Can Do
Understanding the importance of a CEO’s Role in aligning corporate culture, here are four moves you can make as a CEO to shape your culture in a way that fuels your strategy:

1. Create Strategic Clarity
   High performing CEO’s ensure that each and every employee can articulate the overall strategy and their individual contribution to moving it forward.  High performing CEOs invest the time required to actively gather and incorporate feedback from key stakeholders and facilitate a strategy retreat until they believe the strategy sets the winning formula for success.

   Strategic clarity accounts for 31% of the difference between high and low performing CEOs.  Is your strategy clear enough?

2. Define the Culture You Need to Best Execute Your Strategy
   While your strategy defines the “what”, your culture defines the “how”.  Once your strategy is clear enough to act, it is time for the executive team to prioritize the critical few cultural shifts required to accelerate the strategy.

   We have identified 10 research-backed dimensions that define the unique cultural attributes in terms of strategic alignment.  Effective leaders shape their organizational culture in a way that drives the business strategy forward to its full potential across these cultural dimensions:

   — Market Approach: from adopter to leader

   — Customers: from transactional to intimate

   — Loyalty: from individual to company

   — Focus: from internal to external

   — Risk Tolerance: from low to high

   — Operational Approach: from low to high process variation

   — Decision Making: from centralized to decentralized

   — Information: from fact-based to intuition-based

   — Atmosphere: from social to disciplined

   — Results: from “the how” to “the what”

3. Measure Your Current Culture
   Once your strategy is clear and your desired culture has been identified, it is time to assess your current culture through the eyes of the rest of the organization.  This involves conducting an organization-wide survey to benchmark key organizational health and culture dimensions to see where you stand and how to best fill the top cultural gaps.
4. Close the Culture Gaps
   Once the priorities have been identified, your final step as a CEO is to ensure that practical and implementable action plans are created, implemented, and monitored to align your culture to your strategic objectives.

The Bottom Line
Because strategy must go through culture to get implemented, high performing leaders know that the CEO’s role in aligning corporate culture is a primary lever to peak performance.  CEO’s are expected to chart the course for what matters most and how work should get done.  Are your leaders doing enough as cultural leaders?

To learn more, download Do You have a High Performance Organizational Culture to Drive Your Strategy?