The business truism that “culture trumps strategy” gains new relevance and urgency in today’s rapid transformations. Where strategy articulates what an organization wants to achieve and how it intends to achieve it, culture manifests itself in what its people actually do. The gap between the two can be wide. And the inertia of the incumbent culture often sinks lofty corporate ambitions.
As the pace of change accelerates and disruption upends the status quo, solving the culture problem becomes imperative. Corporate strategy must both respond to immediate disruptions and initiate disruption to drive the next phase of growth. And while innovation and digital transformation enable this dual strategy objective of seizing the upside of disruption, culture must deliver.
For this reason, creating a more agile and innovative culture is a near-universal objective — and challenge — for the participants in EYQ’s CEO imperative study. “We are working toward a more open and more adventurous culture in relation to taking a risk,” says one of the participants. “We were very profit-and-loss, what-are-we-making-now focused, and have come to understand that culture could be about creating innovation. This creates a more dynamic workforce that helps to make us more bullet-proof long term,” recounts another CEO.
Six culture transformation imperatives
From the more than 65 hours of CEO interviews conducted in our study, a set of six culture transformation imperatives emerge. These are the areas where the CEOs are investing significant resources — including their personal involvement — to drive lasting behavioral change in their organizations.
1. Instill urgency to overcome the inertia of success
Success frequently complicates and hinders the objective of culture change. A long track record of past success — such as the ones established by the Global 5000 companies in our study — can engender complacency because it seemingly validates the current culture, even as disruption demands new attributes for future success.