Corporate culture has a significant impact on your business. Attitudes, mindset, communication, and decision making are all for the large part driven by corporate culture.
The impact of corporate culture can be felt at all levels of an organization. It is, in essence, a company’s DNA. In practical terms, we can think of corporate culture as the habits of the organization and how things get done.
Most firms do some kind of annual strategic planning, in some form or another. It is important to recognize that corporate culture impacts the effectiveness of the strategic planning process as well as the quality of the decisions made and the implementation.
Management guru Peter Drucker said, “Culture eats strategy for breakfast.” In other words, if the corporate culture does not encourage open minded strategic thinking and bold, confident decision making, as well as committed implementation, all strategic planning efforts are futile.
Is your company’s strategic planning an annual two day retreat at the local country club that feels much the same as last year’s? Nothing ground breaking, insightful or controversial gets discussed. If you basically just ‘check the box’ on strategic planning you should take a good look at the corporate culture and its effect on the planning process.
Corporate Culture Can Hurt Your Business
Here are a number of company culture characteristics that contribute to an ineffective strategic planning process, weak decision making, flawed strategies and poor execution.
Corporate culture is difficult to change, but ego in the executive suite may very well be the most difficult to change because it usually involves the owner / founder / CEO.
A CEO with a big ego thinks he/she knows it all, does not allow for contrarian views, does not ask open ended questions, or solicits input. In this environment the other executives are often no more than worker bees, yes-men, and their experience and insights are not valued and underutilized.
It is not hard to see how a company’s performance can be jeopardized if the person at the top does not allow for input from others. Any strategic planning decisions will simply reflect the CEO’s opinion, right or wrong. The strategy is usually rather grandiose, not well though out, and lacking buy-in from the rest of the organization.
2. Lack of Insight
Past successes can lead to a management team becoming complacent. They start taking future success for granted. Often, these companies are overly focused on operations and the day-to-day problems. They tend to neglect developing a longer term perspective. Executives do not monitor business conditions as well as they should, if at all. Changes in market conditions, customer behavior, technology, the economy, all impact the business.
If management fails to develop real insight into what’s happening in the dynamic market place, they are not able to see new opportunities nor can they anticipate any threats to the business.