In strategy, execution is everything. And every study of execution, success and failure comes down to the same thing: people. Human idiosyncrasies can sink a strong strategy or save a weak one. In this series of four articles, based on both my academic research and decades of real-world experience, I’ll talk about this human side of strategy, beginning with organisational culture, then cross-functional alignment, then individual behaviour and finally, commitment to strategy.

Organisational culture is such an abused term, so let’s get it straight: Organisational culture is that persistent pattern of behaviours, structures, processes and other observable features that are shaped by the organisation’s implicit and explicit values, which in turn flow from its assumptions about how to succeed in its environment. Figure 1 shows how culture works.

Like any culture, your company’s is a complex, subtle thing but if you memorise seven things in Box 1 then you will know most of what you need to know about your company’s culture.

Figure 1: How organisational culture works

Culture is an implicit mechanism for achieving success by aligning the organisation to its environment. Strategy is an explicit mechanism for achieving success by aligning the organisation to its environment. Do you see the problem? Two different ways of doing the same thing, often while ignoring each other. Culture and strategy often conflict and when they do culture wins. Consider this simplified, real-world example. Company X has decided to compete by offering value beyond the pill, using service and digital health add-ons. This requires an integrated market access strategy, talking about health economic outcomes to people who make formulary and care pathway choices based on value. It also means pulling away from detailing products to prescribers. Both those new activities are a major change from the company’s usual activity. When this strategy fails, a post-mortem reveals it was never fully implemented.

‘Organisational culture is that persistent pattern of behaviours, structures, processes and other observable features that are shaped by the organisation’s implicit and explicit values’

Box 2: The elevator pitch
“Our results are the consequences of our behaviour. For decades, we’ve succeeded because our behaviour matched the way the market worked.

The market has changed, so we need to change some behaviours. Not all our behaviours, just some that don’t fit today’s world. That’s what our new strategy is about.

Behaviour change is slow, especially behaviour that has been successful in the past. To help it along, I want to help people see how the world has changed and why we need to change with it.

I don’t think it’s enough just to tell them. I want to show them. I want to adapt our existing symbols and ceremonies – like conferences and awards – to do that.
Can we talk about that?”

The sales team, asked to be field health economists, felt uncomfortable and kept talking to prescribers. The medical marketing team’s approval systems couldn’t sign off economic claims, so they fell back on approved but undifferentiated claims about minor clinical differences. The market access team, still working with a budget one-quarter the size of their marketing colleagues, couldn’t generate the weight of evidence needed. Everybody wanted change but nobody wanted to change. In this and many other examples, the culture was stronger than the strategy, which failed because it was never fully executed.

Culture’s strength comes from its pervasiveness and its implicitness. It influences every decision but there is no Culture Department to argue with, no culture plan to challenge and no culture budget to cut. Strategy fighting culture is like a fish fighting water. So, what’s to be done?

It’s often been said that an organisation doesn’t have a culture, it is its culture. That aphorism reveals the core truth that if you try to change culture, what you’re trying to change is what has made you successful to date. This means that culture engineers must tread very carefully, diagnosing first and treating with precision medicine.

Diagnosis begins with observation. And since you can only observe cultural behaviours, not the values and assumptions that create them, this is the place to start. Ask yourself what behaviours your strategy requires that are different from what you’ve done in the past. In company X, above, there were several newly required behaviours that jarred with ‘normal’ behaviour. In other examples, I’ve seen the need to work across therapy areas, for medical science liaison to work more autonomously and for account teams to tailor pricing regimes by account, all of which were ‘not the way we do things around here’. Anticipating these potential culture and strategy conflicts is the first diagnostic step.

The second is to work out what ‘the way we do things around here’ reveals about what the organisation thinks is important and not. For example, product detailing means you think clinical features and benefits are important, but perhaps cost-effectiveness is less so. Tight control over field teams? That implies that it’s important that they don’t go off-piste and suggests perhaps it’s less important that they can be responsive. Structured around disease areas? That suggests that it’s important to know specialists, but perhaps it’s less important to deal with pharmacy. Whatever the required change in behaviours is, the existing behaviour reflects what your organisation thinks is important. Identifying what the company thinks is and isn’t important – its values is the second diagnostic step.

Box 1: The seven truths of organisational culture

1. You can only see behaviours, not values or beliefs
2. Your culture implicitly pervades the entire organisation
3. Organisations only survive if their cultures fit the market
4. You can adapt your culture but you can’t transform it
5. Markets change faster than cultures, leaving them ‘out of sync’
6. Cultural change starts with beliefs, not behaviours
7. If culture and strategy conflict, culture wins.

The third, final, stage of diagnosis is to figure out the assumptions that give rise to its values. To stick with my examples, if you think clinical features and benefits are important, your assumptions might include that the prescribing decision is driven by comparison of clinical outcomes. If you think field teams mustn’t go off piste, maybe you’re assuming that success comes from controlling the messaging. If you think understanding specialists is key, perhaps your core assumption is that they have the decision-making power. Equally, what your organisation values reveals what you think is less important. In my examples, that might be non-clinical outcomes, operational flexibility and decision-making above the level of specialists.

‘Culture influences every decision but there is no Culture Department to argue with, no culture plan to challenge and no culture budget to cut’

So diagnosis means asking three questions (see figure 2). My simplified examples might make this diagnostic process look easy, when in fact it needs a lot of thought and the wisdom of experience. But at the end of it you will have identified two lists of existing, but perhaps implicit, beliefs. First, a list of beliefs that might support and strengthen your strategy and that you might wish to keep and amplify. Second, a list of beliefs that will, unless addressed, sink your strategy. For the purposes of this article, let’s concentrate on the latter.

Figure 2: Diagnosing culture

If you’ve identified some deeply held beliefs that were once true but are no longer and now threaten, via values and behaviours, to derail your strategy. How do you change them?

Firstly, know that you can’t change beliefs by email, instruction, storytelling or threats. Those methods lead only to ‘resigned behavioural compliance’, when strategy executors nod politely, pay lip service to what’s expected of them, tick all the boxes and then do what they want to do anyway. Prescriptive methods fail to change beliefs, shift values or only alter behaviour when someone is watching.

Organisational culture is changed by the same methods used in our wider societal culture, by symbolism and ceremony. Your company already has lots of symbols and ceremonies – awards, conferences, the big corner office, the car policy – that communicate and reinforce its cultural beliefs. If you need to change your culture so that it helps rather than hinders your strategy, you need to harness its symbols and ceremonies.

Dynamic symbolism, as we culture geeks call it, is a delicate art and isn’t painting by numbers. In my work with pharma and medtech companies, I’ve helped them shift cultures by using awards that recognise cross-therapy area working, a funeral ceremony that ‘celebrated the past success of detailing and said goodbye’ and even a stealthy, underground movement that made passing information between functions a cool, fashionable thing to do. Dynamic symbolism takes many forms but it always has two features. First, it begins by defining the beliefs that no longer hold true, the values they create and the behaviours they lead to. By contrast, methods that fail try to change superficial behaviours but leave their underlying beliefs and values unchallenged. Second, successful culture change is the result of a sustained effort. The metaphor about turning around an oil tanker was never more appropriate. In practice, changing culture so that it helps, rather than hinders, strategy execution requires a persistent pattern of dynamic symbolism, coherently executed over months and years. For this reason and others, cultural change is usually beyond the scope of anyone except senior leadership. So what can less senior members of the team do?

If you’re not a senior leader, prepare an elevator pitch. Culture change is complex so I recommend you strip out the jargon and keep it simple. My template for an elevator pitch is in Box 2. Feel free to adapt and copy it in your own organisation. You’ll notice I’ve avoided the word culture, because it’s so often misunderstood and stressed behaviour, which everyone understands.

Let me close with what is the most important single thing to remember about culture and strategy. You can’t and shouldn’t ignore the connection between the two. Because they are both trying to do the same thing, they always interact. In practice, that means you have a simple choice. Either you anticipate and manage that interaction or place your trust in luck. Do you feel lucky?