Building a Culture that is Aligned

Success in speeding up the culture change will only come when everyone’s actions, beliefs and experiences are aligned from person to person and across the various functions of the company.

The more completely aligned the culture, the more everyone will concentrate on achieving the key results the organization wants to achieve.

In order to achieve the desired results, leaders must become effective at saying and doing things that foster the experiences that create or reinforce the beliefs that motivate the desired actions that produce performance improvements.

They must avoid saying or doing things that shifts the culture out of alignment, for example, praising and promoting an employee who does not demonstrate the organization’s cultural beliefs in his or her everyday work.

Leaders should understand that employment promotions create a lasting experience on employees at the same time instill different beliefs on them.

Promoting people who do not live your organization’s cultural beliefs is likened to a company travelling hundred miles per hour on an icy road, headed toward a cliff.

Effective leaders of culture change manage in a way that gets a culture aligned with results, and then they work to keep it aligned.

Transforming from one culture of unsatisfactory performance delivery to one of highly satisfactory performance delivery requires paying close attention to all the adjusting parts of your organization’s culture and making sure that they are accurately aligned to one another.

Neither meaningful nor rapid culture change will occur unless the experiences, beliefs and actions are aligned with and reinforce the key results or performance to be achieved.

If the culture is out of alignment, employees will pursue their own agendas at the expense of organizational goals and objectives, stress levels run high, decisions are made based on gut feeling rather than on facts and information and enterprise performance is painfully poor.

The opposite holds true, if the culture is aligned and there is goal congruence, there will be accelerated positive culture change, everyone stays on the same page, people feel less stressed, decisions are intelligently made using analytic-based information and facts and enterprise performance is positive.

Like managing culture, maintaining alignment is a process, not an event.

You may gain complete alignment around key performance improvements and cultural beliefs, but at some point, there is need to continuously improve from these performance levels for long-term success.

If you have successfully delivered the desired results before, you must be confident that you can do it again.

Culture management is not something you can do once and then leave alone. Culture always needs to be managed relative to the results or performance you are working to achieve. Your company’s culture will not stay in alignment by itself.

There will always be constant forces threatening to push you, your team, or your organization out of alignment. As a leader, you must remain on the guard, identifying any lack of alignment and striking quickly to correct the problem.

As research has shown that most change initiatives often face resistance and fail to deliver the hoped-for results, in order to get buy-in from the entire organization, leaders need to get key people on board who will take ownership for the change process, produce enough alignment and positive momentum to keep the change effort energized and moving forward.

Additionally, leaders must be able to built a positive case for change by clearly clarifying why the culture needs changing and also why the organization needs to do it now.

They can do this by making the case for change real, applicable to the audience, simple and repeatable, convincing and making it a dialogue.

To ensure alignment around key decisions with individuals, teams or the entire organization, leaders must:

  • Get the appropriate people involved
  • Create accountability by identifying who will make the decision
  • Foster discussion to ensure that people speak up and are heard
  • Support ownership by promoting decision-making at every organizational level
  • Be consistent with the message of culture change and follow-up to check in and test for alignment.

The more effectively management teams align themselves and their entire organization around the cultural transition, the faster the organization will move toward a game-changing cultural transition.

Nothing more powerfully affects a successful cultural transition outcome than a management team fully aligned around results, the case for change, the cultural beliefs and the culture the methodology for changing culture.

Either you will manage culture or it will manage you.

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2 Replies to “Building a Culture that is Aligned”

  1. Hey Peter,

    Great article here. When it comes to risk management, the cultural alignment is led by management. It’s also important to note that policies, procedures, and training are – on their own – ineffective at ensuring compliance. Compliance comes from the attitude and environment that’s created by management in the workplace.

    I wrote an interesting article that includes 3 strategies to help manage risk culture. What are your thoughts?

  2. Hey Matthew,

    Thanks for your comment. It is true that an organization might have all the policies, procedures, training etc in place but if the culture is off, there is no tangible benefit whatsoever to the organization. Experiences are the drivers of performance. Bad experiences will always have negative implications on performance.

    I like the three points you raise in your article. The reason why we still see many organizations making blind decisions based on gut feel and not aknowledging risks presence is because of the way they view risk. Gone are the days where risk management was the police guard of the organization. Risk management is now an enabler of value creation.

    Proper acknowledgement by senior management that risks do exist is helping them identify threats to strategy formulation and execution. Ultimately, these senior managers are best positioned to make informed decisions that not only preserve corporate value, but also increase it.

    Transparency and respect for risk is shown by the way the leaders prioritise enterprise risk management. If the tone from upstairs is dull, the behaviours at the bottom will trully reflect this. If leaders only listen to their own voices and refuse advice and education on risk awareness, asessment and management from unit managers etc, results achieved will also reflect this.

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Finance Analytics: It’s Not About the Size of The Data

As the need to make impactful operational and strategic decisions in real time increases, CFOs are playing a greater role in the adoption and integration of data analytics in their organizations to support data-driven decision making.

Executives and business unit leaders are increasingly relying on insights produced by Finance to better understand enterprise performance. That is, what has happened, why it has happened, what is most likely to happen in the future, and the appropriate course of action to take.

In an era where data is proliferating in volume and variety, decision makers have realized it’s no longer enough to base key enterprise performance and risk decisions on experience and intuition alone.

Rather, this must be combined with a facts-based approach. Which means CFOs must set up modernized reporting and analytics capabilities with one of the main goals being the use of data as a tool for business decision making.

Appropriately analyzed and interpreted, data always has a story, and there’s always something to discover from it. However, many finance functions are failing to deliver value from their existing data analytics capabilities.

There is a misconception that to deliver actionable insights, the function needs more data for analysis. As a result, the supply of data keeps rising, while the ability to use it to generate informed insights lags badly.

Yet it’s not about the size of the data. It’s about translating available data and making it understandable and useful.

In other words, it’s about context and understanding that numbers alone do not tell the whole story. Finance leaders should connect the dots in ways that produce valuable insights or discoveries, and determine for example:

  • What is being measured, why, and how is it measured?
  • How extensive the exploration for such discoveries was?
  • How many additional factors were also reviewed for a correlation?

Further, to use data intelligently and influence better decision making, CFOs and their teams should recognize that most enterprise data is accumulated not to serve analytics, but as the by-product of routine tasks and activities.

Consider customer online and offline purchases data. Social media posts. Logs of customer communications for billing and other transactional purposes.

Such data is not produced for the purpose of prediction yet when analyzed, this data can reveal valuable insights that can be translated into action which delivers measurable benefits.

Often the company already has the data that it needs to answer its critical business performance questions, but little of it is being aggregated, cleaned, analyzed, and linked to decision making activities in a coherent way.

Exacerbating the issue is the mere fact that the company has a mishmash of incompatible computer systems and data formats added over the years ultimately making it difficult to perform granular analysis at a product, supplier, geographic, customer, and channel level, and many other variables.

There is nothing grand about data itself. What matters most is how you are handling the flood of data your systems are collecting daily. Yes, data can always be accumulated but as a finance leader:

  • Are you taking time to dig down into the data and observing patterns?
  • Are the observed patterns significant to altering the strategic direction of the organization?
  • Are you measuring what you really want to know, what matters for the success of the business?
  • Or you are just measuring what is easy to measure rather than what is most relevant?

CFOs do not need more data. What they need right now is the ability to aggregate, clean and analyze the existing data sitting in the company’s computer systems and understand what story it is telling them.

Before they can focus on prediction, they first need to observe what is happening and why. Bear in mind correlation does not imply causation.

Yes, you might have discovered a predictive relationship between X and Y but this does not mean one causes the other, not even indirectly.

For instance, employee training hours and sales revenue. Just because there is a high correlation between the two does not mean increase in training hours is causing a corresponding increase in sales revenue. A third variable might be driving the revenue the increase.

Jumping to conclusions too soon about causality for a correlation observed in data can lead to bad decisions and far-reaching consequences, hence finance leaders should validate whether an observed trend is real rather than misleading noise before providing any causal explanation.

Certainly, big data can be a powerful tool, but it has its limits. Not all data is created equal, or evenly valuable. There are situations where big data sets play a pivotal role, and others where small, rich data sets trump big data sets.

Before they decide to collect more data, CFOs should always remember data is comparable to an unexploited resource.

Even though data is now considered an important strategic asset for the organization, raw data is like oil that has been drilled and pulled out of the ground but not yet refined to its finer version of kerosene and gasoline.

The data oil has not yet been converted into insights that can be translated into action to cut costs, boost revenues, streamline operations, and guide the company’s strategic direction.

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Doing The Right Thing For Too Long

Markets and business models are shifting, and so should you keep up with these market changes if your business is to survive and succeed. Compared with the past, the current era of digitization represents an inflection point.

Consider individual trends such as artificial intelligence, virtual reality, Big Data, cybersecurity threats, drones, the Internet of Things, driverless cars, blockchain technologies, and more.

These new technologies have significantly changed the way we connect and interact as individuals, including how businesses deliver products and services to their customers.

Reinventing your business will determine whether you succeed or fail in the digital age. As the saying goes, disrupt or be disrupted. No company, business, or industry is safe from disruption. Today, individual businesses have the potential to compete against multinational companies and win.

These businesses are quick to anticipate market changes and flexible to get ahead of the curve. Sadly, many companies are blinded by their successes and aren’t willing to disrupt themselves. They are not experiencing their desired growth trajectory because they are stuck doing the right thing for too long.

Don’t get comfortable with the status quo and allow your business to get stuck on a strategy and mindset that no longer fit the market.

Here are a few questions to ponder, the answers to which will determine the future of your business:

  • What is at the core of your strategy?
  • Are you in touch with the customers you want to serve? When customers give you negative feedback, how often do you listen and act on it?
  • Are you operating your business on the premise that you know what is best for your customers therefore they are supposed to buy whatever product or service you offer them?
  • Are you keeping up with market shifts or you only know how to grow under one set of conditions or products and services, but not how to survive and strive under another?
  • How robust and flexible is your IT infrastructure to help you innovate, perform your company’s Jobs To Be Done, and scale your business?
  • Are you creating a strong culture that is focused on customers, including a culture that not only embraces change but seeks it out?

Given our world is changing faster, it’s imperative to continuously look for signs that things are changing and think about how those shifts would play out in the short-term, medium-term, and long-term, not forgetting the impact on the execution of your strategy and enterprise performance.

The signs can reveal individually. At times, they are part of a wider trend.

Nonetheless, how you adapt will determine whether you succeed or fail. Keep learning. Learn about innovations in your industry and beyond. Try out new business models and technologies and embrace a philosophy of constant change.

Once you understand how the market is changing and evolving, you can develop the right product or service and strategy that will help you achieve your desired outcomes.

We often talk of the ability to “connect the dots” and “take a helicopter view of the business” as key ingredients for success. But how often are business leaders and their teams doing this?

Across the organization, a culture of “them versus us” prevails. Important decisions are made at a functional level with little or no consideration of their impact at the enterprise level.

Having the ability to grasp the big picture and see how different trends intersect is essential for determining the right path or course of action to pursue.

So, how do you spot market transitions and develop a clear sense of where the market is going?

  • Be curious and hungry for new ideas. Continuously ask tons of key performance questions and pay attention to what’s around you.
  • From time to time, challenge conventional wisdom. It’s easy to stick with what you know about your business model, customers, competitors, markets, or industry but dare to pivot when conditions change.
  • Don’t be nostalgic about the past or worried about protecting what you’ve built in the present. Always be curious about the future and develop a willingness to take calculated risks.
  • Ask existing and would-be customers how they feel about your company’s products, services, and strategy. Instead of turning to sources that reinforce your existing point of view, seek multiple perspectives and cross-reference them as new facts come in.
  • Develop an ability to handle multiple random data points at once. This will help you generate critical market, customer, and business performance insights and make smarter, informed decisions. Be careful to distinguish between the signal and the noise since data can be deceiving, especially when you’re looking for “confirmation” that protects your business model.

Data might not tell you why something is happening, but it does tell you what’s going on.

  • Look for patterns and abnormalities that might suggest something is going on, including any interdependencies.
  • Anticipate all the various scenarios of what could happen.
  • Plan your course of action in response to what’s happening in real time.

As the signals of a market shift increase, the need to act becomes more imperative. Note, monitoring and identifying market shifts, and effectively taking the appropriate course of action is a matter of timing.

If you continue doing the right thing for too long and lack the boldness to disrupt both the market and your own organization, you risk being disrupted and left behind. There is no company that is too big to fail. Neither is there a startup that is too small to succeed.

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How Feasible Are Your Strategic Objectives?

Every organization sets out its goals and objectives, to accomplish its mission and vision. The two often seem like two interchangeable phrases but there is a distinction.

A goal is a desired result you want to achieve and is typically broad and vague. An objective, on the other hand, defines the specific, measurable actions each employee must take to achieve the overall goal.

It is every leader’s job to create a coherent set of feasible objectives or what Richard Rumelt calls proximate objectives. Objectives that define targets the organization is fairly expected to achieve, even overwhelm.

This is essential for ensuring energy and resources are focused on one, or a very few, critical objectives whose accomplishment will lead to a cascade of positive outcomes.

An effective strategy defines a critical challenge or opportunity and clearly articulates how the organization is going to play to win or perform customers’ Jobs to Be Done.

Thus, the objectives an effective strategy sets should stand a good chance of being accomplished, given existing resources and competence.

On the contrary, a bad strategy results in the setting of bad strategic objectives.

Long lists of “things to be done,” are often labeled wrongly as strategies or objectives. Or the desired outcome is simply rehashed with no explanation of how this will be accomplished.

It doesn’t matter how well-thought your strategy is in response to an identified challenge or opportunity. If the resultant strategic objectives are merely a list of things to do, or just as difficult to achieve as the identified key challenge, there has been little value added by the strategy.

In today’s highly competitive, uncertain, dynamic, and complex environment in which a leader’s ability to look further ahead is diminished, it is better to focus on a few pivotal items through taking strong positions, creating options, and building advantage.

First identify the key challenges or opportunities for the business. Look very closely at the changes happening within your business, where you might get an added advantage over competition.

Next, create a list of the issues, including the actions your company should take.

Then, trim the original list to a noticeably short list of pivotal issues and proximate objectives by identifying one or two feasible objective(s), when achieved, would make the biggest difference. Remember, the identified objectives should be more like tasks and less like goals.

Now, focus on the objectives by channeling skills and available resources to accomplish the overall goal.

Once accomplished, new opportunities will open up resulting in the creation of more ambitious objectives. This cycle will help you develop a system that enables the setting of feasible strategic objectives.

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