Both how organisational culture influences the implementation of strategy and the bidirectional relationship between the two are well documented. However, this submission seeks to shed some light on how the strategy formulation stage is moulded by culture.

There are many different definitions of organisational culture, with Ravasi & Schultz putting forward that it consists of ‘a set of shared mental assumptions that guide interpretation and action in organisations by defining appropriate behaviour for various situations,’ (2006, p.437). Strategy, for the purposes of this submission, has been defined as ‘the match an organisation makes between its internal resources and skills…and the opportunities and risks created by its external environment,’ (Hofer and Schendel, 1978, p.12). This submission will be proposing that whilst the relationship between strategy and culture can be bidirectional, the influence of culture is greater and this influence affects each and every stage of the strategy formulation process.

Firstly, the influence of culture regarding which of the strategic processes an organisation embodies will be examined. Then, a breakdown of each stage of strategy formulation process, alongside practical examples, will reinforce the power of culture. Finally, the influence of societal culture will be briefly evaluated, concluding that while it is influential, it ultimately forms an aspect of organizational culture.

Strategic Processes

There are three broad schools of thought regarding strategic processes: deliberate, emergent, and process. Essentially, organisational culture influences which of these processes an organisation can successfully embody.

Emergent

The emergent perspective views strategy as evolving to adapt to organisations ever-changing circumstances and corporate culture arguably has the greatest impact on this process. The formulation is based upon a series of informal processes/interactions, often emerging from day-to-day routines (Jonson, Scholes, and Whittington, 2010). In this process, strategy is constantly being reconfigured and redefined requiring organisational-wide collaboration (Kruger, Mazza, and Lawrence, 2007) based upon the notion that ‘strategies grow initially like weeds in a garden; they are not cultivated like tomatoes in a hothouse,’ (Mintzberg, 2018). The influence of culture is undeniable as employees are required to, not only adapt to constantly changing strategies, but also proactively seek out new opportunities and strategies. The responsibility of employees is highlighted by Clayton Christensen who stated, ‘what you have to ensure is that all of the employees are looking for new opportunities to grow’ (Stobierski, 2020). Clearly, for strategy to be formulated in this way, an organisation’s culture must align.

By referring to Johnson, Scholes, and Whittington’s (2005) cultural web, certain elements of culture can be selected to demonstrate its impact. The power structure, for example, must allow for all employees to feel comfortable approaching senior management with problems/ideas. Moreover, rigid routines should be avoided, otherwise, the organisation risks acceptance of status-quo rather than seeking new opportunities. However, culture is just one contextual factor as companies also interacts with external environmental stimuli (Parsons, 1961) meaning that industry, for example, could be influencing strategy as well. For example, many large technology companies embody the dynamic capabilities strategy (Helfat, 2013) suggesting that some environments are better suited to certain processes, henceforth influencing strategy. This, however, does not undermine culture’s influence, it merely extends the elements culture must be aligned to for successful strategy formulation to ensue. Clegg et al (2020) supports this stating that emergent strategies rely upon all three elements of culture: artefacts, expressed values, and basic underlying assumptions.

The control (hierarchy) element of Quinn and Rohrbaugh’s (1983) competing values framework illustrates a type of culture that is ill-suited to an emergent process. This culture, often stereotyped as bureaucracy, is unaligned as its key characteristics include stability, control, and standardization meaning it is slow to perceive the need for change. Evidently, organisational culture can prevent companies from employing this strategic process.

Deliberate

Another strategic process is the deliberate one, where strategy is viewed as rational, analytical being created by top management’s conscious decision-making and then cascaded through the organisation (Clegg et al., 2020). This process would be far better suited to the ‘control (hierarchy) culture previously discussed. Effectively, deliberate strategic process has been built on the premise that ‘unless structure follows strategy, inefficiency rules,’ (Chandler, 1962, p.314). However, the applicability of this process has been questioned, with Mintzberg arguing only 10-30% of intended strategy is realised in this way (Grant, 2021). Additionally, due to the inherent nature of the deliberate process, often culture only impacts strategy during the implementation stage, which is out with the realms of this submission. However, the move away from this process towards the emergent has arguably increased the influence of organisational culture during the strategy formulation stage.

Process

Finally, Andrew Pettigrew developed the process strategy which embodies elements of deliberate and emergent. Process views strategy as a way of simplifying a complex world and organizing change to follow the desired direction (Clegg et al., 2020). Central leadership controls strategy, but the content is determined by the wider organisation. The primary influence within this process is the organisation’s learning which should behave as a whole strategically (Senge, 1990) replacing predictability with preparedness. As culture is an important determinant of an organisation’s ability to learn and adapt to new circumstances (Schwartz and Rist, 2017), culture's influence is also apparent in this way of formulating strategy.

Evidently culture influences which of the strategic processes an organisation can embody, especially regarding process and emergent.

Strategy Formulation: Stage by Stage

‘By influencing strategic decision processes, organisational culture also indirectly influences the content of strategy,’ (Shrivastava, 1985, p.106). As strategic decision-making often tackles novel problems requiring thorough environmental analysis and interpretation, it is difficult to base decisions purely on rationality. In smaller organizations especially, strategy can be heavily influenced by the personality, characteristics, subjective attitudes, and motivations of those decision-makers (Wang, Walker and Redmond, 2007). Johnson, Scholes, and Whittington’s (2005) cultural web, among other elements of culture, will be used to illustrate corporate culture’s impact during every stage of strategy formulation. Admittedly, not every organisation consciously follows these four distinct steps, however, each stage will be considered to some extent. By whom and in what way is decided by the previously discussed strategic processes.

1. Formulation of the Problem

Firstly, problem formulation can be affected by stories. During problem identification, managers generally start by informally and indirectly scanning for more information on issues their intuition registers as a problem (Lyles and Mitroff, 1980). Both their intuition and the information they receive are influenced by the culture as often ‘myths provide a convenient and abundant source of information in ill-structured situations’ (Shrivastava, 2007, p.106). The following example contextualises this. A company developed a computerised management information system due to a dominant myth that their computer systems were a panacea for all their problems. This led to the wrongful formulation of the problem and the subsequent preclusion of other solution alternatives (Shrivastava, 2007). Therefore, the preconceptions of those formulating problems, the information they gather through social interactions, and the underlying, unquestioned organisational myths all influence the problem formulation stage, reiterating the influence of culture on strategy.

Additionally, power and organisational structure cement culture's influence further. If employees do not feel comfortable sharing problems they have identified due to the power structure within the organisation, this will limit the formulation stage. Knowledge sharing is an essential attribute within the problem formulation stage and prospers with structures that support ease of information flows. (Syed-Ikhsan and Rowland, 2004). Although one could argue that this is organisational structure influencing strategy, structure is often considered an aspect of culture (Johnson, Scholes, and Whittington’s (2005), henceforth solidifying culture's sway. A practical example that illustrates this is Facit Inc, where the refusal of managers to recognise the potential of electronic calculator technology led the organisation to incur huge losses. This oversight stemmed from an organisational myth regarding the invulnerability of their product. However, this was intensified by their hiring from within the structure which reinforced this myth. Evidently the organisational culture is a dominant influence during the problem-identification stage of strategy formulation.

2. Generating Solution Alternatives

The language systems and metaphors often used by the organisation shape decision alternatives. The commonly utilized business as war metaphor is a good example, as by continually boxing strategy into this metaphor, it guides the creation and selection of strategic alternatives (Boulding, 1976). It is unlikely an employee viewing business as war would ever suggest a non-competitive strategic alternative, however, Alex Smith's ‘you win when you refuse to compete’ is a valid and potentially successful strategic option (Smith, 2019). Moreover, looking at the bigger picture, the organisation should utilise this stage to exploit the available opportunities that will improve the alignment between strategy and culture (Pearce and Robinson, 1991). Regardless of whether it is culture influencing strategy or vice versa, alignment between the two is imperative, as culture can either be the greatest contribution or obstacle to a successful strategy.

3. Strategic Response

Rituals and routines can influence the strategic response as standard operating procedures typically generate automatic responses that promote inflexibility, solidified by years of unquestioning acceptance (Starbuck, 1983). For example, within large multinational banks, it was found that their well-established procedures for strategic development had trapped them in a loop of formulating and circulating strategy, which, then became obsolete prior to implementation (Bresser and Bishop, 1983). Routines help to cement the mindset ‘we’ve always done it this way’ (Thomas, 2017) which has been described as the most damaging phrase in business. This underpins a form of harmful corporate culture, which is intensified by routines, as static companies rarely sustain success (Zimmerman, 2019). Undoubtedly, this type of culture is going to adversely affect the organisation’s strategy, regardless of how genius the strategy is.

Additionally, the basic underlying assumptions held by an organisation can also influence its strategic response. The News of the World, for example, held the belief that journalism was about generating scoops on sensationalised news. This belief was so deeply entrenched that to achieve this many journalists partook in illegal activities, although within the organisation they were widely accepted as normal (Waterson, 2021). To solidify the fact this was culture influencing them rather than an external force, The Times, another newspaper, owned by the same parent company, operating in the same industry and country, did not partake in such crimes (Clegg et al., 2020). This example perfectly demonstrates how differences in organisational culture alone, can sway which strategic options are considered available by an organisation.

4. Strategy Selection

Finally, the strategic selection stage is influenced by the organisation’s value systems, among other elements of culture. It is generally believed that the adoption of a firm’s strategy is highly dependent upon which type of culture it has (Wong et al., 2013). Whether the ultimate decision is being made by a single top manager, a strategic team, or more broadly within the organisation, strategy is inherently subjective meaning people rely upon their judgment, intuition, and experience to varying extents. Despite a vast range of tools to aid managers' decision-making existing, ‘it is far too easy to fall prey to our biases and focus on a limited set of self-serving analogies that support our preconceived notions,’ (Courtney, Lovallo and Clarke, 2013). Clearly, when adopting strategy there is an underlying rationale that different firms interpret pressures based on their unique set of organisational characteristics (Deshpande, Farley & Webster, 1993).

Ultimately, organisational culture influences the problems the strategy is aiming to solve, the solutions generated, the strategic response, and the strategy selection. This, among other reasons, is why it is commonly believed that organisational culture positively links to both performance and competitive advantage (Klimas, 2016).

Strategic Options Available

Generally, which strategic options are unsuitable due to the organisation’s culture is something that should be considered in the formulation process. However, due to oversights, sometimes misaligned cultures and strategies are only noticed during implementation. This does not, however, change the fact that cultural alignment is a crucial consideration within strategy formulation. Where these two parallels are mismatched, alignment can result from changes to strategy or culture (Montanari, Morgan & Bracker, 1990). The adverse effect of misalignment is demonstrated by Texas Instruments where their ‘culture was not sufficiently Tough Guy/Macho. Indeed, with a history of obtaining the lion’s share of its business from relatively safe-bet defense contracts, TI’s culture had evolved into basically the Process type’ (Deshpande and Parasuraman, 1986, p34). Clearly even a successful organisation opting for a strategy without first assessing the compatibility of its culture can lead to failure.

Whilst organisations do have the option to change the culture to suit strategy, culture ‘is hard, if not impossible, to engineer,’ (Clegg et al., 2020). Having said this, this example illustrates a success story (Chatterjee, 2016): Johnston & Johnston adopted a diversification strategy moving from basic consumer products into high-tech products. A quote from their Chairman, James E Burke, shows him reshaping their organisational culture stating ‘one of the things we insist on here is that everybody understands part of their job is to fail. You don’t move forward unless you make mistakes,’ (Deshpande and Parasuraman, 1986, p34). Clearly the relationship between culture and strategy is bidirectional with strategy also having the power to influence culture. Overall though, the fact culture required adaption for the strategy to be successful illustrates the power of culture's influence.

Organisational Culture or Societal Culture?

However, it is important to remember that organisational culture is not the only influential force impacting strategy formulation. Societal culture also has a great impact, with Jaeger and Balgia (1985) increasing the awareness surrounding societal culture's relationship with strategic planning and decisions. More specifically, Faucheux (1977) gives an example arguing that the development of companies within the Latin culture is based upon metaphors from the Catholic church and hence a very centralised, top-down policy-making structure. Whereas Anglo-Saxon organisations follow a more operational approach based on the existence of consensus and decentralised responsibility. Effectively, this is demonstrating how societal culture can impact the processes and structures within organisations, which subsequently influence strategy. Having said this, corporate culture tends to incorporate the societal culture of the continent/country or cities the company is based within naturally. Henceforth this may not be a reason organisational culture is less influential, but merely explains where elements of the corporate culture stem from.

Conclusion

Overall, the influence culture has on strategy formulation is undeniable. An organisation’s culture influences which of the strategic processes can be adopted, each and every stage of strategic formulation process, and even which strategic alternatives are feasible for an organisation. Admittedly, the relationship is bidirectional, and on occasion, culture requires adaptation to suit strategy, however, this submission argues that this only reinforces organisational culture’s power.

For these reasons, this submission adopts the view of Peter Drucker, that even during the strategy formulation stage: ‘culture eats strategy for breakfast,’ (Guley and Reznik, 2019).

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A New Era: Living with Technological Advancements 

Digital transformation is no longer an option – it is a necessity, especially for global companies. Due to the new digital age, business leaders can reevaluate their current processes and implement more virtual and digital methods across their operations. 

The most recent digital transformation, which most of us went through together, is transitioning into a remote workspace. However, businesses use digital means daily, from design thinking to analyse and optimise the customer journey, to automating employee performance management.  

However, the digital world is evolving and constantly improving and changing. We have all read about the predictions about trends and technologies – holograms, robotics, and flying cars. Never say never; they can happen! Once upon a time, self-drive cars were a prediction! Anyone paying attention to these predictions would have heard ‘Web3’ and ‘the metaverse.’ 

Web3 refers to the decentralised, token-based solution where data lives on blockchains, rather than machines, and users have more control over that data. Kristin Houser at Freethink puts it eloquently as: ‘what this means in practical terms is that, instead of spending all our time on websites (Facebook, Google, etc.) that own and monetise the content and data we create, we’ll use social networks, search engines, and other apps that use blockchains to let us control that data.’ 

The Metaverse is a trending topic, thanks to Facebook. The metaverse uses the internet as a virtual universe that is facilitated by the use of virtual reality and augmented reality headsets: it is a 3D world focused on social connection.  

Therefore, digital transformation is never-ending – it is continuous, and businesses will need the follow the trends and adapt. However, People Management (UK HR media brand) argues that digital transformation is about people rather than anything else. People Management shared an interesting article, ‘Why Digital Transformation is about People,’ and we agree. Here’s why: 

‘Digital is about using systems to collect information on your operations and your customers’ behaviour, and using it to make your products and services better, faster, cheaper, and more sustainable. But the digital part is only ever a means to an end.’ 

We would also extend their definition to employees, as business leaders use automated and data-driven HR processes. However, although we are in the digital era, many organisations fail at digital transformation. In a McKinsey survey, the digital transformation success rate was less than 30%. Thus, 70% are failing – that is a striking number. The lack of communication in the definition of digital transformation leads to ambiguous strategic decisions, which may lead to failures.  

People Management has said that the essential principles to follow for a successful transformation are: 

• Be customer-focused: We agree, but we will add that organisations should also people-focused. Customer and employee feedback will help organisations to improve. 
• Be data-driven and cross-functional: collect information to analyse, not for the sake of having data. 
• Work in short delivery cycles: the strength of digital can release fast and get feedback data in real-time. 
• Start small and scalable: Do not go in with everything you have; you must know what works well for your business.  

If you stick to these values, during a digital transformation, the transition will be smoother. However, Masters in Minds can help with that. We can help you ensure effective change management is embedded into your structure, culture, projects, and roles. By changing not just what you do, but how you think. We’ll give you the mindset, technological tools, and capability to meet your goals, change behaviours, and lay the right foundations for the future. 

Click here for the People Management article. 

The Evolution of Customer Experience: What is your customer experience like at the moment? 

Does it feel great, just good or leave you underwhelmed or worse, upset, annoyed and frustrated? 

Has it got better? 

Do you feel like you receive a ‘joined-up’ service? Or are you passed around? 

Does the NPS – C-Sat invitation inspire you or leave you cold? 

Does it feel personal to you? 

Does it feel like things have gone backwards? 

At MiM we often feel it’s not great, and in some cases, going backwards. We experience frustrations with wait times, standard COVID resourcing messages, slow processes that are not linked together and the continual need to provide the same information.  

McKinsey in their ‘The State of Customer Care in 2022’ research concluded: 

“Customer care leaders are facing a perfect storm of challenges…” 

Now ‘customer care’ is often used as the main component driving the ‘customer experience.’ In our view, the experience should be seen as related to both single events and patterns created by a series of interactions – across all channels and interaction points offered and used at all stages of a relationship, from an initial buyer to a long-term customer or partner. 

One of the biggest challenges that businesses face is getting to grips with their customer experience.  The experience of buying products is as key as service or care contacts. Similarly, customer experience is not just the preserve of the ‘experience team’ or people in ‘sales and service.’ It should be a strategic focus across the whole business – from the C-suite to the front line. 

Now…back to the storm. 

Volumes of contacts and interactions are increasing. Digital solutions are often not yet delivered. Skilled staff are more mobile and harder to replace; adding all this to the rising expectations, surging inflation, and cost pressure, makes a storm indeed.  

We see progress and solutions beginning at the top of the organisation, informed by the front-line colleagues who experience everyday challenges. 

Having executive alignment around strategy, objectives, actions and measures through to intentionally building the right culture and exhibiting the right behaviours to motivate, enthuse, and build trust – all are essential.  

Your strategy and plans should be comprehensive and be based on a clear understanding of what ‘customer experience’ actually is made up of and what you want it to be. Simplify where needed, apply skill and capability at the right times and link your customer’s experience to your people. 

You will need to invest in your technology and processes, due to continuous digital advancements. In parallel, you will be investing in your people, in their management, skills and capabilities, removing constraints and silo’s they often try to deliver through.  

Your spending needs to be smart to achieve its return. You will need to set matched and aligned KPIs and measures across marketing, sales, service and operations – it is an end-to-end requirement.  

You will need to communicate as adeptly inside your business as outside, and expertly in each interaction. You will be focusing as much on the emotional impact and empathy outcomes as meeting initial needs. 

As a reminder – Why are we doing this? 

• Your customers –  Salesforce published that 80% of customers now point to customer experience as a key differentiator and 67% have higher standards than ever before.  

• According to Deloittes, spending can increase by up to 140% after a positive experience and care costs can reduce by 33%. 
• Brands that scored in the top 25% in terms of employee engagement scored 10% higher on customer metrics. (Forbes)  

• Your competition – According to CX Index, 34% of companies surveyed had motivating and building trust with employees as a primary strategic target and 44% were increasing budgets for customer experience initiatives. 

• All CEO surveys show a continued focus on growth, digital and technology but a sharply rising priority around workforce, diversity and sustainability – reflecting your customer’s views. 

You may be facing challenges at the moment, related to growth, performance, integration, change or leadership. Those challenges may be based on capability or process, or may be reflected in culture and mindset.  

Our starting point is you and your business. We invest time in talking to you. Once we understand the nature of your challenges and the opportunities that you have, we can help. 

We build from within, not apply from outside. Creating method, rhythm and rigour within change. Developing and enhancing from a baseline that is yours and yours alone. Changing mindsets, behaviours, capabilities, processes, interactions and, importantly … outcomes. 

We may agree to be a sounding board for ideas and approaches. We could be expert advisors, facilitators, trainers, coaches or change partners. 

We never forget that it is fundamentally about you and your customers, creating results and continually improving. 

Transform your Customers and People’s Experience with Masters in Minds. You know what to do if you want to discuss! 

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Quiet quitting was a phenomenon in 2022, mostly used by Gen Z workers who have helped the term go viral on TikTok. The hashtag #quietquitting has amassed over 17 million views on TikTok. Press articles have shared the term, which spread the noise to other social media outlets like Linkedin.

However, the term has always been around. But it was previously known as ‘jobsworth‘ and ‘working to rule.’ The trend has always been around. However, quiet quitting has different definitions:

• Following your job description to every literal word and not going beyond the duties set.
• Literally quitting your job without fulfilling the notice period or notifying the employer.
• Doing the minimum requirements of one’s job and putting in no more time, effort, or enthusiasm than absolutely necessary.

However, the trending definition for quiet quitting is employees limiting their tasks to those strictly within their job description to avoid long hours and tired work life. Employers quietly quit by literally doing their job and nothing more – mainly to set clear boundaries to improve work-life balance. They stick to their job description and leave work behind once their shift has finished. But why was quiet quitting trending all of a sudden?

Quiet quitting is a way of dealing with burnout, an organisational behaviour expert told GQ Magazine, which is a major concern for Gen Z. A survey of 30,000 workers by Microsoft showed that 54% of Gen Z workers are considering quitting their job due to burnout. So, it is understandable why the term is so popular with the younger generation.

However, as with anything, there has been criticism of the term. Michael Timmes, Senior Human Resource Specialist, stated that: ‘From an office perspective, quiet quitting can cause conflicts between employees, as some employees will feel others aren’t carrying their weight.’

Kevin O’Leary, an investor, has said that quiet quitting is ‘a really bad idea as people that go beyond to try to solve problems for the organisation, their teams, their managers, their bosses, those are the ones that succeed in life.’

However, some may agree that quiet quitting is a good idea. Kelsey Wat, a career coach, argues that, ‘at the end of the day, quiet quitting is about combatting the long-held belief that the only way to get ahead professionally is to work far beyond your limits and to take on a ‘yes man’ mentality.’

It’s difficult to form an opinion on quiet quitting as it depends on your work environment and, possibly, the generation you were born in.

What are your thoughts on quiet quitting?  Share your thoughts!

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