The critical questions facing organisations: And why culture is the answer

Dec 16, 2020

by Bruce Hedley Director

Email +44 (0)7525 298436

by Emily Coughlan Manager

Email +44 (0)7808 796759

by Julia Guo Consultant

Email +44 (0)7730 599364

At PwC, we define an organisation’s culture as ‘self-sustaining patterns of behaving, feeling, thinking, and believing’. Put more simply, it is the answer to “how do we do things around here?”.

And given the impact of COVID-19, that is an answer that is just as important as other critical questions for businesses, such as “how will our business compete?” (your strategy) and “how will our business operate?” (your operating model).

But just as no complex business has one singular strategy or operating model, no business has a single simple culture either. Strategies shift in response to forces in society and markets. Operating models are constantly disrupted and improved to keep up with emerging technology and changing customer expectations. Similarly, organisational cultures need to evolve in harmony with strategies and operating models to provide the appropriate environment and energy for the overall success of the organisation.

This agility of organisational culture and alignment to strategy has become particularly important in the current climate where change is constant. Companies must take a hard look at their culture to determine whether it is helping or hindering strategy execution. If it's hindering, it may be time to look at an "evolution," which can be achieved by focusing on a few critical behaviours.

A 2018 Global Culture Survey, conducted by the Katzenbach Centre, asked 2,000 organisations across more than 50 countries and a wide variety of industries whether they believed their organisation’s culture needed to change significantly for their company to meet its goals. A phenomenal 80% agreed.

One of PwC’s clients overcame severe financial distress by addressing its culture. A global automotive manufacturer, it was plagued by a slow and extremely risk-averse culture. Its interim CEO presumed he wouldn't be there long enough to adequately “fix” the culture. So instead, we worked with his senior board and collaboratively came up with three key behaviours to improve the company’s performance.

  1. Understanding which cultural traits required attention was established through small focus-group discussions held by senior executives with “Authentic Informal Leaders” - those employees within the business who exert significant influence on their surrounding network spreading a critical few behaviours from the bottom up.
  2. Quick and significant decisions were made by the senior team, such as cancelling a product line expansion, but this time in a matter of weeks not years.
  3. Employees were put in direct contact with their customers more often to help employees gain greater meaning and motivation from their work.

Ultimately, the effort resulted in faster decision-making, increased accountability, and improved customer and product focus - all of which culminated in what is considered one of the greatest five-year turnaround stories in automotive history.

The good news is that all organisations can learn from this example. Target a few critical behaviours to energise your culture and this will help move your business and strategy forward. With remote working becoming far more common as a result of this global pandemic, it is also important for organisations to focus on engaging people in the process of rebuilding and revitalising their culture, while ensuring it is aligned to their operating model and strategy.

This blog post is the first in a Katzenbach Culture Series where we will be detailing the key triggers for organisations to improve their culture in line with their strategy. To discuss how PwC can help your organisation get in touch via the contact details below.

by Bruce Hedley Director

Email +44 (0)7525 298436

by Emily Coughlan Manager

Email +44 (0)7808 796759

by Julia Guo Consultant

Email +44 (0)7730 599364