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Culture, Strategy and Transition

All aboard the ‘Change Express’ 

We recently had the good fortune to work with a very forward-thinking CEO of a small IT software firm that was about five years into its life and had just secured a new investor. Strategically he was about to embark on a path of significant and fast expansion. In contemplating the next few years of growth, it was not the strategy itself that concerned him but his people and the change in culture that would be required. His feeling of unease centred around three key areas. 

The first was that the start-up culture, that had served the company well in its first five years, would need to change significantly. This would be driven by the larger, more sophisticated and more demanding customers targeted by the new, enlarged organisation. 

The second area of unease was that, while he understood very clearly that a ‘new culture’ was essential, he did not know what type of new hires he required to make the change happen or how to identify them. 

The final concern was how well would the original staff fit with the new, more formalised approach as they moved from a buzzy, start-up technology and product focus to a more rigorous customer, quality and delivery one.  

The challenge of all three concerns would be compounded by the increase in staff numbers which would more than triple over the next two to three years. 

Perfect People Ltd worked with the CEO on all three challenges outlined above but for this article we focus on the key issue of culture and change.  

Mind the Cultural Gap

A cultural audit was carried out that sort to discover three things. First, what culture did the board see as being ‘ideal’ for the future positioning of the company? Second, what culture did the board believe the company currently had? Third, what was the actual culture that existed – as distinct from what the leadership thought it was?   

It will come as no surprise to you that the cultural audit identified critical challenges for the leadership, however it also surfaced a major insight.

There was no problem with their identification of the end state of a more rigorous, customer focused entity and the new, companywide, attitudes and attributes desired.  The key insight (and challenge) was that the boards view of the current culture was markedly different from the actual culture as perceived and lived daily by the staff. The board had an idealised view of the culture they believed they had created as leaders. – the well-known ‘rose tinted glasses’ syndrome. When the audit was carried out at the functional, management level a different ‘operating’ culture was evident.  

Using the analogy of a mountain, the board’s desired, future culture was the new peak they wanted to attain. The board believed that the current culture placed the company halfway up the mountain. However, the cultural audit undertaken with the staff identified that the actual culture was still on the lower slopes having fun at base camp! 

Journey’s end….?

Had the company embarked on its new strategy based on the leadership’s belief they were already halfway up the mountain its chances of failure would have been high. Not because the strategy was wrong, or the existing staff were unwilling but simply because the relative starting points for staff and leaders were different, both perceptually and in reality. 

And just for fun: 

  • • Which of the three cultures identified would you seek the right attitudes and attributes for new hires to ‘fit’?  
  • • When hiring for one culture how would you manage the tensions created by ‘miss-fit’ with the other two?    

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