A Two-Way Street: How Can Culture And Strategy Inform Each Other?

Time to Read: 5.6 minutes

Updated: August 2, 2023

Two of the most important parts of any business are strategy and company culture. But these two aspects shouldn’t operate separately, in fact they can’t operate separately. Your business strategy needs to be aligned with your workforce’s skills, capabilities, and processes to be achievable, and the values that define your culture need to align with your business’ goals like creating great products, services, innovation, reaching new markets and growing.

Why Should Your Business Strategy Interact with Your Culture?

It’s tempting to split the two, senior leadership will focus on strategy and big picture thinking, leaving culture to HR to manage. However, if your HR aren’t informed on your wider business culture then they won’t be able to shape a culture that actively supports your business goals. A company culture that is aligned with your business strategy can:

  • Create great products and services designed to meet the needs of your customers
  • Be more productive, collaborative and positive
  • Improve your bottom line
  • Attract great people to your open roles who are a cultural fit and inspired by your mission
  • Retain great people who are as committed as you are to business success

How Can Company Culture Support Your Business Strategy?

Culture serves as the underlying framework that shapes the attitudes, behaviors, and norms of employees, influencing how they interact with one another, approach their work, and contribute to the organization’s goals. Gary Vaynerchuk defines company culture as “… the backbone of any successful organization.” Just as a backbone provides structure, stability, and support to the human body, company culture plays a similar role within an organization.

When managed and developed in a considered and thoughtful way your organizational culture can yield numerous benefits and support your overall strategy in many ways, such as:

  • Stimulating employee engagement
  • Fostering a shared sense of unity
  • Managing and even defining risk appetite
  • Building resilience
  • Emphasizing values and integrity
  • Delivering consistency and quality

4 Ways Your Business Strategy Can Influence Your Company Culture

And the influence runs the other way as well. Your business goals, both short and long term, should influence the way your culture grows and develops over time. A company whose overall strategy is designed to facilitate rapid growth, for example, will naturally prioritize agility, adaptability, and innovation within its culture.

Whereas a strategy focused on operational efficiency and cost reduction will prioritize a culture of accountability, attention to detail, and a commitment to maximizing productivity. Strategy influences culture through:

1. Shared Goals and Objectives

A well-defined business strategy helps establish clear goals and objectives for the organization. When these goals are effectively communicated and understood throughout the company, they create a sense of purpose and direction. This shared vision promotes a culture of alignment, where employees work together towards common objectives, fostering a collaborative and unified culture.

2. Values and Priorities

Business strategies are often built on specific values and priorities that guide decision-making and actions within the organization. For example, if innovation and creativity are core elements of the strategy, the company culture may emphasize experimentation, risk-taking, and a willingness to challenge the status quo. Conversely, if customer service excellence is a strategic priority, the company culture may focus on customer-centricity, empathy, and responsiveness.

3. Leadership and Communication

A company’s business strategy is typically shaped and communicated by its leaders. The way leaders articulate and reinforce the strategy can significantly impact company culture. Transparent and consistent communication about the strategy, including its rationale, progress, and milestones, fosters a culture of trust, transparency, and engagement.

Effective leadership that embodies the values and principles of the strategy can inspire and motivate employees, shaping the desired culture.

4. Performance and Recognition

Performance metrics and targets can influence company culture by driving behaviors and shaping how employees are recognized and rewarded. For example, if a strategy emphasizes innovation, a culture of risk-taking and learning from failure may be encouraged, where employees are recognized for their creativity and experimentation.

On the other hand, if the strategy prioritizes operational efficiency, a culture of continuous improvement and productivity may be fostered, where employees are rewarded for streamlining processes and optimizing outcomes.

What Does ‘Good’ Look Like for Companies Who Have Connected their Business Strategy to their Company Culture?

While every leader will want to proudly say they’ve aligned their company culture with their business strategy, it really stands out when it is done well.

Microsoft, for example, have famously and successfully connected strategy with culture for inspiration and insight into best practice.

For 34 years Microsoft’s business strategy was summed up by its uncompromising vision statement, ‘a computer on every desk.’ That famous goal first articulated by Bill Gates in the 1980s was part of the company’s staggering success and went a long way towards making it the most powerful and well-known technology brand in the world. However, by the 2010’s Microsoft’s position as the number one name in software was slipping. It was rapidly losing ground to more agile, innovative competitors.

To address this the company needed to update its purpose and transform its combative, competitive culture and it did so with remarkable results. From 2014 Microsoft’s vision statement became to ‘empower every person and every organization on the planet to achieve more.’

This shift represented a fundamental change in focus, from merely placing a computer on every desk to addressing unmet and unarticulated needs of individuals and organizations around the globe. A key aspect of the cultural reinvention was the transition from a culture rooted in market domination to one driven by empathy and a growth mindset. This alignment of purpose and culture became a catalyst for Microsoft’s transformation.

Microsoft recognized the importance of fostering an open and collaborative culture that embraced diverse perspectives and welcomed learning from both successes and failures. With a more open and inclusive environment, employees felt empowered to share ideas, challenge traditional norms, and collaborate across departments. This cultural connectivity enhanced agility, accelerated decision-making, and fostered a sense of shared purpose and passion among employees.

Through the connected culture and purposeful growth, Microsoft successfully revitalized its position in the market. By aligning its culture with the company’s purpose, Microsoft not only regained its innovative spirit but also created a more inclusive and customer-centric organization.

The interconnection between company culture and purpose is a transformative force that can drive organizational success. Microsoft’s journey exemplifies the power of aligning culture with purpose, illustrating the significance of connected culture in propelling organizations forward, fostering resilience, inspiring employees, and achieving meaningful outcomes.

Recognizing and nurturing the link between culture and purpose can unleash the full potential of your organization, guiding it towards sustained growth, adaptability, and positive impact in an ever-evolving business landscape.

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Alyssa Thach

Alyssa is the Co-Founder and CEO of Pierpoint. She plays a key role in the continued growth and overall business strategy. Her people-first approach builds loyalty, resulting in 94% client retention for Pierpoint. During her 20+ years in recruitment, Alyssa delivered talent solutions that increased revenue growth for Fortune 500 companies worldwide. She is an ambassador for EDI with a passion for helping businesses and people reach their full potential.

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