For years, IBM was a leader in its industry, a shining example of strong organizational culture. When things started changing, though, shifts from an emphasis on large mainframe computers, the strong culture of the organization made it slow to adapt.
That’s just one of the examples cited in the recent book, “Tales From a Reluctant CEO: Lessons for Nonprofit and Start-up Leaders,” by Maxine Harris and Michael B. O’Leary.
- For an organization’s culture to be a “performance-enhancing force,” the authors said that it should meet four tests:
- Consensus – Is there consensus about the organization’s core values, among employees, customers, and other key stakeholders?
- Internal Alignment – Is the culture internally aligned or consistent with the organization’s strategy, people and systems? How well do culture-embedding practices support them?
- External alignment – Does the culture fit with the competitive environment or landscape in terms of labor supply, customers, etc.?
- Adaptability – To what extent can the organization change culture-embedding practices as environments change?
Consensus with adaptability is the most challenging aspect of “managing culture,” especially in volatile competitive environments, the authors noted.