Culture eats strategy for breakfast – Part 2

Culture eats strategy for breakfast – Part 2
Recent research we conducted with life science companies shows that leaders in the life sciences believe they establish corporate culture, but they do little to document this culture in a way that lasts once they leave the room. In this issue, I reveal several other surprising insights from this research, including the finding that surprisingly few organizations have published statements of Mission, Vision and Values. Even those that do report that these are not memorable and therefore ineffective at aligning employees. I’ll review a powerful solution to the problems brought to light by this research.

Culture eats strategy for breakfast.
Mergers and acquisitions are on the rise in the life sciences, driven by high valuations of enterprise value. In the last issue I reviewed some surprising results from recent research we conducted—that leaders spend surprisingly little time planning the “cultural performance” of the merged firms.

This research also revealed that leaders don’t document their culture in a way that acts as a “North Star”—something employees can use to align their actions as a cohesive team.

I can hear some of you asking: but what about statements of mission, vision and values? Don’t they help document how employees should behave? Well, one respondent in our research addressed this very specifically.

“I don’t think the statements (of Mission, Vision and Values) necessarily impacted it (culture).”

Yes, Mission, Vision and Values should be effective tools to document culture, so that it can be shared and understood by all. But we’ve seen all too often—and as was borne out in our research—they simply don’t work that way.

Mission, Vision and Values aren’t popular (or effective).
Among the 14 respondents we spoke to, Mission, Vision and Values were not well regarded. One respondent called them “silly” and “stupid.”

“I’m working…to actually have a mission statement because it’s one of those silly, stupid things that some people like to see.”

Another dismissed them as so much meaningless noise.

“No, not really… We have it (a Mission Statement) in our presentation where we basically say that we want to be a high-quality provider of services to the pharmaceutical industry and blah blah blah.”

And one respondent called them “a waste of time.”

“No, I find those useless. It’s something you read in a book on what you should do when you start a company, but it’s not practical. You can’t stick with it. It’s a waste of time.”

The data show that few of these companies had bothered to publish anything. Only slightly more than half had a published statement of Mission or Vision, and only slightly more than one third had a published statement of Values (which is where, by the way, you’d expect to see the most evidence of a documented culture).

Figure 1. Few companies have published statements of Mission, Vision and Values.

Mission, Vision and Values are not memorable.
Among those companies that did have published statements of Mission, Vision or Values, few respondents believed their employees would be able to remember them accurately.

On a scale of 1-10, where 1 represented “Not at all well,” and 10 represented “Perfectly,” we asked how well respondents thought their employees would be able to recite their Mission, Vision and Values.

The average of all the responses was less than half.

 

Figure 2. For those few respondents whose companies actually have statements of Mission, Vision and Values, few believe their employees would be able to recite these statements with any accuracy.

If employees can’t remember your statements of Mission, Vision and Values, how could you expect them to use these statements to guide their behavior?

If you think your own statements of Mission, Vision and Values are any better, hold them up to a typical daily set of challenges. Would they offer practical guidance when dealing with a difficult co-worker, or addressing an irate customer?

The two key problems with statements of Mission, Vision and Values.
These research results reinforce the two key problems with statements of Mission, Vision and Values. First, these statements are so idealistic that they can’t guide employees’ daily actions. For example, how would an employee use “Our mission is to bring drugs to market more quickly, for the benefit of all mankind,” to guide their actions in the two example I just noted: a difficult co-worker, or an irate customer?

Second, employees don’t remember statements of Mission, Vision and Values. These statements tend to only live laminated behind glass on walls; they don’t live in employees’ hearts.

It’s unclear which is the cause and which is the result. Do employees not remember these statements, so they are not useful, or are they not useful because they can’t be remembered? Or is it something else entirely?

Interesting question, but ultimately it doesn’t matter; the result is the same. Mission, Vision and Values don’t align your employees. They are not an effective way to document culture. They don’t enable employees to share your core behaviors with one another, and they don’t help bring employees back into line when they fall out of step with communal norms.

Archetypes can help.
So what can you do to promote alignment around your organizational culture—which will have ripple effects all the way out to financial performance? Archetypes can be used to shape culture. I have written about this subject extensively, so I’ll only supply a brief summary here.

Archetypes have four key benefits.

1. Archetypes, when used properly, can align employee behavior and shape culture.
2. Archetypes, when used properly, help organizations clarify their messages and their tone of voice, leading to increased consistency.
3. Archetypes, when used properly, can help organizations differentiate.
4. Archetypes, when used properly, can drive higher profit.

Here’s a quick example of how this works in practice: Imagine that an organization chose an Athlete as their archetype and set their unique, fundamental attributes as: Team-oriented, Highly skilled, and Goal-focused, among others. If everyone in the organization had been well trained in the attributes of this customized Athlete, then it’s easy to see how the four benefits listed above could be achieved.

1. If everyone understands that team-oriented behavior is the expected norm, then it would also be expected that each employee would help their co-workers. That is, archetypes align employee behavior and shape culture.
2. If every public-facing employee, particularly those in marketing, understands the core attributes and the expected tone of voice that the customized Athlete is expected to use, then all communications will be more consistent. Archetypes help organizations clarify their messages and their tone of voice, leading to increased consistency.
3. If all public-facing messages, particularly those from sales and marketing, speak in the tone of voice of the athlete and emphasize how goal-focused, team oriented and skilled their organization is, then the organization will be seen as unique. Archetypes help organizations differentiate.
4. If the entire organization is working together—if employees are team-oriented, highly skilled, and goal-focused, then it should be no surprise that there will be higher profit.

 

Figure 3. Choosing an archetype, such as the Athlete, makes it easy for employees to understand and align around a set of customized behaviors, such as Team-oriented, Highly skilled, and Goal-focused.

You should not choose any old archetype.
As I have written elsewhere, there are many sectors in the life sciences where the dominant competitors tend to use a small set of typical archetypes associated with that particular sector. For example, instrument manufacturers tend to often speak, even inadvertently, in the tone of voice of the Scientist, the Engineer, or the Explorer. There are many other examples—too many to cover here. As well as looking inward—to ensure that your archetype springs organically from your organization’s (currently unspoken) culture, it’s important to look outward as well. Careful study must be made of your competitors, to ensure that you don’t choose an archetype that one of them is already using. Such choices are non-differentiating and undermine any competitive advantage you hope to create.

 

Figure 4. You should not choose an archetype that is commonly used by your competitors. In the life sciences, the Scientist archetype shows up so frequently that it should be avoided; it is non-differentiating and won’t help retain employees.

What will the future bring?
Our research indicates that very few organizations are deliberate in defining and maintaining culture. Leaders have not given employees a “North Star” around which they can align their behavior and guide their actions.

What does the future hold? We asked research respondents what trends they believed will be prevalent in the future. The three most often mentioned:

Outsourcing
“You can look at any of the forecasts that more and more outsourcing will be happening…”

Growth
“Increasing headcounts, both organically and through acquisition…”

More M&A
“Industry consolidation through M&A.”

What will this mean for culture?
Many respondents thought that these trends would actually put increased pressure on the culture of their companies:

“I feel like it gets harder as we grow… so we really are going to have to start trying to do some things a little more intentionally and create that culture… so it outreaches a little more.”

“I think we should recognize employees