The 2020 Mid-Year Economic Update_long

Focus on Business Problems to Fix Culture

HBR: Cultural change occurs only after tackling business challenges.
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Leaders with underperforming companies might think fixing the culture will spark a turnaround, but cultural transformation occurs only by addressing the underlying business problems first, according to a recent Harvard Business Review article, Culture is Not the Culprit.

"All eyes are on culture as the cause and the cure," according to the article's authors, Jay W. Lorsch and Emily McTague. But interviews with Ecolab CEO Doug Baker, Delta CEO Richard Anderson, former Ford CEO Alan Mulally and former Novartis CEO Dan Vasella show that pulling the right levers to address a business challenge – such as remedying communication gaps or unifying departmental siloes – will eventually take care of culture.

In other words, "culture isn’t something you 'fix.'"

"Rather, in their experience, cultural change is what you get after you’ve put new processes or structures in place to tackle tough business challenges like reworking an outdated strategy or business model," the article says. "The culture evolves as you do that important work."

Do you worry about the culture at your company? Do you think "fixing" it will solve other problems, such as tepid sales or meager margins?

Don't try to fix it. Instead, take the lead of CEOs who have faced the fire and focus on the things you can fix – better processes, competitive compensation, effective management structure and other processes. Once those are solved, the culture will follow suit.

"Culture isn’t a final destination," according to the article. "It morphs right along with the company’s competitive environment and objectives."

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