The Intersection of Culture and Strategy

April 9, 2020

The Intersection of Culture and Strategy

Amy Cappellanti-Wolf brings more than three decades of experience to the conversation about organizational design, complex transformations and executive leadership. Before serving as the former Senior Vice President and CHRO of Symantec, she led global HR as the CHRO of Silver Spring Networks, helping in its IPO in March 2013, and held HR positions at Cisco Systems, Sun Microsystems, The Walt Disney Company and Frito-Lay. Here Cappellanti-Wolf dives deeper into culture during organizational change. 

HRPS: How did you get into HR?

Amy Cappellanti-Wolf: I studied chemistry in college but found after my first year in school, I wasn’t passionate about periodic tables so I switched to journalism. When I graduated, the economy was in a slump and jobs were hard. I applied to graduate school with a focus on industrial and labor relations where I learned organizational development, collective bargaining, rewards and compensation, etc. After graduation, I went to work for Frito-Lay in their HR Associates’ program. It was a fast-track development program and my first assignment had me working on the factory floor to get to know the business. 

HRPS: Culture is becoming more visible in places like earnings calls, stakeholder reporting and board meetings. What role is culture playing in today’s organization?

ACW: I have seen many value statements along the walls of many companies and it is my experience that words are words and are only meaningful when they are backed up by behaviors. Culture cannot stand alone and needs to be strongly connected to the business strategy. For example, if you’re an innovative company like Apple, then you have to tolerate risk and failure as part of your culture. If your stated values include excellence and getting it right the first time, you need a level of preciseness and process, which requires a different set of talent than a  “learn fast/fail fast” culture. If your culture is based on customer value, then everything you do must center around the customer. This means you need to have the talent, systems and practices to support the customer such as a strong relationship management platform, incentive programs focused on customer delight and agile development cycles that tie to customer feedback. These are just a few of the components necessary to support a culture focused on operational excellence.  

HRPS: We’ve seen reports of culture clashes causing the failure of mergers and acquisitions. What can companies do to prevent or anticipate these issues?

ACW: When I was at Cisco, much of our growth came through acquisition. We were clear from day one that the goal was to integrate fast so people knew what to expect in joining Cisco. The operating principle was to get employees integrated as quickly as possible into the culture versus delaying and risking a flurry of different behaviors that could harm the business.   I do think it is important for companies to assess the culture of the acquisition target during the due diligence process. It’s not a value judgment on which culture is better but it helps with the integration to understand what exists currently. 

Another example of culture clash occurred at Symantec. Symantec had a very collaborative and relationship-oriented  culture and suffered from being slow to make tough decisions. Through an acquisition, we purchased a smaller company and the entire management team of the acquired company stepped into the C-Suite of Symantec. The acquired company was more focused on execution, less on relationships, and relied on only a few people to make decisions. While there were benefits and cons to these two companies coming together, taking the time to understand and address the differences of these two cultures would have improved the integration and ultimately, the economics of the deal.

HRPS: Can companies change their culture to be extremely different?

ACW: Microsoft is a great example of creating real culture change resulting in better company performance. Under Steve Ballmer, the Microsoft culture was very competitive and sharp-elbowed, being the smartest person in the room and tearing down other’s ideas were the norms. When Satya Nadella was appointed CEO, he was intentional about shifting the culture to be focused on growth mindset, learning and failing fast. While not every company will need to undergo big cultural transformation such as this, often minor tweaks can be made to re-align culture and business.

When focusing on cultural shifts, leaders need to be really clear on what they’re solving for. What needs to change and why? Is there an articulated business strategy and how does the desire to change align to and support the business strategy? Do people know how they contribute to the strategy and what is expected from them in terms of performance and behavior? Forming these perspectives needs to be both a top-down and bottom-up exercise. Leadership needs to engage with the employees to understand where gaps exist and the conditions necessary for success. While I am a big user of data driven engagement surveys, taking the time to sit down with the employees helps provide greater context to the issues and opportunities at hand.

HRPS: What happens when a company only needs small changes? How can leaders keep a culture moving in the right direction?

ACW: Even small changes to culture require leaders to be purposeful in everything they do. At the end of the day, it is all about building trust and ensuring you have a strong say/do ratio. Employees want to understand what is expected of them and perhaps, more importantly, want leaders to know what they expect of them. Just like business metrics such as revenue and margins, operating expenses are monitored and accounted to, the same should be done to manage organizational health. This requires continuous listening, and dialogue, quickly knocking down barriers to success, being transparent and taking the time to share how and why decisions are made and being deliberate about who you hire and fire.

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