By Professor Dan Denison
The challenge in many companies is to bridge the disconnect between values and what is actually happening on an everyday operational level.
Culture builds up over time from the lessons that any organization learns from its survival. Undoing those lessons means rethinking the learning process and re-emphasizing the lessons – both in terms of the big values and the concrete actions on the ground – that support innovation.
Recent research has focused on the characteristics of culture that have had the biggest impact on innovation. Amongst other things, what counts are a strong sense of mission, a keen sense of what is happening in the marketplace and the ability to translate the demands of the business environment into action. It goes without saying that none of these work in isolation from the other – a great idea will only ever be a great idea in the marketplace if there is no demand for it.
While innovation is often thought of as being creativity and flexibility, the research also clearly demonstrates that having the innovative idea, as well as being able to deliver it in a way that is consistent with the overall mission of the corporation, are both equally important.
Equally important to the innovation process is having a mission that is rooted in the culture of the organization.
One percent inspiration, 99 percent perspiration
At the end of the day, as with so many things, the crunch comes with people, not strategy. A big part of the challenge is connecting this link so that the strategy at the top is the practice all the way through. And that work is never really done.
In order to grow, any organization has to have strengths and external focus, a clear mission and a vital sense of adaptability. Internal focus, involvement and consistency bring strong operating performance and employee satisfaction. Stable organizations bring predictable, reliable, stable performance over time, and strong performance. Equally, the culture of a firm is an important predictor of the financial value of the firm.
In the words of Jack Walsh, “When push comes to shove, culture eats strategy for lunch!”. It is the established culture that enables the implementation of new ideas that ultimately impact the bottom line. The market does not pay returns to unimplemented strategies.