Culture Drives Strategic Execution

Strategy is fundamental to the success of your credit union, and your leadership and board must continually focus on it. Yet, it’s your credit union’s organizational culture that enables your strategy to succeed. Culture and strategy are so intertwined that it’s fair to say they are on opposite sides of the same coin, and that leadership’s primary job is to manage the culture.

The behaviors defining a culture have their foundation in organizational norms. Norms are the conscious and unconscious guidelines and unspoken rules that powerfully influence the thoughts, emotions and conduct of your employees. Over time, the “how we get things done” can arise purposefully through leadership’s thoughtful resolve to manage the organization’s strategic communication, shared learning and employee experiences based on organizational values. Unfortunately, habits and behaviors can also enter the fabric of the culture in essentially random processes through employee interactions that occur without leadership’s direction or knowledge. These norms, which are unintentionally formed, may be counter to organizational values and inhibit senior management’s goals to advance the business.

It is not easy for managers to understand and influence the underlying organizational norms, since these powerful drivers of culture are generally unstated and often unconscious. We can see behaviors, but the forces that cause various behaviors are rarely visible. Still, norms go to the heart of what happens in a culture. They are the structures and rules that guide and influence employee conduct.

Leadership must come to understand this dynamic. The most effective leaders have an exceptional ability to appreciate the workings of culture and change it when the situation demands. Often a third party can effectively help management analyze the situation and discern the norms that underpin behaviors. A thorough, high-quality organizational analysis will provide information about the organizational norms, perceived values and organizational culture. An outside advisor stands uniquely positioned to gather data impartially through observation, and confidential personal interviews and questionnaires, which can be shared with the leadership team to guide next steps for moving a culture forward to strengthen the successful execution of strategy based upon organizational values.

This is quite important, as a recent Gallup survey reported only 27% of employees strongly agree that they believe in their company’s values. Even fewer, 23%, strongly agree they can apply their organization’s values to their everyday work.

In this environment, the dominant narrative must make mission, vision and values front and center in the minds of employees. Strategic communication imparts much more than data about business strategy. Effective leaders regularly signal the organizational values they know must shape the cultural norms. They strategically communicate normative value-based behavior through their language and actions, through common organizational practices and “rituals,” through the types and frequency of acknowledgement, and by monetary and non-monetary rewards. Continual reinforcement occurs when management at all levels follows senior leadership’s example. Over time, explicitly communicated values and the resulting norms defining acceptable behavior become unconscious second-nature habits, which are incorporated into the organization’s DNA.

This intentional commitment to values, and the healthy culture that results, is a boon to employee engagement and productivity. People see the personal successes that result from their efforts and overall organizational accomplishment. Employees feel good about their work and their relationships with their colleagues. People want to remain with such an organization, and turnover decreases. The culture becomes an attractor for talent. In reality, when prospective employees say they are “following their gut” in deciding whether a place is a fit, they are gauging the culture and intuiting how people employed there feel about the organization.

The onboarding process further helps people learn the norms and values affecting how they will act within the organization. This is another area demanding attention for most organizations. Gallup data show that only 12% of employees strongly agree their organization does a great job onboarding new employees, and ineffective onboarding can lead to short-termism and turnover with new hires. For new employees, effective onboarding serves to establish the common language, common practice and understanding of shared experience that accumulates around value-based norms.

Norms work at the most powerful level of human process – the emotional level. Leadership’s communication, actions and examples all serve to engage employees emotionally as well as intellectually. Employees take notice when leaders share their authentic stories describing successes resulting from values-based action. It resonates with employees when leaders articulate and celebrate how faithfulness to such healthy norms creates a zone of productive conduct, and value-based employee engagement will propel your strategy’s success.

Stuart R. Levine is Chairman and CEO of Stuart Levine & Associates LLC and EduLeader LLC. He can be reached at 516-465-0800 or slevine@stuartlevine.com.