strategy and culture - stanford university

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Strategy and Culture

Jeff Colvin

Objectives—Strategy and Culture

Describe four core types of organizational

culture

Understand the effects of culture on your

ability to execute strategy

Demonstrate an application of culture and

strategy alignment – ―Deep Dive‖

Identify the core culture of your organization

and the opportunities and challenges

associated with your culture

Copyright © 2010 IP Solutions, LLC

www.ipslearning.com

The organization’s

culture can make

or break your

attempts to

achieve your goals

and convert

strategy into

action.

Implement

Strategy

Str

uctu

re

Cu

ltu

reOperations

Stanford Advanced Project Management “bridge”

The world of project management has changed

To

Schedule

Cost

Scope

“Get it done!”

Project Execution

“Get the right results!”

Strategy Execution

From

Strategy review…

―Strategy is about adding

value through a mix of

activities different from

those used by

competitors.‖*

Strategy is HOW the

organization will achieve

its long-range intention

and goals

*From Benjamin B. Tregoe and John W. Zimmerman, Top Management Strategy:

What it is and How it Works (Simon and Schuster, 1980)

Culture is…

Organizational culture is "the specific collection of

values and norms that are shared by people and

groups in an organization and that control the way

they interact with each other and with stakeholders

outside the organization.‖1

Culture…2

Provides order and structure

Informs people what is right and wrong

Determines who has power and who doesn’t

Has much to say about organizational structure

1. Charles W. L. Hill, and Gareth R. Jones, (2001) Strategic Management. Houghton Mifflin

2. Source: Schneider, William E. The Reengineering Alternative: A Plan for Making Your

Current Culture Work. Burr Ridge, IL: Irwin Professional Pub., 1994

“I came to see, in my time at IBM,

that culture isn’t just one aspect

of the game—it IS the game.”

—Lou Gerstner, IBM CEO, Who Says Elephants Can’t Dance?

How important is Culture?

CompetenceCultivation

Four core cultures

Source: Schneider, William E. The Reengineering Alternative: A Plan for Making Your Current Culture

Work. Burr Ridge, IL: Irwin Professional Pub., 1994.

Collaboration Control

Competence


Cultivation

Every organization has a predominant culture and may

have subordinate cultures


Four core cultures—the variables

Source: Schneider, William E. The Reengineering Alternative: A Plan for Making

Your Current Culture Work. Burr Ridge, IL: Irwin Professional Pub., 1994.


Competence


Cultivation

Ind

ivid

ua

l

A

lle

gia

nce

Gro

up

Personal Decisions Impersonal

Pra

gm

atic

Vis

ion-o

riente

d

What the organization

pays attention to

The four Strategic Value Disciplines (SVDs)

Operational excellence

Differentiate through superior execution as measured by

productivity and, ultimately, lower price

Customer intimacy

Differentiate through superior matching of customer

expectation with offer fulfillment—demanding higher price

Product leadership

Differentiate through superior design and engineering

yielding higher performance—demanding higher price

Disruptive innovation

Thinking outside the box, imagineering, new paradigms

Source: Moore, Geoffrey A. Living on the Fault Line: Managing for Shareholder Value in Any

Economy. Rev. ed. New York: HarperBusiness, 2002.


Four Core Cultures— Alignment w/ Strategic Value Discipline

Source: Schneider, William E. The Reengineering Alternative: A Plan for Making

Your Current Culture Work. Burr Ridge, IL: Irwin Professional Pub., 1994.


Competence


Cultivation

Every organization has a predominant culture and may

have subordinate cultures

Product

LeadershipDisruptive

Innovation

Customer

Intimacy

Operational

Excellence

Strategic

Value

Discipline

Misaligned strategy and culture: HP-Compaq in 2001

Competence


Cultivation

Disruptive

Innovation

Product Leadership ―HP Invent‖―The HP Way‖

Competence Control Collaboration Cultivation

Cherishes Achievement Order and security Affiliation Self-actualization

Celebrates Top performers Making the plan Teamwork Creativity

Prioritizes The work The system The people The idea

Asks How? What? Who? Why?

Leads by Expertise Authority Process Charisma

Organizes as Work projects Hierarchy Persistent teams Little as possible

Recruits for Competitiveness Loyalty Trustworthiness Brilliance

Source: Moore, Geoffrey A. Living on the Fault Line: Managing for Shareholder Value in Any

Economy. Rev. ed. New York: HarperBusiness, 2002.

Where your culture fits

Lab: Your organization’s culture map

Individually, evaluate the culture of your organization and draw its ―culture egg‖

Use a blue dot sticky and post your ―core‖ culture on large ― flip chart‖ culture map

In triads, discuss the following:

Is your culture working for you? Is it aligned with strategy?

How might your culture egg shift as strategy changes?

Given your culture, what adjustments might you make individually to better align?

Review the Cultural Questionnaire

5

4

3

2

1

1

2

3

4

5

5

43

2

1

1

23

4

5

Control


Collaboration

IDEO background

One of the world’s largest and most

successful design consultancies

Responsible for the physical design of many

notable products, from Apple’s first mouse to a

mechanical whale for Free Willy

Located in Palo Alto, California

Founded by David Kelley, Stanford Engineering

professor

Lab—the IDEO culture

From your

observations, what

is IDEO’s culture

and strategy?

What evidence do

you have to

support your

position?

Is the IDEO culture

sustainable?

Can IDEO’s culture

work in other

organizations?

Competence


Cultivation

?

Offer advantage Customer

advantage

Industry

advantage

Category

advantage

Operational

excellence

Economizers

BIC, Motel 6, Costco

Satisfiers

Kinko’s, IKEA,

Southwest Airlines

Dominators

Wal-Mart, Dell, Visa,

Exxon

Reinventors

McDonalds, FedEx,

Jiffy-Lube, Charles

Schwab, Celera

Genomics

Customer

intimacy

Delighters

Nordstrom, Nike,

Crystal Geyser, Hold

Everything

Includers

McKinsey, Martha

Stewart, Saturn,

Starbucks

Market-makers

Merrill Lynch, NY

Yankees, Disney

Niche-carvers

AARP, MTV, Silicon

Valley Bank, Pleasant

Company

Product

leadership

Reassurers

Duracell, Sony, Tumi,

Titleist, Agilent

Excellers

REI, Adobe, Ferrari,

Lawson, Retek

Excluders

Cisco, Microsoft,

Mercedes, Nokia

Innovators

Palm, Apple, Sharper

Image, Chrysler

Plymouth

Disruptive

innovation

Flashers

Priceline, eTrade,

Netscape, Napster

Enchanters

Home Shopping, TiVo,

Intuit, Pleasant

Company

Disrupters

Amazon, AOL Time

Warner, Enron

Sorcerers

eBay, Yahoo,

Nintendo, Polaroid

Source: Moore, Geoffrey A. Living on the Fault Line: Managing for Shareholder Value in Any Economy.

Rev. ed. New York: HarperBusiness, 2002.

Where would you put IDEO?

Competitive advantage grid

Group

Impersonal:

Data

Personal:

Insight

Individual

Cultivation

culture(self-actualization)

Collaboration

culture(affiliation)

Competence

culture(achievement)

Control

culture(order & security)

Four cultures—summary

Checklist—Deep Dive

What is the most appropriate culture you need to

create or maintain to achieve your objectives?

Is the current structure of your project organization

compatible with its strategy and culture?

What changes are necessary to enhance the

alignment and ultimate strategic success of your

organization?

If there is some misalignment in your organization,

what CAN you do to support and grow the team and

its ability and willingness to contribute to the desired

outcomes?

In conclusion…

Culture has a profound

impact on your ability

to convert strategy into

action.

Know your culture and

what you can do to

leverage it to help

achieve your

objectives

strategy and culture - stanford university

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