Need to shift your company culture? Shift your leadership style.

We are working with a senior executive in a global technology organization who was recently tapped for his strong leadership in a smaller, more nimble competitor. The remit? To reinvigorate innovation in a key business unit of this proud, mature company. The mandate is to introduce a breakthrough new product, leapfrog the current dominant player, and take the lead in the market segment.

This is no easy task because the habits and norms of the big company are about process and deliberation and control. It’s been decades since the company was a scrappy challenger, innovating faster and more brilliantly than its then-stodgy competition. How times change. Bureaucracy and more fixed mindsets now permeate most every part of the organization. So what is this leader to do? Among other things, matching leadership style to the culture, to help drive innovation rather than reinforce a “control” orientation in the team.

To help leaders understand organizational culture, we like to offer the Competing Values Framework (CVF), which comes out of the University of Michigan Ross Business School. This easy-to-understand yet well-researched model quickly gives busy corporate leaders a way of seeing their culture and making decisions about how to lead effectively. It is especially useful in our fast-moving economy where companies frequently face new disruptors and must respond to competitive threats rapidly. 

Competing Values Framework

CVF culture can also be readily measured by using online survey of employees including the highly effective Organizational Culture Assessment Instrument (OCAI), which offers these descriptions of the four cultures:

1. Clan Culture

This working environment is a friendly one. People have a lot in common, and it’s similar to a large family. The leaders or the executives are seen as mentors or maybe even as father figures. The organization is held together by loyalty and tradition. There is great involvement. The organization emphasizes long-term Human Resource development and bonds colleagues by morals. Success is defined within the framework of addressing the needs of the clients and caring for the people. The organization promotes teamwork, participation, and consensus.

Value Drivers: Commitment, communication, development

Theory of Effectiveness: Human Resource development and participation are effective

Leader Type: facilitator, mentor, team builder

2. Adhocracy Culture

This is a dynamic and creative working environment. Employees take risks. Leaders are seen as innovators and risk takers. Experiments and innovation are the bonding materials within the organization. Prominence is emphasized. The long-term goal is to grow and create new resources. The availability of new products or services is seen as success. The organization promotes individual initiative and freedom.

Value Drivers: Innovative outputs, transformation, agility

Theory of Effectiveness: Innovativeness, vision and new resources are effective

Leader Type: Innovator, entrepreneur, visionary

3. Market Culture

This is a results-based organization that emphasizes finishing work and getting things done. People are competitive and focused on goals. Leaders are hard drivers, producers, and rivals at the same time. They are tough and have high expectations. The emphasis on winning keeps the organization together. Reputation and success are the most important. Long-term focus is on rival activities and reaching goals. Market penetration and stock are the definitions of success. Competitive prices and market leadership are important. The organizational style is based on competition.

Value Drivers: Market share, goal achievement, profitability

Theory of Effectiveness: Aggressively competing and customer focus are effective

Leader Type: Hard driver, competitor, producer

4. Hierarchy Culture

This is a formalized and structured work environment. Procedures decide what people do. Leaders are proud of their efficiency-based coordination and organization. Keeping the organization functioning smoothly is most crucial. Formal rules and policy keep the organization together. The long-term goals are stability and results, paired with efficient and smooth execution of tasks. Trustful delivery, smooth planning, and low costs define success. The personnel management has to guarantee work and predictability.

Value Drivers: Efficiency, timeliness, consistency, and uniformity

Theory of Effectiveness: Control and efficiency with capable processes are effective

Leader Type: Coordinator, monitor, organizer

Thus, our leader above needs to shift to a more visionary style of guiding the organization, stressing more innovation, creativity and agility. Their leadership message must be inspirational and ask the business unit’s leaders, managers and workers to make necessary changes to achieve the needed product breakthroughs. Control and efficiency must give way to an approach emphasizing vision, flexibility, and change leading to innovation. 

This is shown by the “kite” diagrams that provide a comparison of where the culture has been and how it needs to evolve to achieve key business objectives.

Competing Values Framework - business objectives

This is a hard transition because it challenges the employees’ contracts with their employer. Incentives that reward loyalty and predictability of performance must shift to the big “win” on your resume of having contributed to a market breakthrough. Quickly, employees must adopt a mindset that their career at the company is a function of how they help the company throw out old ways of doing things and succeed in a faster-changing and more dynamic market. 

This is one example. In other situations we have seen leaders shift their organization from a comfortable but under-performing Clan culture to more of a Market culture, dialing-up their financial metrics, strengthening their sales organization, and creating a more competitive product line. 

Business guru Peter Drucker is famously quoted for his dictum “Culture eats strategy for breakfast.” Indeed, leaders properly matching their leadership style to help evolve the culture to meet business goals will ensure that their strategy will not be “toast.”

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