ORGANISATIONAL CULTURE, LEADERSHIP AND REWARDS

 

This article addresses the relationship between an organisation's culture, leadership and rewards. The article highlights how an organisation's strategy supportive culture can enhance high performance. It is also important to create a spirit of high performance in the organisation and to link rewards to the level of performance. Adequate policies are to be put in place by the leadership to ensure that those who fail to perform are not unduly punished but are encouraged to come up with bright ideas next time.

Administrative Components of Strategy Implementation

Strategy implementation has primarily an administrative focus. So, successful strategy implementation depends on the skills of working through others, organising, motivating, culture building and creating stronger fits between strategy and how the organisation operates.

Ingrained behaviour does not change just because a new strategy has been announced. Implementing strategy posses a tougher management challenge than developing a sound strategy plans as we shall see in this article.

The task of generating organization-wide commitment to strategy implementation and execution has four major components, which are as follows.

a.    Motivate and organise units and individuals to execute the strategic plan and achieve the goals.

b.   Building of a strategy-supportive corporate culture

c.      Create a strong result orientation and a spirit of high performance.

d.    Link the reward structure to actual strategic performance.

We shall discuss these major components one after the other to see how they affect strategy implementation.

The motivation of People to Achieve Set Goals

For organisations goals to be achieved there is the need for commitment to implementing and executing the formulated strategies by the units and individuals in the organisation. Commitment on the part of the individuals can be obtained through motivation, incentives and the rewarding of any good performance. There are a range of options for getting people and units to push hard for successful strategy implementation using the standard reward and punishment mechanisms such as salary increases, bonuses, stock options, fringe benefits, promotions, praise, recognition, job control, decision making autonomy, promise of attractive locational assignment and bonds of group acceptance. The aim of motivation is to inspire the employees to do their best for the organisations and a commitment to make the strategy work.

Examples of strategy-supportive motivational approach are:

a.                 Every employee to get a weekly 10% bonus by coming to work on time each day of the week.

b.                Employees meet regularly to hear inspirational speeches, using company song, and chant the corporate litany. There could also

be inspirational get-together for organisational members. The speeches may be personal and emotional.

c.                 Assemblies can be organised on a particular day of the week to

listen to a management talk about the state of the company.            San

Diego companies engage in brisk calisthenics on a particular day of the week and believe that by doing one thing together each day, it reinforces the unity of the company.

Units and divisions may be given freedom to set their side of the case which must be critically weighted. For instance, when a strategy implementations use of rewards and punishment induces too much tension, anxiety and job insecurity, the result can be counter productive. However, it is not useful to completely eliminate tension and pressure for performance from the strategy implementation process. A high performing organisation will need a cadre of ambitious people who cherish the opportunity of climbing to the top of the ladder of success, who thrives in performance-oriented environment and who find some degree of competition and pressure useful to satisfy their own drives for personal recognition, career advancement, self satisfaction and accomplishment.

The generally accepted view is that a manager's push for strategy implementation should involve more of positive than negative motivational elements. The more a  manager understands what motivates subordinates and the more that motivational incentives are relied on to implement and execute strategy, the greater will be the employees' commitment to carrying out the strategic plan.

Building a Strategy-Supportive Culture

Every well established organisation has a unique culture. This means that it has a special history of management; set ways of solving problems, conducting day-to-day organisational affairs, its managerial styles; it has its own patterns of “this is the way we do thing here”. It has its own legends and heroes, its own stories and experiences of how changes have been instituted.

An organisation's culture is therefore, very important in strategy implementation it is as fundamental as implementing and executing the chosen strategic plan which may involve moving the whole organisational culture into alignment with strategy. Optimally, the organisation's culture should be in tune with strategy so that the execution of the strategic plan can be truly powerful and successful.

The corporate culture may be the philosophy, attitude, belief and shared values upon and around which the organisation operates. It may be difficult to pin it down in any company's activities or accurately characterise it.  They manifest in people's attitude and feelings. The stories they tell the vibrations and gist that emanate from the work environment. People are usually proud to share and identify with the success stories and traditions and values of the organisations. The culture of a company can be shaped by these:

i.   A belief in being the best

ii.   A belief in superior quality of product or service

iii.  A belief in the importance of individuals and a faith in their ability to make strong positive contribution to the company

iv.               A belief in the importance of details of execution and the knitty- gritty of doing the job well.

v.     A belief in the saying that customers should reign supreme

vi.      A belief in the importance of informality during communication

vii.   A recognition that growth and profit are importance to the company's well.

In companies where these are strong culture, every employee must abide by it or opt-out and leave the company. Such companies are clear on what they stand for, that take serious the process of shaping values and reinforcing their cultural norms.

   Fitting of Strategy and Culture

Usually, the strategy manager has the responsibility of ensuring that the strategy chosen can be executed within the given constraints imposed by the organisation culture. So, it is the manager's leadership task to bring the chosen strategy into alignment with the corporate culture.

In creating a “fit” between strategy and culture, the management has to consider the problem of needed changes and how long will it take to effect the changes once started, to complete it and then bear the required fruits.

Normally, managerial actions taken to modify corporate culture should be symbolic and substantive. The manager has to consult widely and convince the organisation that more than cosmetics is involved. There should be a competent team which is psychologically committed to superior strategy execution.

Creating a High Spirit of Performance

One of the most valuable strategy implementing skills is the ability to instill high level of commitment to strategic success and to create an atmosphere where there is constructive pressure to perform. When an organisation consistently performs well (near its peak), the outcome is improved strategic success. It becomes organisation with a climate of excellence where emphasis is on achievement. So, a spirit of high performance pervades. Such an organisation should strive hard to

develop on a consistent ability to produce results over prolonged periods of time. It must utilise the full range of rewards and punishment to establish and enforce high standard of performance.

Normally, a number of performance measures are put in place at every level. These may include profitability at the corporate level as well as market share growth rates, sales, competitive positions and prospects. In manufacturing, it may focus on unit manufacturing costs, quality control, the number of work stoppages and equipment breakdown.

However, the success story of creating a spirit of high performance has been on “intense focus on people”. The goal is to get everything in the organisation involved and emotionally committed. It should involve a tough-minded respect for individual employee, a willingness to train each of them, setting a clear performance expectation, granting of enough autonomy to each employee to stand out, excel and contribute. An important aspect of the organisation's culture is making champions out of the people who turn in winning performances.

The spirit of high performance results from a combination of factors, not just a belief or philosophy or programme of the company. It encompasses factors such as words, network of practices symbols, styles, values and policies pulled together to form a system that produced an ability to achieve extraordinary results with ordinary people. The drivers of the system believe in the worth of the individual and pay attention to minute details with an effort to do teeny-tiny things right.

There is a negative aspect of the high spirit performance. Managers whose units consistently perform poor should be removed or re-assigned for their own good. People who find themselves on the job they cannot handle are unhappy. Beside, subordinates have the right to be managed with competence, dedication and achievement. Unless their boss performs well, they themselves cannot perform well.
Linking Rewards to Performance

If strategy accomplishment is a top priority in an organisation, then reward structure must be linked explicitly and tightly to actual strategic performance decision on matters such as salary increases, promotion, and who gets which key assignment. The ways and means of awarding praise and recognition are the strategy implementers' foremost attention getting, commitment generating devices.
The way an individual is perceived to be doing a good job and such matters hardly escape the notices of scrutiny of every member of an organisation.

Creating a tight between strategy and reward structure is best accomplished by a natural agreement on strategic objectives, responsibility fixing and deadlines for achieving them, and then treating such achievement as contract. Then the contract for strategic performance should be the real basis for designing incentives, evaluating individual efforts and handing out rewards. All managers must understand clearly how rewards are calculated.

     Internal  Administrative  Support  for Strategy Implementation

Another central task of strategy implementation concerns installing internal administrative support system which can fit into the needs of the strategy. A few of the re-occurring administrative issues are: (a) the kind of strategy facilitating policies and procedures to establish (b) getting the right strategy critical information at the appropriate time, (c) the “controls” that are needed to keep company on its strategic course.

3.8 The Role of Strategy-Related Policies and Procedures

Strategic change means changes in the way internal activities are conducted and administered. Asking people to alter their actions and

practices always upset the internal order of things. There will

be

pockets of resistance. The new and revised policies should facilitate for any part of the organisation to resist or reject the chosen strategy. Policies help to enforce strategy implementation in a number of ways including:

a. They act as a lever for institutionalising strategy- supportive practices and operating procedures.

b. They place a limit on independent action and set boundaries on the kinds and direction of action that can be taken.

c. They act to align actions and behaviours with strategy throughout the organisation.

d. They help to shape the character of the internal work climate and to translate the company"s philosophy to how things are done.

e. They operationalise the corporate philosophy, thereby playing a key role in establishing a fit between corporate culture and strategy.

Managers need to be inventive in strategy implementation when establishing supportive polices. For example, IBM"s policy of trying to offer the best service of any company in the world is its competitive strategy and corporate philosophy.

However, too much policy can be as stifling as a wrong policy or as chaotic as no policy at all. Sometimes, the best policy for implementing strategy is a willingness to let the subordinates “do it any time they want if it makes sense and works”.

In order to stay on top of how well strategy implementation is going, a manager must develop a broad network of controls and sources of information both formal and informal. The regular channels could in talking with key subordinates, reading written reports, getting feedback from customers, watching competitive rival firms" reactions, tapping into the flow of gossip through the grapevine, listening to the minds of the rank and file employees and first-hand observations.

There is a need for strategy managers to guard against major suppressors by making sure that they have accurate information and a “feel” of the existing situation. One major way of doing this is by regular visit “to the field” and talking with different people at many different levels.

  Exerting Strategic Leadership

There is a litany of good strategic management which is very simple, that is to say “formulate a sound strategic plan, implement it, execute to the fullest”. Obviously, this is easier said than done.

Exerting, “taking charge” leadership, being a “sparking plug”, “ramrodding” being one of the “movers and shakers” in the organisation and getting things done by coaching others to do it are not easy skills.

Moreso, a strategy manager has different leadership roles to play such as chief entrepreneur, chief administrator, crises solver, taskmaster, figurehead, spokesperson, resources allocator, negotiator, motivator, adviser, policymaker, consensus builder and role model. Sometimes, a leader should be authoritarian and hardnosed and at other times be a perceptive listener and a compromising decision-maker. In some occasions, the leader plays a highly visible role with the extensive time commitment. At other times, there should just be a brief ceremonial performance with most details delegated to subordinates.

Generally, the major challenges to the strategic leadership are that of diagnosing situations, at hand and choosing any of the several ways to handle it.