Tapping the best that is within: Why corporate culture matters.

Aligning Culture and Business Strategy

Having a strong culture, by itself, is not enough to create a successful organization. In fact, there is no one "best" type of culture, because for culture to be effective it must be compatible with and supportive of the core business strategy. For cooperatives, this means identifying one of three fundamental ways of relating to markets and customers as the primary business strategy: focusing on operational efficiency (control), focusing on customer relations (collaboration), or focusing on innovation (competence). In my view cultivation isn't likely to work for most electric cooperatives.

The most successful companies pick one single business strategy and pursue it, they don't try to be all things to all people. Exceptional companies then adopt the core culture that best supports that strategy.

Justin Schulz is a corporate psychologist and president of Applied Behavioral Sciences, a professional corporation providing organizational and leadership development services. He has assisted dozens of organizations in the electric utility, health care, manufacturing, oil & gas, and high tech industries with reorganizations, aligning organizational culture and leadership with business strategy, and with mergers and acquisitions. He played a key role in the decommissioning of Fort St. Vrain Nuclear Power Station for Public Service Company of Colorado. His numerous publications include articles for the electric utility industry in Nuclear Engineering international, RadWaste, and Public Utilities Fortnightly. He lives with his wife and children in Littleton, Colorado. He welcomes comments on this article and can be reached via email at justin_schuiz@bigfoot.com.

Special Note

The Summer 2001 edition of Management Quarterly will have a follow-up article titled, "Using the Power of Corporate Culture to Achieve Results: A Case Study of Sunflower Electric Power Corporation." It will illustrate how one cooperative came to pursue the development of its culture and leadership as it faced extraordinary challenges to its very survival.

REFERENCES

James C. Collins and Jerry I. Porras, Built to Last: Successful Habits of Visionary Companies, Harper, 1996.

John P. Kotter and James L. Heskett, Corporate Culture and Performance, Free Press, 1992.

William E. Schneider, The Reengineering Alternative: A Plan for Making Your Current Culture Work, Irwin, 1994.

Michael Treacy and Fred Wiersema, The Discipline of Market Leaders: Choose Your Customers, Narrow Your Focus, and Dominate Your Market, Perseus Publishing, 1997.

RELATED ARTICLE: Types of Organizational Cultures

From years of researching the cultures of companies, Dr. William Schneider has identified the four following types of organizational cultures: Control, Collaboration, Competence, and Cultivation. These four cultures can be identified by their distinctly differing approaches to strategy, leadership, and organizational behavior.

* Control cultures drive for predictability and order. Leadership is authoritative and conservative, with a high regard for "proper channels." The strategy for success is to create and enforce order throughout the organization and with customers. (Think: Exxon or Proctor & Gamble.)

* Collaboration cultures pursue close relationships with customers. Mirroring this emphasis on the quality of relationships their leadership invites high participation and focuses on building highly cohesive teams. Success comes from the quality of relationships, both within the organization and between the organization and its customers. (Think: Southwest Airlines or Charles Schwab.)

* Competence cultures pursue excellence, innovation, being the first with new ideas. Leadership in competence cultures is visionary sets high standards and encourages people to achieve new heights. The strategy for success is to be exceptional, unique. (Intel or the old Bell Labs would fit here.)

* Cultivation cultures pursue life enrichment, for customers and employees. Leadership is charismatic and inspirational. (Examples: W.L. Gore and Habitat for Humanity.)

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