Organizational Culture Is a Competitive Advantage

1 big thing: Where are the culture strategies?

Consider this: If culture eats strategy for breakfast, why do some organizations continue to respond to labor shortages and economic contractions with salary increases, staff reductions and other snack-sized, often short-sighted actions?

Why it matters: This is a time-sensitive question for board members and C-suite leaders to ask themselves as they scale back capital expenditures and consider cost optimization steps and operating expense reductions in response to economic uncertainties.

Our thought bubble: Leaders need to take a fresh look at the long-term value that high-performing organizational cultures generate.

  • A first-rate culture diminishes workforce backlash to cost-reduction measures.
  • Corporate leaders can expect to outlast near-term economic gyrations.
  • Strong organizational cultures also play a pivotal role in helping companies accelerate out of economic downturns faster than their competitors, which should make culture-building a priority.

Traditional talent management mindsets and strategies still pervade in many organizations.

Developing and sustaining a best-in-class organizational culture is a challenge:

  • Culture-building requires buy-in among all business leaders along with the alignment of cultural values and decisions at every level of the organization.
  • Harmonizing stated cultural values and individual organizational behaviors demands a grasp of the interrelated influences elevating the value of organizational culture.
  • Equipped with that understanding, board and C-suite leaders can design a game plan for strengthening the culture.
  • This begins with taking a hard look in the mirror.

5 ways to build a better culture

  • Look in the mirror. Leaders set the tone.
  • Parse the short- and long-term implications of talent management decisions.
  • Measure (to manage) your culture. Common KPIs include employee engagement scores, attraction and retention measures, and success rates of new hires.
  • Rethink how managers are selected and groomed. CHROs and their C-suite colleagues should assess the efficacy of management training programs.
  • Cultivate and sustain transparency when communicating bad news.

Call to action – Build a better culture blueprint

What they’re saying: In a rundown of companies that have downsized their workforces in 2023, The Wall Street Journal emphasizes that announcements of layoffs are often misleading.

  • These announcements communicate to employees the degree to which leaders’ decisions, behaviors and communications align – or fail to align – with cultural values.

The bottom line: Actions with workforce implications need to be executed in ways that reflect the organizational culture and build trust while also supporting business objectives that align with shared values. This is the path to building an organizational culture that will create long-term competitive advantage.

Go deeper.

(The Bulletin — Volume 8, Issue 5)

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Fran Maxwell is the global lead of our People Advisory & Organizational Change Segment. Based in Phoenix, he brings to Protiviti more than 21 years of experience in human resources and change management consulting. Before joining Protiviti in 2021, Fran held ...