Nurturing a Culture of Collaboration and Growth

Many companies have failed, created more problems, and wasted investments in their initiatives to restructure, re-engineer, right-size, and implement total quality management1^, 2^, etc. Research shows that one of the main reasons for such failures is neglecting to change and nurture a culture of collaboration and growth.

Innovative Company Succumbs to Cultural Challenges

Digital Equipment Corporation (DEC), founded in 1957 by Ken Olsen and Harlan Anderson, was a major manufacturer of minicomputers known for playing a leading role in the introduction of interactive computing. By 1990, it grew to US$14 billion in revenue with over 120,000 employees.

DEC was the largest minicomputer manufacturer and second largest overall computer manufacturer in the country, after IBM. In 1998, the company ran into severe financial difficulties and was acquired by Compaq Computer Corp. DEC was very adept at responding to changes in the technology landscape and developed a line of personal computers widely considered to be technologically superior to other personal computers on the market. Yet, DEC failed and was pushed out of the technology map. There were many reasons for its demise, but an analysis conducted by Edgar Schein and colleagues pointed to its culture as being primarily responsible for its rise and fall.5^, 6^, 7

DEC’s strategy was to develop a technologically superior computer to compete with IBM. The company was organized as a product management matrix structure. This structure was conceptualized to encourage autonomy and innovation. It provided so much autonomy that more than one product development team emerged, competing with each other—internally focused versus externally focused. This resulted in three different, incompatible personal computer product lines. Even though technologically they adapted fast, product teams and leaders were operating within the company’s existing corporate culture of the mainframe and minicomputer. This misalignment of sub-cultures with the overall corporate culture, leadership styles, and non-collaborative culture played a vital role in the demise of DEC.7

Longevity and stability in the workplace are no longer the norm. Technological, societal, and economic development demand change. But adaptation is not easy. It requires both leaders and followers to buy into large cultural shifts while sustaining critical talent at every level.

Cultural dynamics are among the most challenging elements of an organization to manage. Done poorly, large changes can tear organizations apart. But done well, culture change initiatives can yield massive returns on investment. Effective cultural change impacts various factors, including leadership style, personal change, talent development, and other growth strategies and frameworks.

This article describes an integrated approach to leading cultural change by understanding:

• The importance of organizational culture
• Leadership style as a key component of the change process
• How individual change is the key component of cultural growth and sustainability

Cultural Change and Management

Culture is the living, breathing personality of an organization. It encompasses the beliefs, values, preferences, and practices affecting individual and group behavior. It is an embedded social order that shapes the behaviors and attitudes of individuals and groups at every level of the organization.3, 8, 9]. When properly aligned with personal values, principles, and needs, organizational culture can be an engine of durable growth.3 Organizational cultures are:

• Collectively held, at least by some subset of society or organization,
• Socially transmitted by members of the organization through their internal and external interactions,
• Built over time, especially values and beliefs, and
• Impact long-term growth and sustainability.

Why should organizations care about cultural change now more than ever? We are deeply interconnected, so any external force results in organizations facing both external and internal pressures to manage leadership transitions, business expansions, and market contractions. Culture needs to keep up because when an organization’s culture grows stale, the organization as a whole becomes rigid and unable to stay competitive and sustainable.

Drivers of Cultural Transformation and Management

Globalization of Economies

The trade landscape has changed significantly since World War II. With increasing globalization, organizational existence, and performance have been subjected to fierce competitive international pressure—even for domestic companies. As organizations expand their operations across borders, they encounter a variety of beliefs, values, and practices that challenge their existing culture. However, these challenges also present opportunities to build a new, more inclusive, diverse, and innovative culture that can adapt to new markets and conditions.

Mobility of Resources and Talents

The migration of human resources has significantly impacted the composition and quality of talent that organizations can draw upon. Resources and talent migrating within and between organizations have significant impacts on the culture of those organizations. Poorly managed, a lack of cultural cohe-siveness can cause tension in teams and result in organizational silos. But when managed well, organizations can purposefully migrate talent dynamically while maintaining a collaborative, innovative, engaging, and growth-oriented environment across their functional areas.

Advancement of Technology

Technology has grown leaps and bounds in the past decade and is not slowing down. Organizations with a poor culture struggle to keep up with the pace of change and fall behind. However, strong organizational cultures lead managers and employees to search for innovative ways to implement technology in their practices. Done well, technology-oriented cultural change can lead to a more data-driven decision-making environment, a flatter hierarchy, increased employee autonomy, and a more dynamic workplace.

Exponential Growth in Information

Information is more abundant than ever before. Organizations produce and consume more information than ever before, thanks to the development of information technology. Poorly equipped organizations can drown in a sea of information. However, organizations with strong cultures know how to sift through the information available to them effectively, educate their workforce using new technologies, and use the massive amounts of knowledge they produce effectively.

Organizations of all types and sizes have an urgent need to create unique competitive advantages to stay successful in today’s environment of dynamic change and scarce resources, Organizations face internal and external challenges to sustain their continued existence in the global landscape. On the external front, organizations encounter increasing financial performance, growth, product/service innovations, and competitive threats. Internally, they face more pressure to retain talent, improve efficiency, implement process changes, and adapt to technological innovations to cater to changing customer needs.

Firms should focus on every aspect to improve their effectiveness and efficiency, particularly critical drivers of culture, leadership, and talent management. It’s important to create a unique competitive advantage and an environment for innovation in order to stay ahead of the growth curve. The driving forces previously addressed here put a lot of pressure on the organization’s survival and growth. In the following sections, I outline an integrated approach that provides guidance and a framework for developing a roadmap and strategy for the future.

An Integrated Approach to Cultural Transformation

Few organizations successfully integrate their components to function as one. Most are a loose collection of silos, kept separate by cultures, workforces, leadership styles, geographical locations, products, and service offerings (to name a few). Many organizations could benefit from a major realignment and transformation.

For example, consider a global pharmaceutical company with facilities around the world that manufactures products with complex processes. This company has huge investments in facilities and equipment, including information technology infrastructure, among other operational divisions. Monitoring the performance of each product line, facility, and equipment takes a lot of integration, process improvements, and data management, even for one site. The management of siloed operations, even within one site, is challenging, and coordinating all global operations to work together is even more challenging. Each department within a site operates in its own silo, providing management their own perspective on performance. There is a significant duplication of efforts at this company leading to suboptimal use of talents and other resources, particularly systems and technology.

Siloed operations create roadblocks that hinder the development of innovation-centric organizations. To address this issue, an information integration program was initiated at this company with efforts to optimize processes, integrate data, and harmonize systems. One potential solution required an integrated application to synthesize information from multiple different sources and to provide stakeholders and the leadership team with insights into their decision-making framework. The adoption of the integrated solution slowed significantly because of the existing siloed culture, misaligned leadership, and the individual personality differences. The culture was not conducive to accomplishing the vision of being an innovative organization. The leadership team recognized the need to transition to more of an entrepreneurial and learning culture where collaboration and innovation are fostered in all aspects of science and operations.

The key takeaway: The company needs a cultural transformation strategy. Leadership and personnel must align to successfully adopt solutions, ultimately fostering innovation, agility, and synergy within the organization. Some key questions to consider before starting a cultural transformation journey:

• How can we transform our culture to meet the future needs of business today?
• How can we get employees or teams to effectively execute our strategic goals?
• How can we align organizational performance with employee engagement and customer experience?
• How can we promote cross-organizational collaboration to drive innovation and agility in fast-changing markets?

Effective cultural change that supports sustainable growth requires aligning three major forces: (1) the cultural environment, (2) leadership styles, and (3) personal skills and traits. For a growth and sustainable model, all three elements must be integrated and continuously iterated (see Figure 1). In an integrated approach to cultural change and management, all three elements need to be carefully nurtured and managed to ensure growth and sustainability.

The next three sections of this article explore each element of effective change and outline the strategic process map for ongoing cultural evolution to achieve a unique competitive advantage.

Cultural Environment and Characteristics

According to the Competing Values Framework (CVF) developed by Kim S. Cameron and Robert E. Quinn in 1983, organizational cultures can be classified into categories along the following two dimensions.

Vertical Axis: Flexibility and Discretion vs. Stability and Control

The movement along the vertical axis is determined by how people respond to change. Organizations scoring high on control are at the bottom of the axis and tend to have many documented procedures and processes that must be followed. Less regimented organizations are located higher on the vertical axis of control.

Horizontal Axis: Interdependence and Internal Focus vs. Independence and External Focus

The movement along the horizontal axis is influenced by how people interact with each other and the environment. Firms focusing externally tend to be concerned with the market, new customers, and competitors. Organizations that focus internally are concerned with employee morale and how work is accomplished. Existing customers remain important as the company prioritizes processes over new business.

Four Work Cultures

Organizations generally fall under one of four cultures: collaborative (clan), entrepreneurial (adhocracy), controlling (hierarchy), and competing (market) (see Figure 2):

Collaborative (Clan)

Organizations with this culture exhibit characteristics of flexibility, inward focus, teamwork, employee involvement, collaboration, shared goals, and a sense of camaraderie. These organizations believe in a strong commitment to customers and empower employees to run operations effectively. In this culture, employees feel as part of a close-knit family, with a strong sense of collaboration, teamwork, shared values, and talent development. This culture focuses heavily on relationships, mutual trust, and working for a greater cause. Leaders of this culture follow the T.R.U.S.T. Leadership Model: Teamwork, Respect, Understanding, Sincerity, and Tolerance.

Entrepreneurial (Adhocracy)

This culture values flexibility and discretion, but unlike clan cultures, it has an external focus. This environment motivates and encourages members to brainstorm new ideas, innovate, create, and take risks. Teams adapt quickly to respond to changing external conditions. Members of this culture are flexible, expansive, explorative, creative, and comfortable when dealing with changing market and economic conditions. They are always ready for changes to the organizational structure and future direction. Change is the only constant for this culture. The work environment is trusting and open-minded, where people are not afraid to try new ideas and explore alternatives. Leaders of this culture encourage innovation, risk-taking, learning, and exploring unchartered water.

Controlling (Hierarchy)

This culture shares some characteristics of the collaborative clan culture, but emphasizes centralized management with strict rules and processes. Regulatory-compliant organizations, such as government entities, biotechnology and pharmaceutical companies, typically fall under this cultural environment. People are expected to follow policies and procedures, doing work the correct way with an emphasis on efficiency and smooth-running operations. The main characteristics of this culture are decisions, information, and communication flowing down the chain of command. This structure inherently restricts the free flow of communication between employees and upper management, which can result in a lack of enthusiasm from employees leading to reduced job satisfaction. These organizations respond effectively and efficiently to routing business but are slow to respond to unique situations. Leaders of this culture are very regimented in planning, maintaining the chain of command, and following long-standing customs.

Competing (Market)

This culture emphasizes centralized control with a strong external and customer focus. It encourages employees to be laser-focused on being efficient, productive, and competitive. Leaders of this culture manage the organization by measuring performance and growth in empirical terms, such as market share and financial performance. Employees are expected to be results-oriented and are evaluated against each other using both qualitative and quantitative results. Leaders of this culture are very goal-focused, customer-centric, and are focused on gaining a competitive advantage.

There is a greater sense of urgency to create an environment where people feel connected, contribute to a greater cause, bring out the best in themselves, and increase the happiness index — both at home and in the workplace. Understanding the type of organizational culture that represents an organization’s current environment, and future changes or transformations, will enable better alignment of leadership styles. This will facilitate leaders in influencing and inspiring their employees for future growth. Defining the type of leader and talents to represent the cultural brand is essential for success and growth.

Cultural environments have massive impacts on the day-to-day operations and long-term growth of an organization. So, who is in the best position to steer the culture of an organization? Leaders can emerge in an organization both positionally (i.e., promotion to the C-suite) and socially (i.e., members of the organization who have informal authority). The differences between these types of leaders and their specific influence over organizational culture is outside the scope of this article. But no matter which type of leader, leadership style is critical to shaping your organization’s cultural environment.

Leadership Style and Characteristics

Understanding various leadership styles is crucial in achieving alignment between leadership style and cultural shifts. This will empower leaders to manage talent and build high-performing teams. There is no one right way to lead in a way that is suitable for all situations — it depends on skills, experience, the team itself, and the task at hand. The two extreme styles are visionary thinking (creating value in places not previously considered) and rules-based system thinking (sustaining and bringing about change designed to maintain and improve performance). Leadership means different things to different people and is situated within an organization’s cultural context.

Four Primary Styles of Leadership

• Democratic: Also called participative, a democratic leadership style encourages team members to take a more active role in decision-making. Team members are encouraged to share ideas and opinions without fear of judgement. Teams feel more engaged and creative. Collaboration is encouraged and rewarded. This style works best in situations where team members are skilled, motivated, self-starters, and eager to share their knowledge. By listening to concerns and diverse perspectives, and incorporating varied ideas, leaders demonstrate confidence in team members and send positive vibes suggesting that opinions matter and contributions are valued. This gives employees a sense of ownership and responsibility.
• Transformational: These are leaders who exhibit integrity, charisma, and trustworthiness, which inspires and motivates followers. They set clear goals and expectations, and maintain transparency in communications across teams. Transformational leaders are packed with multiple skills, making them exceptional entrepreneurs who are highly valuable in dynamic environments.
• Authoritative: This leadership style thrives in a highly structured environment with rules, process, and procedures. It centers on setting clear guidelines. These leaders provide clear explanations of tasks, process, procedures, timelines, and expected behaviors and outcomes. There is a clear distinction between the leader and followers. Autocratic leaders independently make decisions with minimal or no input from the rest of the group. Leaders with this style motivate team members by connecting their work to the broader oganizational strategy, helping them see how their daily tasks contribute to a greater purpose.
• Transactional: This leadership style is characterized by a cost-benefit transaction between leaders and employees, where leaders control the exchange of value based on the needs of followers. Transactional leaders define goals and objectives, and communicate effectively to organize tasks and activities with the cooperation of team members to ensure that broader organizational goals are met. It centers on trusting employees to work towards a shared vision with autonomy and creatively, which leads to high employee engagement and increased job satisfaction.

Research suggests that a congruence between culture and leadership style ensures success and growth of an organization. However, leaders are often promoted despite having beliefs, values, styles, and behaviors that are not aligned with the cultural needs of the business. This misalignment results in suboptimal performance and long-term damage. The highest performing leaders tend to have a good mix of skill sets enabling them to comfortably operate and succeed in each quadrant.2^, 9

Personal Transformation

We have just discussed cultural environments and leadership styles, two foundations of cultural transformation upon which the success and sustainability of an organization depend. No change process or strategy will produce the desired results unless mindsets, behaviors, skills, and competencies are modified. This happens only through personal transformation. Organizations should create an environment conducive for learning and growing to accomplish individual dreams and goals.8

What does personal transformation involve? How can it be integrated into an organization’s culture? The steps involved in this process include:

• Awareness: Begin with a deep understanding of the current state of affairs. Acknowledge where you stand and where you aim to go.
• Desire for change: Fuel your journey with a passion for making meaningful transformations. Let this be your guiding light.
• Imagination: Realize the power of imagination as the catalyst for change. Envision the desired outcome and chart a course accordingly.
• Visualization: Picture the desired end goal and visualize the journey required to reach that goal. Let this mental imagery propel you forward.
• Living the change: Experiment with living the change you desire, making it an integral part of your daily life.
• True transformation: Embrace changes you wish to see in your thoughts, actions, and demeanor for permanent transformation from within.
• Manifestation: Through consistent effort and dedication, witness the transformation unfold. What once seemed merely imagined now becomes a tangible reality.

Harnessing the power of personal transformation ignites a ripple effect within organizational culture, fostering growth, innovation, and resilience. Embrace this journey and watch as your organization flourishes amidst change. Any journey towards change and perfection starts with a need for change in future behavior. Behavioral change will occur only when there is a mindset shift for any proposed or perceived changes. Once these changes are internalized and implemented, they will provide opportunities for further changes. This continuous change process, when adopted as a personal culture, provides the platform for both personal and organizational growth.

Cultural Transformation and Sustainability Framework

In many organizations, there exists a gap between existing and aspired realities. To bridge this gap, the orgaizational culture must support and advance the organization’s vision, mission, goals, and strategies. Traditionally, owners or senior leadership were considered responsible for establishing an organization’s culture. In a new culture-building framework, the responsibility for cultivating and managing organizational culture rests with every member of the organization.The four foundational pillars for cultural transformation and growth are: a clear long-term strategy, a leadership style that nurtures the organization, an organizational design that creates an environment for success, and talent development for long-term sustainability and innovation. To ensure these foundational pillars are robust enough to withstand future changes, the overall framework and processes must address organizational readiness, leadership and values, and personal transformation. This approach will ensure the organization becomes a learning and innovative organism.

Factors Affecting Cultural Change

• Organizational readiness: Develop an understanding of past and current culture, its origins, and reason for being. Determine the preferred future culture based on business needs. Assess if the organization is ready for change by analyzing the gap between the present and proposed cultural transformation needs using the such as the Organizational Culture Assessment Instrument (OCAI) tool developed Cameron and Quinn.9
• Leadership readiness: As often stated with other programs, top management must be committed to the change and should lead by example. Future leaders need to be skilled, theoretical, and strategic thinkers. Leaders must have deep integrity and intellectual openness, find new ways to create loyalty, lead increasingly diverse and independent teams over which they may not always have direct authority, and empower collaborative approaches inside and outside the organization.

• Organizational transformation:

  Vision and purpose: Identify forces pushing an organization to change culture and the cultural elements that must be changed. Communicate these clearly.

  Strategy and goals: Develop a strategy aligned with the new environment. Include employees at all levels as much as possible.

  Mindset change: Create a framework for ongoing improvement by changing the mindset and behaviors of leaders, contributors, and groups.

  Integration of culture: Integrate cultural styles within the organization to get the best of all styles. Align cultural styles with leadership and personal styles as the cornerstone of success.

  Organizational design: Build the organizational structure. Define clear roles and responsibilities to build an inclusive workplace, and be nimble.

  Talent development: Implement programs to enhance individual cognitive processes. Consider cross-pollination of talents, employee training at different stages, and develop a succession plan.

Strategic Process for Cultural Evolution – Continuous Improvement

Developing a new corporate takes time. The strategy must be visionary, and the change management process should be progressive. There is a saying that “culture eats strategy for breakfast.” All the efforts to develop strategy, improve processes, data integration, system harmonization, and talent development initiatives will not yield ROI if the organization does not create a culture supporting growth, sustenance, and learning.10^, 11

Culture is a powerful differentiator for gaining a unique competitive advantage as it is closely aligned with leadership, talents, and strategy.

Conclusion and Opportunities

The pharmaceutical industry landscape is rapidly evolving due to globalization of economies, regulatory improvements, international support for delivering lifesaving medicines, technological advancements, and capital infusions. The ability to meet growing global demands depends on the capacity to innovate and adapt rapidly. Recent disruptions like the COVID-19 pandemic, inflation, geopolitical shifts, and digitalization, highlight the need for long-term strategies to sustain and grow.

In today’s turbulent business environment, pharmaceutical companies are quickly realizing the need for an innovative-centric culture. Established processes won’t sustain competitive advantage. A flexible culture that encourages creativity, supports innovation, and fosters an environment of collaboration is essential for continuous growth and sustainability.

Industry leaders have a crucial role in delivering sustainable value and growth, whether organically or through acquisitions. This equires strategic prioritization and nurturing cultures at all levels. While encouraging an entrepreneurial and collaborative culture (Figure 2), leaders must manage the controlling and competing cultures of divisions dealing with regulatory compliance and fiscal obligations. Subcultures should support organizational needs and integrate into the overall corporate culture of growth and sustainability.

In today’s turbulent business environment, pharmaceutical companies are quickly realizing the need for an innovative-centric culture. Established processes won’t sustain competitive advantage.

Individual talent is the cornerstone for cultivating an innovative and entrepreneurial culture. Individuals bring new ideas, seek opportunities, and explore new markets. Organizations must foster an environment of learning, creativity, collaboration across subcultures, effective communication, and teamwork, while also planning for strategic succession and implementing talent development plans.

“Cultural transformation” has become a buzzword, with many companies embarking on this journey without robust planning. Often, it involves a quick survey and a new initiative to satisfy the C-suite. However, true transformation only occurs if the organization is prepared for continuous change. Strategically minded leadership must take responsibility for preparing the organization for cultural transformation.

The integrated framework presented in this article could be a catalyst for developing, nurturing, and continuously adapting to a culture that remains aligned with the company’s vision in a constantly changing world..12