Understanding the INFLUENCE of Organisational culture on performance, risk, and compliance outcomes
Alignment of organisational culture with operating context, commercial strategy, and risk-taking capacity is critical for the achievement of required outcomes in ways that create and protect long term value.
We help organisations to deliver required outcomes faster and with less risk.
BEYOND BEHAVIOUR
The saying ‘culture eats strategy for breakfast’, often attributed to Peter Drucker, was echoed by Edgar Schein in 1985: ‘culture determines and limits strategy’. While these pioneers of management theory and organisational psychology approached culture from distinct perspectives, they both advocated for an integrated approach to culture, strategic change, and leadership.
They believed these elements are deeply interconnected and influence each other within an organisation, this idea of interconnectedness extends to the (relatively newer) concepts of risk-taking appetite and capacity.
The importance of cultivating the ‘right’ culture is becoming more prominent across all industries, particularly against a backdrop of serious incidents that stem from deeply-entrenched culture vulnerabilities.
Organisational culture is multifaceted, learned, and constantly evolving – which over time can mean specific aspects of culture become misaligned with changing context, strategies/leaders/priorities, and risk-taking capacity. Misalignment can lead to an inability to deliver on strategic intents or result in commercial, stakeholder, and reputational harm.
Particularly in financial services, regulatory standards extend into the traditional realms of HR/P&C functions – the custodians of organisational culture and its key constituents such as leadership, accountability, and remuneration. Organisational responses to regulation or incidents typically reflect the prevailing cultures that lead to undesirable outcomes. In some instances, organisational responses incubate degrees of risk aversion and unnecessary bureaucracy, adding to strategic risk.
Our philosophy is uniquely defined to evaluate organisational culture through the lenses of desired or undesired outcomes. We isolate and address problematic root cause, and identify cultural accelerators to help execute strategy faster with less risk.
“Risk represents both opportunity and threat, yet in most large organisations the management of risk is siloed across organisational divisions that prioritise opportunity or threat. Culture is the common thread that has the potential to drive better outcomes.”