HBR's 10 Must Reads 2019

THE LEADER’S GUIDE TO CORPORATE CULTURE

Strategy

For its full benefi t to be realized, a culture must support the strategic goals

and plans of the business. For example, we fi nd diff erences between compa-

nies that adopt a diff erentiation strategy and companies that pursue a cost

leadership strategy. Although results and caring are key cultural characteris-

tics at both types of companies, enjoyment, learning, and purpose are more

suited to diff erentiation, whereas order and authority are more suited to cost

leadership. Flexible cultures—which emphasize enjoyment and learning —can

spur product innovation in companies aiming to diff erentiate themselves,

whereas stable and predictable cultures, which emphasize order and author-

ity , can help maintain operational effi ciency to keep costs low.

Strategic considerations related to a company’s life cycle are also linked

to organizational culture. Companies with a strategy that seeks to stabilize

or maintain their market position prioritize learning , whereas organizations

operating with a turnaround strategy tend to prioritize order and safety in

their eff orts to redirect or reorganize unprofi table units.

Culture styles ranked by industry

Health

care

Industrials

IT/Telecom

Financial &

professional

services

Consumer

discretionary

Consumer

staples

Energy &

utilities

Safety

Purpose

Learning

Order

Results

Caring

Enjoyment

Authority

Based on an assessment of 230+ companies (industry) and a subsample of 25 companies
(strategy)