Embracing culture for businesses development
By Prof. Samuel Lartey
Introduction
BUSINESS leaders often pour time, effort, and financial resources into perfecting strategies. They set key performance indicators, craft complex formulas for success, and employ various tactics to outmaneuver competitors.
Yet, as René Carayol emphasizes, strategy alone is insufficient without a robust company culture. In Ghana, the challenge is no different.
Many businesses are focused on metrics and execution plans, often neglecting the essence of culture, the glue that holds an organization together and drives true performance.
This article explores why culture, more than strategy, defines success and provides insights for Ghanaian enterprises to thrive.
Culture Is More Powerful Than Strategy
This feature uses a compelling analogy to compare strategies and culture in an organisation. The Author likens strategy to the hardware of a business and culture to the software that powers and animates that hardware.
In this narrative, the Author emphasises that even the most sophisticated strategies (the hardware) will not function effectively if the culture (the software) is not aligned and robust.
- Strategy as Hardware:
Strategy is the tangible, visible structures and plans that organizations use to achieve their objectives. These include the company’s vision, performance metrics, and operational processes. Like hardware in a computer, strategy forms the structural foundation upon which the business operates.
- Culture as Software:
Culture, on the other hand, is the intangible yet vital element that determines how people interact, communicate, and work together to execute the strategy. You could compare it to the software that animates the hardware, enabling it to function efficiently.
If the software is faulty or incompatible, even the best hardware will underperform or fail. Similarly, if an organisation’s culture is toxic, misaligned, or dysfunctional, even the most well-crafted strategies will not yield the desired results.
While strategies can be planned, implemented, and easily adjusted, culture is deeply embedded and requires thoughtful nurturing. A positive, cohesive culture can elevate a business’s performance and ensure that strategies are executed effectively, while a negative culture can act as a barrier to success, even with the most robust strategic plans.
The Power Behind Culture’s Dominance
Culture drives behaviors, which in turn lead to results. It outlines the “what” and “how,” culture answers the “why.” Peter Drucker, famously said, “Culture eats strategy for breakfast,” and to John Kotter, transformational change only happens when culture evolves.
In Ghana, where the economic landscape is rapidly evolving, companies face mounting pressure to become more performance driven. Yet, focusing solely on strategy can lead to short-term gains at the cost of long-term sustainability. It is the collective values, beliefs, and behaviors that truly galvanize teams and foster innovation.
The Ghanaian Business Context:
Ghana’s economy has grown steadily in recent years, with a GDP of $73 billion in 2023 and key sectors like mining, agriculture, and financial services driving growth. However, the business environment remains highly competitive and volatile, characterized by a youth unemployment rate of 11.5% as of 2023.
Companies are constantly adapting strategies to navigate economic challenges such as inflation, which peaked at 40.1% in October 2023, and fluctuating exchange rates. Despite this, many organizations overlook the critical role of culture in achieving sustainable success.
For instance, the financial sector has implemented a variety of strategies to stay afloat, including restructuring and adopting digital banking.
Yet, scandals like the banking crisis of 2017-2019, which saw the collapse of several banks due to mismanagement and a lack of trust, underscore the cost of neglecting organizational culture.
When trust and ethical behavior are absent from a company’s cultural fabric, even the best-laid strategies can crumble.
The Power of Culture in Ghanaian Businesses
Take the example of Kosmos Energy Ghana, a company that has embedded a culture of collaboration and innovation. Despite the challenges in the oil and gas industry, Kosmos has thrived by fostering an environment where all employees are encouraged to voice ideas, take calculated risks, and work collaboratively.
This cultural approach has paid off, with the company playing a significant role in boosting oil production to nearly 200,000 barrels per day in 2023.
In contrast, smaller startups and informal sector businesses in Ghana often prioritize survival strategies over cultivating a strong culture.
Yet, these enterprises could benefit from a more unified, supportive atmosphere where all hands hold each other up until success is achieved.
A Harvard Business Review study emphasizes that companies with a healthy, supportive culture see 4.1 times higher revenue growth. Imagine the potential for Ghanaian SMEs if they embraced this.
Lessons in Culture-Driven Leadership
One critical aspect this feature stresses is the culture of leadership. In Ghana, where traditional hierarchies often dominate, business leaders must embody the values they wish to see in their teams.
Authentic leadership, characterized by humility, transparency, and inclusiveness, can have a transformative impact. Consider Unilever Ghana, which has consistently ranked as one of the best places to work in the country.
The company’s focus on employee well-being, community engagement, and inclusive leadership has led to high retention rates and a reputation for excellence.
Strategies can be copied, Culture remains the true competitive advantage
According to data from the Ghana Investment Promotion Centre (GIPC), foreign direct investment (FDI) reached $2.5 billion in 2023, driven by sectors that emphasize collaborative and innovative work cultures.
In the manufacturing industry, Blue Skies Ghana has differentiated itself by investing in its workforce culture. By paying above-average wages and providing employee welfare benefits, the company has achieved significant productivity gains, with annual revenue exceeding $100 million.
On the flip side, companies that prioritize aggressive strategies without addressing cultural cohesion often suffer. The collapse of the local airline, Ghana International Airlines, in 2010 serves as a cautionary tale. Despite strategic investments, a toxic work culture and lack of cohesive leadership contributed to its failure.
Embracing the Power of Culture for Ghanaian Businesses
- Invest in People:
Culture is cultivated by investing in people. From leadership training to well-being initiatives, Ghanaian businesses must prioritize their workforce.
- Walk the Talk:
Leaders must exemplify the culture they wish to promote. Authenticity and transparency build trust and align teams.
- Measure Cultural Health:
Just as companies track performance metrics, they should measure cultural health through employee feedback and engagement surveys.
- Celebrate Success Together:
A culture of recognition and celebration fosters belonging and motivates teams to achieve more.
Conclusion
In a world where strategies can be copied and formulas can be mimicked, culture remains the true competitive advantage.
For Ghanaian businesses to thrive in today’s global marketplace, they must pay as much attention to how people work together as to what they are working on. By adopting and prioritising culture over strategy, Ghanaian companies can achieve lasting success, fostering an environment where all hands hold each other until the collective goal is realised.
