Shared Understanding Creates Culture

July 8, 2019

While culture may "eat" strategy, shared understanding creates both culture and strategy, write Steve Figman and Sean Robertson.

We’ve heard it for years: “Culture eats strategy.” But what does that even mean? What does culture actually do for an organization? Culture is a vague concept, even when we try to address it head-on.  How do we know when we’ve achieved “culture”? How do we turn something so intangible into something valuable that produces meaningful, actionable ideas that get executed, delivering value to patients, health care providers, and shareholders?

Corporate culture consists of the things people in an organization believe, and the decisions they make as a result of their beliefs. We have found that while culture may eat strategy, shared understanding – an equally elusive concept! – creates both culture and strategy.

Much has been written about shared understanding, a state of organizational nirvana where every person has clarity on the big picture, knows how their own puzzle piece fits in, and acts accordingly. Unfortunately, when it comes to making their biggest decisions, leaders often neglect shared understanding until after decisions have been made,1 then implement change management for months afterwards to try to make people believe that the leaders made the right decision. Leaders must recognize that shared understanding is the platform from which complex problems get solved. It empowers a leader to ignite the potential within their own organization and beyond.

In a recent article, we identified and discussed five essential skills that will be necessary for pharma leaders of the future: 1) next-level partnering, 2) leadership without borders, 3) outcomes management, 4) innovation on demand, and 5) unravelling complexity. Each of these skills touch culture, but they sit above it.

What all these essential skills have in common is not technical expertise, subject matter knowledge, or even efficient best practices. What do they have in common is

• Developing an accurate understanding of the true business needs

• Leveraging the expertise of a diverse network of leaders and doers, advocates and naysayers

• Creating effective, enduring collaborations between the right variety of players to extract the best thinking from organizations

• Harnessing those collaborations to solve critical business problems quickly and successfully.

The common thread of these essential skills share is the core “master skill” of building shared understanding.  This master skill unlocks a leader’s other essential skills – along with power, creativity, and belief in themselves and their people. A leader may have some or all of the essential skills, but it’s knowing the necessary conditions for success – and how to tie them together – that really count.

Why is shared understanding so important?

No one individual has every piece of the puzzle when solving the complex challenges that define a modern leader’s job. No single person can possibly have all the information, relationships, or experiences that are needed. Each person’s knowledge and ability will always have blind spots. One person’s idea of the best path forward may be very different from that of someone else with a different viewpoint. Without successfully covering off on the inevitable blind spots through shared understanding, the chosen path forward can lead to eventual failure.

Senior leaders typically have a better overview of the problem to be solved than their less-senior colleagues, because they have access to more information and a broader idea of what’s happening across an organization. But often they don’t have a clear and current idea of the changing dynamics between patients and providers, or how digital technologies are truly altering the healthcare ecosystem. Senior leaders may not be aware of the latest changes within the detailed specialty areas that make up our complex, dynamic market, or how the value of the multi-generational workforce can be leveraged for competitive advantage. They don’t live those realities the same way that their front-line colleagues do.

While an organization’s cultural norms can help with many simpler problems, its culture is less helpful when facing complexity, because the range and scope of possible actions is far greater. Complex problems are unique, often without precedent.  The same type of challenge may have been solved before (dozens of therapeutics launch regularly; companies reorganize routinely) but conditions like resources, data, personnel, regulations, and competitive forces are never all the same. In the meantime, your competitors aren’t politely waiting for you to figure out your plan!

By bringing together the right players – the “requisite variety” of people with the necessary knowledge, experiences, influence, and insights – then properly orchestrating their collaboration, leaders can build the shared understanding platform for what they really need to do. They can make sound, innovative, and timely business decisions to solve complex business problems like merging very different pharma companies and integrating their cultures, increasing revenue while inspiring the workforce, changing the way cancer is diagnosed and treated, bringing competitors together from across the industry to tackle gender parity, and many other challenges. Without shared understanding, strategies are prone to gaps or misdirected efforts, tactics can be way off target, and teams can lack clarity. Stakeholders may be skeptical about the proposed solutions until (or even after) change management efforts finally begin to influence them, putting the timeline for results at risk.

Why is shared understanding so hard to achieve?

Success in our industry has always required collaboration, input from multiple sources, and an exchange of ideas. Pharma has prioritized “cross-functional alignment” and “organizational buy-in” for many years. In the quest to fulfill this important need, we find ourselves participating in a great many meetings, interviews, teleconferences, webinars, town halls, and offsites. More recently, the industry has been exploring co-creation, design-thinking workshops, and “going agile” in attempts to break down siloes and shorten feedback loops.

But how many times do we leave one of these meetings (after the typical fist-bumping and applause) only to realize later that the usual voices dominated, too many participants were multi-tasking throughout, proposed ideas were disregarded and left unexplored, groupthink prevailed, and next steps remained unclear? This happens despite attempts to set the tone with “no idea is a bad idea,” “idea parking lots,” and employing various other techniques for engaging people and encouraging their contributions. Cynical participants may believe that the real decisions were already made in advance, and that these engagements are theatre, not true collaboration. Dramatic shifts in how the business works can threaten people’s sense of security, predictably triggering “fight-or-flight” responses instead of stimulating critical thinking around what the business really needs. This is a major challenge in the pursuit of shared understanding. We can convene all the right players, but without careful orchestration of their interactions, it’s too easy to miss the opportunity to build real involvement and commitment.

Another major problem in building shared understanding can happen long after the meetings and calls are over, when critical new after-the-fact insights arise. They may come from new information, evolving thinking of meeting participants, output of additional stakeholder interviews, or even informal water-cooler interactions. But when and if these lagging insights are communicated, they are now out of context, isolated and diluted by the normal flow of other business concerns. How often have you had a flash of insight, only for it to be received with blank stares? Yet often, that’s how the most important strategic thinking develops.  Without a common shared understanding, moments of clarity and emerging-but-essential information may be dismissed or overlooked, wrong decisions can be made, and opportunities can be missed, which can be catastrophic when the stakes are high.

The thing that makes this all so hard is the same thing that makes building shared understanding the critical master skill of the future: time. It can take a lot of time to build shared understanding between key people about what’s really happening in the business, and what to do about it. And time is a very scarce business commodity especially today. Often, leaders face the choice between long delays to decision-making as their organization aligns, or critical decisions being made under pressure without reaching shared understanding.

Why worry about all this now?

Building shared understanding to solve problems has always been a challenge – but the current Age of Urgency2 has taken the need for timely problem-solving to a whole new level. Digitization, analytics and artificial intelligence, and other emerging technologies are redefining business timelines. The urgency imperative places a premium on quick, agile, decision-making and problem-solving in an ever more complex environment. In the Age of Urgency, we don’t have the luxury of multiple meetings and engagements to build consensus, backtracking to build understanding of stakeholders, or painstakingly integrating fragmented and hidden knowledge. Traditional problem-solving methods aren’t working well any more, and are becoming less and less effective as lack of time and lack of shared understanding compromise the very best efforts.

Researchers are quantifying the overall business impact of quicker decision-making processes. A recent McKinsey survey2 indicates that the quality and speed of decision-making are both strongly associated with company performance. They found that faster decision-making processes and execution are linked to higher returns. Perhaps counterintuitively, their survey results indicate that organizations that make decisions quickly are twice as likely to make high-quality decisions compared to slow decision makers who deliberate decisions at length. Unfortunately, surveys don’t reveal the secrets to success. Syntegrity’s deep experience operating in the new paradigm of accelerated shared understanding, decision-making, and igniting execution aligns with these results. But we know that simply jumping into fast decisions isn’t the answer – we need quality decisions as well.

Making faster, better decisions in today’s environment

First of all, we must recognize that building a shared understanding is the critical first step to solving complex business problems – not an after-thought. We must find a way to accelerate reaching shared understanding, in ways that traditional collaborative and consultative approaches simply cannot do. This doesn’t mean finding ways to do the same old thing faster – we need to do something different.

We need to embrace better approaches that are designed for sound, timely decision-making. The new business environment calls for a proven, scientifically-developed formula for shared understanding that does the heavy lifting yet works on an accelerated timeline, and pivots seamlessly from understanding from deciding.  

An accelerated approach to shared understanding must include these critical success factors:

• Starting with alignment on what’s being solved and why

• Using a flexible format with room for ideas and innovation to emerge

• Asking the right questions to get to the heart of the matter

• Orchestrating interactions, rather than leaving them to chance

• Building a common lexicon amongst participants

• Hearing all the voices, leveraging all experiences and knowledge

• Prioritizing all the possible actions

• Deciding specific actions and takeaways where people own the outcomes, with ability and desire to execute

• Empowering ambassadors who embrace the solution.

This accelerated approach is not just an abstract theory. It is a reality that is being applied every day around the world in winning organizations that have embraced a new paradigm. This innovative, highly effective approach to accelerated problem-solving is presented by David Benjamin and David Komlos in their new book Cracking Complexity.3  

What does shared understanding deliver?

In our work, we’ve seen that shared understanding, the first critical step of complex problem solving, brings important benefits beyond just speedy decision-making (a huge benefit in itself!).  Whether it’s increasing revenue, driving systemic change, changing the face of medicine, or the solving any other complex business problem, when teams work with a true shared understanding, the next steps become easier.

We said earlier that culture stems from what people believe, and how those beliefs guide their decisions. Shared understanding delivers a common source of truth – shared norms and beliefs – a culture that drives decision-making which is aligned with the mission. When solutions are created from the platform of shared understanding, the solutions are in the hearts and minds, and become part of the fabric of the organization. Because all the team members are bought in from the beginning, they are truly part of the solution, and co-creation becomes a reality. Leaders don’t have to keep covering the same ground to ensure that everyone is still bought in and committed, and it is far less likely for team members to become disengaged. When road bumps come up – they always do – people will go the extra mile to get things done, because they are invested in the project and are co-owners of its success. They consistently make better decisions, because they share a common truth to reference when facing inevitable uncertainties and challenges.

Teams with shared understanding know what really matters and what doesn’t. When urgent matters come up, they can prioritize effectively and keep things moving forward.

Teams with shared understanding can focus on developing and executing high-quality ideas. Innovation becomes a reality, not just a hoped-for development or something to say during investor presentations.

Lastly, people who enjoy shared understanding become ambassadors, proud of what “we” accomplish together, and eager to talk about it.

Conclusion

In summary, we see the need to operate with a sense of urgency – and we see that traditional approaches can take too long, with less-than-optimal results. The good news is that you can start to change all that tomorrow, regardless of your complex business problem, or how far along you are in solving it! If you begin with the master skill of building shared understanding then you will be able to adopt the accelerated, state-of-the-art problem-solving formula that many successful organizations employ. Shared understanding will accelerate, improve and solidify the strategies you need, and the culture you need to execute.  

References

1 Drucker, Peter F. “What we can learn from Japanese Management,” Harvard Business Review, March 1971.

McKinsey Organization Practice. “Decision making in the age of urgency,” McKinsey & Company, April 2019.

Benjamin, D., Komlos, D. (2019). Cracking Complexity. Boston, MA: Nicholas Brealey Publishing.

Steve Figman is the Worldwide VP, Head of Life Sciences, and Sean Robertson is Principal, Life Sciences, both at Syntegrity. www.syntegritygroup.com/pharma.