Organizational culture and systems alignment in strategic change: the Kodak case

Systems thinking applies to organizational culture in a couple of ways. First, organizational culture is part of any management system. Culture is where the norms and standards of behavior are embedded, and these norms can dictate a wide range of individual and organizational behaviors. Companies need to understand that the culture affects the ability of the different systems to perform. There are many examples of failed organizational change efforts, scuttled by the reality that an organization's culture is not congruent with the change effort. For example, Eastman Kodak suffered substantially when technology threatened its core photography businesses. But decades of being a relatively unchallenged industry leader had created a culture that was built more around maintaining a business than innovating. It looks the leaders of Kodak a long time to accept that they needed to innovate to survive, and even when they reached this realization they were unable to get the rest of the organization on board, because the culture knew nothing of innovation -- Kodak was not even able to attract innovative people when it tried, because the culture was so deeply embedded in organizational behaviors and systems that inhibited innovative behavior.

Senge (2012) has noted that organizations rely on culture to help them learn and innovate, but that when the culture is not conducive to this, the organization's other systems will not matter. In systems thinking, all of the systems within an organization need to be aligned in order to achieve the strategic objectives, so when the culture is misaligned with the other systems, it is then much more difficult to drive strategy forward.

Systems thinking seeks to align structures and culture with goals -- these are interrelated components that require a high degree of congruence in order for the goals to be met. Thus, managers need to ensure that this alignment exists. Goals should reflect what the organization wants to achieve, but only if it can align the systems and culture. Changing long-time systems and culture can be difficult, and take time. But when this change process is undertaken, it is important for leadership of an organization to understand that all aspects of the organization -- both culture and systems -- need to be in alignment. A change to one will not bring the organization closer to its goals; a change in both is required.