Survival strategies must suit organisational culture

As the outlook for the global economy looks increasingly precarious, it is time to focus on who will survive. Companies that do survive will be in a strong position to steal the market and pick up weaker companies very cheaply. But how can we tell which companies will survive and which won't; which strategies will work and which won't?

There are four basic organisational cultures - mercenary, networked, communal and fragmented. Each has its strengths and weaknesses, and each has to adopt strategies that suit its culture.

The networked culture typically exudes friendship and kindness. People genuinely like each other, and display high levels of empathy. There also is a high degree of trust. Typical organisations that fall into the networked culture are insurance companies, retail banks and utilities.

In times of change, the network culture is finding it difficult to react fast enough. It is not nimble enough to react overnight. Rapid cost-cutting and downsizing is likely to store up problems in the long run as it reduces the trust on which the company's survival depends.

But there is plenty of room for efficiency improvements. Equally, it is important to take views across the firm, as employees are likely to have plenty of ideas on how to improve efficiency.

The mercenary culture is ruthless, with a powerful drive to get things done. Goals tend to be at the forefront of people's minds. Winning is very important to the mercenary organisation. Communication is swift and to the point. Leaving before the job is finished is usually frowned upon. Value is placed on reacting quickly. Investment banks, sales organisations, fast-moving consumer goods companies and manufacturers typify this culture.

They can afford to cut costs more aggressively and rapidly than the networked company. They can also go for growth, and have an ability to refocus and renew. In the current climate they would do well to focus their efforts on growing key parts of their business. A dual strategy of growth and cost-cutting suits the mercenary culture well.

Within the fragmented culture people are not particularly friendly toward each other and they do not support the organisation; they work primarily for themselves. Work is often conducted at home or on the road. People associate more with their profession than the organisation. Communication is usually work-related and brief, and few meetings take place.

Fragmented organisations include professional service firms. The key problem for a fragmented organisation is its inability to work as a team. Moreover, when times get tough, people won't share clients as they become overly protective of their patch. Cutting the poorer-performing parts of the business may be the best approach.

The communal culture combines the friendship associated with the networked culture and the drive and ambition of the mercenary culture. Passion for the company and its products goes hand in hand with a strong sense of community and shared responsibility. Communal culture organisations have a work hard, play hard ethos. Office space tends to be shared and there are few barriers between functions. Because communal organisations have the focus of the mercenary culture and the friendship of the networked culture, they should be in a strong position to survive. But many are start-ups and this presents a real challenge, especially if cash flow dries up. The real benefit lies in their ability to focus and pull together.

Taking a hard look at their culture and then responding seems to be the best strategy for firms looking to survive the coming recession.

Dr John Ryan is a management consultant with Davis Langdon Consultancy; Mr Andrew Holmes is director of operational risk services at PricewaterhouseCoopers