Here we are at the end of another year, and I’ve been asked to write a short blog on one key talent issue businesses can’t ignore in 2017—here goes.

Business continues to evolve. Industries consolidate, new businesses arise to displace established businesses, new business models are created that rely much less on financial capital and physical assets. New technologies upset the “norm,” and to make it more interesting, investors are becoming increasingly active and vocal. And these challenges occur in a globally connected and globally competitive context. To be effective, a leader must constantly evaluate the current market situation and anticipate where the business is headed. Innovation and agility are important, if not imperative. There are many things that need to be done flawlessly to make your business successful. 

HR leaders must fully understand the business strategy and direction and align their products, services, and processes accordingly. We must also develop and execute plans to continuously improve service delivery, keep current on regulatory issues, and make sure the workforce is fully engaged. Career planning, diversity and inclusion, performance management, leadership development, talent acquisition, human capital analytics...the list goes on and on. There are many things to focus on, but if I were going to zero-in on one thing that would make the most difference it would be getting very deliberate about the culture of the organization. 

Why culture? Well, it’s the one thing that fundamentally determines success for the enterprise. We’ve all heard the Peter Drucker quote “culture beats strategy”. And MIT psychology professor Edgar Schein, in his book "Organizational Culture & Leadership” writes: "Culture determines and limits strategy.” 

In a 2011 HBR article, “Culture Trumps Strategy, Every Time,” Nilofer Merchant sums it up:

The best strategic idea means nothing in isolation. If the strategy conflicts with how a group of people already believe, behave, or make decisions, it will fail. Conversely, a culturally robust team can turn a so-so strategy into a winner. The “how” matters in how we get performance. These issues of trust, conflict resolution, and co-ownership are foundational for how a team gets work done. Culture is the set of habits that allows a group of people to cooperate by assumption rather than by negotiation. Based on that definition, culture is not what we say, but what we do without asking. A healthy culture allows us to produce something with each other, not in spite of each other. That is how a group of people generates something much bigger than the sum of the individuals involved.

So, the one thing I would focus on in 2017: Culture.

Read more 2017 talent predictions by other thought leaders.