Strategy and culture need to come together and be balanced within organisations to help create great places to work and sustainable business success, writes Jon Williams
One of the most damaging phrases bandied about as a management truth is the old chestnut that “culture eats strategy for breakfast”. Not only does it seem that Drucker never actually said this (the closest we can find is Edgar Schein’s “culture constrains strategy”) but it also sets up an unhelpful either/or view of strategy and culture, as if they were in some sort of battle for supremacy.
Instead, we believe that organisations which design their strategy to reflect their unique cultural attributes AND over time shift their culture to match strategic intent are far more likely to execute successfully.
We define strategy as the combination of an overarching approach and connected actions, designed to overcome a significant challenge. The process of arriving at a strategy requires a combination of understanding the challenge you are facing; building a hypothesis about the underlying causes and then creating an approach and actions to successfully counter the challenge.
Traditionally this strategy work is carried out by expert consultants, external to the organisation, who are brought in periodically to do the industry analysis and to import ideas and models they have seen work elsewhere.
“Neither culture nor strategy eat each other for breakfast”
Unfortunately, for the most part, this approach no longer works. As business and competitive cycles get shorter the expense of constant rounds of external advice becomes prohibitive, particularly in a low-growth and return economy.
But beyond that, it turns out that organisations are simply better at responding to new headwinds and opportunities if they designed their original strategy themselves; cost and headcount reductions are less likely to creep back in if the original decisions were taken inside the organisation; and people are more likely to invest personally in the success of a strategy that they themselves have had a hand in creating.
And above all, strategies that are designed by people with a deep, everyday understanding of how their organisation actually operates are far more likely to work than those built outside-in by consultants who don’t really ‘get’ the organisation.
If culture is the way things get done and decisions get made, then in part this can happen by osmosis. The prevailing culture of an organisation simply shapes how executives and employees think about strategy itself. But, this alone isn’t enough – there is also a role for deeply understanding and communicating the pros and cons of your existing culture to make sure the strategy is right, not just for your industry, geography, capital constraints and market, but also for the unique human capabilities, quirks and attributes of your organisation.
“Many organisations have treated culture as if it is a thing apart, owned by the HR function and based around abstract principles of what constitutes ‘good’ culture”
On the other hand many organisations have treated culture as if it is a thing apart, owned by the HR function and based around abstract principles of what constitutes “good” culture. Think of all those brightly coloured circumplexes consigned to the “teamwork” offsite and ignored at the strategy one. In reality, very few cultures are either purely good or bad, they just do varyingly good or bad jobs of helping to deliver your strategy. And where a long-term strategy has been laid out, the job of culture is to adapt to help deliver it.
So, neither culture nor strategy eat each other for breakfast. Instead they are more like an odd couple that somehow have to find a way to get along for your organisation to be a success. One can be changed quickly, the other evolves relatively slowly over time. One can be articulated crisply in a document, the other can be hard to pin down. But both should be felt in every part of the organisation, shaping interactions, guiding decisions and delivering results.
Without a good strategy, culture is an empty ideal. Without a supportive culture, strategy is an idea that will not come to life. With both in balance your organisation has a chance of being not only a success, but also a great place to work. And that is sustainability in action.
5 questions which will help develop an informed business strategy
So, you are in a “business strategy” offsite and the finance person and the head of strategy are dominating the conversation with financial projections, 5-year horizons and optimistic future scenarios. Here are the 5 questions you need to ask:
- Do we have examples where we have actually executed something similar to this in our organisation before? If not, what stopped us? If so, where in the organisation – what can we learn?
- Compared to our competitors, what is unique about us as an organisation that means we are better placed to pull this strategy off than them?
- What mix of capabilities and attitudes will we need to achieve this strategy? Do we have them? Where could we get them from?
- Do we have the leaders across our business to inspire our people to behave differently and bring this strategy to life?
- If the answer to any of the above is “no”: Should we change the strategy or can we shift the culture?