Approx. 6 Min. Read

In my time in the military and business, I’ve worked in places with poor culture. Thankfully, not now. I’m fortunate to work with some great people. Working in an organization with a poor culture is challenging and often demoralizing. One learns quickly how healthy cultures shape organizational performance positively or negatively. Misaligned cultures slow organizations, detract from the corporate value, and create a chaotic atmosphere. Well-aligned cultures enable companies to carry out strategic initiatives, “feel” like well-oiled machines, hit organizational goals, and generate much-needed shareholder value. 

Culture is critical, but does it “eat strategy for breakfast?” as Peter Drucker suggests? Drucker is a well-known writer and FAR more credible than I am. He’s a legend. As great as he is, I do challenge the notion that culture eats strategy for breakfast. My challenge is not directed towards Drucker as much as towards individuals who miss the context. I oppose spreading that catchphrase with no context. Drucker provides in-depth context about this quote in his research and writing. The people that share the phrase do not. Many individuals that read the statement on socials don’t take the time to explore the context further. This pithy phrase is great for social media and comes with plenty of likes on LinkedIn. And no doubt sells plenty of books. But does that idea help your business? Let’s explore culture and strategy a bit and see what the relationship is.

WHAT IS CULTURE? “This is my gun, there are many like it, but this one is mine.” Full Metal Jacket (1987)

Culture is a critical aspect of organizational success. According to a Harvard study, organizations with positive cultures reported that organizations with strong cultures increased net income by 756% over eleven years. The study covered 200+ companies. Healthy and aligned organizational culture is good for the bottom line[1]. Good cultures enable teams to carry out strategies with more efficiency. Too often, I see new leaders discounting the value of cultural initiatives. Doing so is a mistake. 

Consider for a moment “culture companies.” Which ones immediately come to mind? Possibly Google, Zappos, Pixar, Disney, and Amazon. These are tech or service companies in the creative media space, technology, web, etc. You likely don’t think Northrup Grumman, Lockheed Martin, SAIC, etc. These are large aerospace and defense contractors typically near the top in market capitalization in that space. Both groups are highly successful. And both drive significant market value. Do you suppose Google and Lockheed share a culture? What about strategy? Answers are no and no. 

Healthy culture means different things for different companies. Two very successful companies, Google and Lockheed, both have their own cultures. While there may be similarities between them, they vary. Yet, each company is highly successful. My hunch is both organizations even claim to have “healthy” cultures. To set your expectations for this post, I’m not going to cover what a healthy culture is. There are a million blogs and books about that. For example, Google might suggest that an indicator of good culture is exercise balls, skinny jeans, and lattes. In contrast, Lockheed Martin or Northrup might suggest that indicators are business attire, quality certifications, and Folgers. Rather than define to you what “healthy” is, I intend to share what culture is and how it relates to strategy.

Organizational culture is a set of norms, beliefs, and reinforced behaviors that provide the framework for how team members interact with each other and their customers. That’s a very dictionary-like definition of organizational culture. Beyond those words, culture is felt and experienced through observation. Think back to some interviews in your past. Many times, if you look closely, the cultures in those organizations presented themselves during the interview. From the process, methods, questions asked, connection, and even body language we observe some elements of culture. If you sat in an interview with Google or a large aerospace and defense company, you would experience the contrasting cultures. We leave those interviews often with either a positive vibe or a negative vibe. Those norms, feelings, and behaviors collectively make up the culture of an organization. 

Every organization’s culture is either created and guarded by the leaders or, void of leadership action develops organically. The latter of which the organization does not control. My pastor in Alaska had a great thought about this. In his view, leaders are cultural architects in their organizations.

An architect makes sure there is alignment, flow, and efficiency in their designs. A good cultural design has the same. Strong leadership teams define what the culture needs to be considering the end goals and outcomes the organization must-have. In essence, leadership starts with the end in mind and designs an organizational culture around that end. Culture is an enabler of mission, vision, execution, goals, and strategy. Organizations need a well-aligned culture to carry out their key initiatives. 

STRATEGY:

The term strategy is amongst the most overused and misunderstood concepts in business today. The term sounds sexy. Strategic planning, strategic initiative, strategic meeting, strategic hire, strategic forecast, strategic marketing, strategic acquisition…I could go on. One article at Harvard Business Review suggested that strategy is a set of goals and policies, “simple as that.” Ask yourself these questions. If a racing team wants to win the race, what is their goal? Answer: To win the race. How do they do so? Answer: By going faster. How do they go faster? Answer: A dialed-in car, driver, pit crew, and overall teamwork. The goal is to win the race. The strategy is how you win the race. They are different. Here is another way to look at it. The United States’ goal was to win in Iraq/Afghanistan. The strategy included tailoring military and leadership tactics that leveraged strengths and mitigating weaknesses. To effectuate strategy, an organization must be wide open about what its strengths and weaknesses are, its current positioning, and what the ultimate outcomes must be. 

In the diary book, Meditations, Marcus Aurelius wrote and mused about the power of knowing oneself and understanding where you are[2]. If you don’t understand the universe, you don’t know who you are. Sun Tzu, in The Art of War, said that knowing your enemy and knowing yourself leaves little doubt in your future victory; “if you know heaven and know (the) earth, you may make your victory complete.[3]” I find the parallels between these two successful leaders and strategists fascinating.

More recently, in the book Good Strategy/Bad Strategy (Rumelt, 2017), the author similarly described strategy. “A great deal of strategy work is trying to figure out what is going on. Not just deciding what to do, but the more fundamental problem of comprehending the situation.[4]” 

At times, I get asked, “How did you guys grow so fast; what was your strategy?” To simplify it into one paragraph is tough. We examined where we were at, where we needed to go, what strengths we had to leverage, internal weaknesses to overcome, and external (competitors) weaknesses to exploit. To put it in terms like Marcus Aurelius and Sun Tzu, we were fully transparent with ourselves and defined a plan (strategy) that leveraged our strengths and advantages. To get there, we had to align culture and strategy.

THE RELATIONSHIP 

In the passage above from Sun Tzu, he continued his discussion. He started with knowing where you are at (strategic development) and ended with taking care of the troops (culture) by saying, “carefully study the well-being of your men and do not overtax them. Concentrate your energy and hoard your strength.”

I’m for both culture and strategy. Our job as leadership is to analyze with teeth-gritting candor where we stand in our strengths and weaknesses. We have a fiduciary responsibility to build a high-performing, value-generating organization. From a long-term perspective, organizations can develop a great strategy but fail to take care of people, fail to create an aligned culture, and ultimately set the company up for failure. Conversely, you can create a “healthy” culture that fails to deliver the strategy (lack of quality, accountability, etc.).  

The relationship between culture and strategy should be aligned, not in competition. Culture shouldn’t trump (or eat) strategy nor vice versa. These two aspects of organizational design should complement one another and serve to dominate the competition while hopefully being a source of fulfillment for your team. Culture must be crafted to meet the needs of the strategy and guarded with intensity. 

I think a key reason for the market performance of organizations with “healthy” cultures is a fundamental alignment between their culture and strategy. Leadership in those organizations relentlessly create, nurture, and guard culture so to effectuate and carry out an organizational strategy. 

NEED HELP?

Here are seven free tips if you’re not sure where to start in aligning culture and strategy. 

1. Start with the end in mind. What is your organization’s “must do?” Clarify that outcome in 4K.
2. Understand your “kill me now” issues. These are critical obstacles or challenges that could present as game enders for your organization. Be exceptionally transparent. 
3. Truly assess what your strengths are, organizationally. 
4. Define your action plans and activities that leverage your strengths toward the customer and against the competition. Eliminate any activity that isn’t focused there. If your goals and activities don’t help the customer, support the team, or drive value – why are you doing it?
5. Align policy procedures to your necessary outcomes.
6. Promote a tailored culture of alignment, reinforcing necessary behaviors that lead to your “must do.” If speed flexibility is a culture element you need, train teams to spot, hire and reward that talent. 
7. Put people first…always. Take care of them. Nurture, train, and develop team members.

BOTTOM LINE…AT THE BOTTOM

Culture doesn’t eat strategy for breakfast. I get the concept and message that the phrase is indicating. Culture is important; vital even. As organizational leaders, we have a heavy burden and responsibility to design and guard culture at almost all costs. I can’t, however, get behind the idea that it eats strategy for breakfast. Rather, culture is an enabler. For an organization to carry out its strategies, it must implement an aligned culture that enables its tactics. Many organizations find lightning in a bottle when culture and strategy align. 

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[1] Coyle, Daniel. The Culture Code. Random House UK, 2019.

[2] Aurelius, Marcus. Meditations. Unknown, 0AD. Apple iBook. https://books.apple.com/us/book/meditations/id1017410503

[3] TZU, SUN. ART OF WAR. Apple iBook. https://books.apple.com/us/book/the-art-of-war/id395534623

[4] Rumelt, Richard P. Good Strategy, Bad Strategy: The Difference and Why It Matters. Profile, 2017. Apple iBook