Does Culture Really Eat Strategy?

Sure. Sometimes. Like humans and technology, they are optimized when coordinated rather than set against each other. JL

Ben Kobulnicky reports in Medium:

A company culture can’t exist if the company goes out of business. So good strategy is clearly important. But if culture becomes a powerful enough influence on the motivations of the workforce, the culture can actually negatively impact an organization to the point of jeopardizing its solvency and its future. Successful strategies enable business solvency, which enables an organizational culture to exist at all. In ideal situations, culture and strategy nurture each other in an ongoing cycle.

There’s a famous quote allegedly attributed to Peter Drucker, that “culture eats strategy for breakfast,” or something to that effect. It implies that you can set whatever course for your business you want, but it will be your culture- what your people believe and how they behave — that determines what will get lived out in the work. Culture isn’t inherently about work spaces and perks, like comfy chairs and ping pong tables; it’s about the habits people have formed, how they make decisions, how they respond to challenges, pressure and discomfort, and what they believe is good or bad for success based on what’s been incented, rewarded, reinforced, and possibly even punished in their workplace. Culture is what you have when the majority in your workforce act out the same set of beliefs even if they’re not the traits that are codified by your company.

And for precisely that reason, culture can be a powerful force in an organization, for better or worse.

As a result, there’s an ongoing debate about which is truly more important to deal with in a company trying to change its direction: the strategy or the culture? This “culture eats strategy” maxim warns of culture interfering with or contradicting strategy, which it certainly can. But we must remember successful strategies enable business solvency, which enables an organizational culture (of some kind) to exist at all. In fact, you might say that in ideal situations, culture and strategy nurture each other in an ongoing cycle.

Whether it remains a healthy cycle depends, but let’s just start by saying you get into the cycle by the business being relatively successful for some minimum amount of time.

How long that success or solvency continues is one of the primary factors that allows cultural behaviors and traditions to become ingrained, and those habits are what can potentially lead to problems with new strategy sometime down the road.

So in an existing business desiring to change direction, how do we reconcile culture and strategy? Can you just do the right strategic work, focusing on the right business goals in order to end up with the right culture or a new culture? Or do you have to start by addressing the culture to make sure it allows the right business actions — decisions and work — to get done? I’ve seen advice offered both ways.

Many people advocate that if you just get the strategy correct and execute on it effectively, that the right behaviors can’t help but follow, resulting over time in the right culture.

This reasoning goes, even if you don’t have the desired culture, you can get it as a side effect of just getting your core business right. And again, this perspective is correct in that success makes having a culture possible. It’s what sustains culture and allows it to survive.

Others take the opposite approach. They advise focusing on culture first to make sure it enables and doesn’t impede your new strategy. In fact, some would say culture is the actual enabler of the execution on any kind of strategy, that strategy is lived out through behaviors and actions, since that is what culture most often influences.

So this perspective is also correct in that culture does matter, often significantly.

At the same time, each side also has a valid critique of the other. Exclusively focusing on culture can’t be the end game. The business strategy, and executing on it, is understandably the primary objective.

Obviously, a company culture can’t exist if the company goes out of business. So good strategy is clearly important. But if culture becomes a powerful enough influence on the motivations of the workforce, the culture can actually negatively impact an organization to the point of jeopardizing its solvency and its future. And that’s certainly worthy of being addressed seriously as well.

So what’s the key to balancing these?

I think it’s about discovering the organizational landscape: figuring out first if the existing culture in your business is going to readily enable your strategy or not. Investigate what culture you really have, remembering that who people really are and what they truly believe are most revealed when uncomfortable or under pressure.

That honest analysis and evaluation is what will give you a clue if your culture will chew up and spit out your strategy.

And to that end, this is ultimately the lynch pin question to ask yourself about your culture: Can the culture be sustained by anything other than the successful execution of the strategy?

In other words, will behaviors be either actively or passively permitted and rewarded for activity other than execution of the strategy? If the answer is yes, you’re going to have a situation where culture can ignore or destroy strategy, because it can be sustained and emboldened by something else.

You’re going to have a climate for the behaviors of your workforce to conflict with or at least not contribute to achieving your strategy. To put it bluntly, if your culture can be fat and happy without needing to do that new thing, it’s not going to do it.

Now, I know that makes culture sound rather juvenile, but generally individuals in the workforce are not trying to be. They often just don’t understand how to behave differently. They don’t know what it feels like to live in a different culture. So let’s consider how such a gap between culture and strategy can be reconciled.

My favorite metaphor to explain how culture and strategy function together comes from Tanner Bechtel of XPLANE. He says…

“Strategy, in my perspective is our journey. It’s what we aspire and conspire to complete. It’s a conscious choice in direction. Culture is the landscape. A mile on pavement takes much less work, gear, and preparation than a mile through a mountain pass. The terrain (culture) must be considered when planning our journey (strategy), and the realistic perspective must be applied when planning. We wouldn’t want to take off across the Andes in tennis shoes and shorts. By understanding the terrain, we can intelligently plan a successful journey.”

Now at this point, some of you may say, “Yeah, I see it, and I understand why I need to address it.” But others of you may say “I’ll consider my culture, but not too much really. I don’t want to have to address my culture because, honestly, it’s serving me well. I like it the way it is.” Well, so long as you don’t like it more than staying in business, this is indeed another common question worthy of confronting: Can you change a strategy or execute on new strategies without shifting your culture? Sure, if your culture isn’t the primary thing holding you back; if it’s a culture that enables your strategy and execution work; if it’s a terrain suitable for such a journey, to borrow from Bechtel.

So, ultimately, resolving the strategy vs culture dilemma is about doing the hard work to figure out if the terrain that exists will either enable or prevent the right behaviors. You need to map your terrain, your culture.

Find what actually drives behaviors that lead to decisions and actions in your company. And if you discover the wrong behaviors in your culture, like the first step in any 12 step program, you have to own it — admit it as current state…and then ask yourself what’s sustaining it? From what are those ways of behaving being propped up? What allows them to live on? If that’s your real issue, perhaps it’s time to confront your culture, to make sure your workforce is schooled, incented, fed and rewarded by the progress toward and achievement of your strategy, and that in turn will begin to provide additional nutrition and momentum for your strategic journey ahead.

Confronting people’s beliefs and behaviors may be painful, but in the end, old habits being broken and retrained will prevent your shiny new strategy from being chewed up and spit out, and that will in turn allow the opportunity for the new and healthy culture you need.