Culture and strategy can’t be served separately

We’ve all heard the Peter Drucker phrase “culture eats strategy for breakfast,” and really, if your culture isn’t properly aligned with strategy, you’ll get indigestion. Simply put, organizational strategy is the set of action steps put in place to achieve long-term goals and organizational culture is how and why work gets done. These definitions inextricably link culture with strategy, yet so often, culture does not support strategy and vice versa.

It’s difficult to grow as a business without creating a strategy, so of the two, it’s often the organizational culture that gets ignored. The problem is that organizations have cultures whether developed intentionally or by accident. You can’t hide from culture. Unfortunately, it is the poorly developed, accidental, and potentially toxic cultures that give the famous Drucker quote cachet. Bad company culture can ruin even the best strategy. Good company cultures can exist alongside strategy, but great company cultures are aligned with strategy and create accelerated growth. This is why it’s important to identify the target culture that will enable your strategy’s success.

The foundation of good culture
Certainly, there are elements of organizational culture that all companies should have regardless of strategy. Dignity and purpose are the foundation of any good culture. First, dignity – how we treat employees and how they treat each other is always important. A culture where employees blame, fight, cheat or simply disrespect each other may survive in the short term but will eventually fail. Low engagement levels, turnover and financial issues will soon make the workplace toxic. Next, purpose – why do employees do what they do? What drives them and are they aligned with the direction the company is going in? Without purpose, your organization bleeds energy – getting a fraction of each employee’s best.

OK, so every organization needs to establish dignity and purpose. Then what? Beyond those elements, we need to look to strategy to dictate our target culture. How we develop ideas and ourselves, how we collaborate and execute, how quickly we move – should each be dictated by company strategy.

Culture is truly something that leaders must care about,
and many already do. But we’ve seen so many times
that caring alone won’t help your profits, or your people.

Innovation? Not for everyone
Take companies looking to grow business through innovation. Curiosity and ideation will be critical to their success. One behavior beneficial in ideation is taking calculated risks. Employees must feel safe enough to take a chance on a new idea even if it might fail. After all, the heart of innovation is creating something that’s never been created before. If employees are punished for taking a risk on a new idea that doesn’t work out, they’ll be less likely to test or even to share new ideas in the future. For innovation seekers, risk taking is likely an important characteristic of culture.

Now, let’s contrast innovation-seekers with electric companies, many of which tout a safety-first culture and trumpet the importance of safety within mission statements. In a safety-first culture, risk aversion is understandably high. Does this mean that a safety-first culture is not as strong as an innovative culture? Heck no! If an employee at an electric company takes the wrong risk testing out a new idea, it could potentially result in massive power outages, serious injury, or even death. What is a key component of culture for one business, may be detrimental to another.

And then there’s collaboration, often thought of as a vital component of strong cultures. It makes sense doesn’t it? Every team has a culture, so it would stand to reason that teamwork be important for all cultures. Not so fast! There are a myriad of businesses and functions in which independent work will be valued over teamwork.

How often do you read a news article penned by multiple authors? Wouldn’t a teacher or trainer be more effective if they could independently tailor a presentation to fit their personal presentation/facilitation style? You may employ a team of programmers, but odds are they each prefer to write code by themselves. So do photographers, data analysts, lab technicians, accountants. Some employees are just meant to fly solo. Forcing collaboration upon these functions may result in a loss of efficiency, a watering down of individual style or voice, group think, and/or disgruntled employees who prefer to be autonomous.

Of course, collaboration is still core to many cultures. Firms looking to grow through mergers & acquisitions, continuous improvement, innovation, global expansion, even customer-centricity might all benefit from very collaborative cultures. When working with a newly acquired business, opening a new market, brainstorming and testing new ideas, or helping colleagues meet customer needs, how well employees work together matters. It just matters more for some organizations than others. When you link your target culture to strategy, you’ll know if multiple heads really are better than one, or if there are too many cooks in the kitchen.

Agility is the must-have
And then, above all, there’s agility. Once a feature of culture that might have been thought of as a “nice to have” it has lately become indispensable, and unavoidable. Economic and societal changes once thought unimaginable have taken place in just a few months. All organizations are now reaching for sustained agility in order to survive and thrive.

The extent to how quickly we need to move may be dictated by external forces like a global pandemic, but they can also be decided by strategy, if our goal is to outpace competitors. Whether we are able to proactively disrupt our industry by moving fast, or whether we can keep up with external changes will largely be determined by our culture. Whatever the goal, the more urgent it is, the greater the need to rally your workforce quickly behind it. Firms that value agility (which is really all firms, now) should already be exploring how strongly their workforce culture is aligned with their goals.

What culture needs
Culture is truly something that leaders must care about, and many already do. But we’ve seen so many times that caring alone won’t help your profits, or your people. Culture works best when it’s clearly defined, and clearly pointed in the strategic direction an enterprise wants to go.

For companies that want to grow and thrive, perhaps the better slogan is “strategy needs culture for breakfast.”

Ryan Cooke is a Strategist at CultureIQ

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