Does Culture Really Eat Strategy for Lunch?

By Charlene Li - Aug 27, 2021 2:08:34 PM - 8 MINS READ

"You can have the best plan in the world, and if the culture isn’t going to let it happen,
it’s going to die on the vine."
- - Mark Fields
Former CEO, Ford Motor Company

Culture and strategy is a chicken 🐔 and egg 🥚 situation: Which comes first?

Is it more important to have the strategy (the outline of your objectives and how you plan to achieve them) or the culture (how your beliefs inform your behaviors) in place first to execute your vision?

I dove into this topic recently on my culture series. We explored why "culture eats strategy for breakfast" - or does it?

Ready? Let's dive in.

Why Culture Gets Ignored

When it comes to building an intentional culture, I hear the same excuses over and over:

  • “It’s not my job.” Executives are quick to assign “culture” to HR or the party planning committee. It’s great to have an employee dedicated to culture, but the firm’s leaders need to be involved, too.
  • “Strategy is our priority right now.” It’s easy to be hyper focused on the strategy: Where are you today? Where do you want to be in the future? How are you going to get there? But without a culture that lets you effectively execute your strategy, you won’t make much progress.
  • “Our focus is product market fit.” Startups want to nail product market fit (rightfully so!). But promising to “figure out culture later” can prevent you from finding the perfect product market fit.

Culture is everyone's job, and culture and strategy go together.

peter-drucker-culture-eats-strategy-for-breakfastThe famous management guru Peter Drucker often receives credit for this saying, and many executives seeking to transform their organizations adopted the adage, including Merck CEO Richard Clark and Ford CEO Mark Fields, among others.

The Integration of Culture and Strategy

Strategy and culture go hand-in-hand. But most leaders think one comes before the other.

Let’s say you believe strategy leads and culture will change as-needed to support strategy. Your mindset is: “If the strategy works, then our culture will complement it."

But if you want to create a disruption – for example, make faster decisions because the marketplace expects you to show up with newer, better products in a shorter cycle – you need a culture shift. You have to change the way you make decisions as a company to execute this strategy. You have to change beliefs and behaviors.

So the strategy execution depends on a change in the culture – to make decisions faster, the culture has to change as well. Uh oh!

Now, let’s say you put culture first so it leads and enables a new strategy (or at least doesn’t impede the strategy).

The end goal is still to execute strategy, of course. We’re not building company culture for its own sake! But unless there’s a strategic reason for beliefs and behavior to change, they will stay the same.

If there aren’t clear business strategy incentives to shift the culture, your strategy stalls. Similarly, if there are any incentives that reward staying with the old culture, it won’t shift. Uh oh!

You can see why it’s critical to bring strategy and culture together. You need both to create change in tandem for disruption and transformation.

Charlene-Li-Headshot-Red-Jacket"For me, culture is the beliefs that we have. It’s the way people show up. It’s how they sit in meetings and think about things. It’s how people collaborate and make decisions. The words we use, the words we say to ourselves and each other."

   -- Charlene Li, Leading Disruption

Culture and Strategy are Symbiotic

Without both strategy and culture being developed at the same time, you’ll miss out on opportunities to create the kind of transformations that help you achieve disruptive, innovative goals.

So how can you ensure you’re giving equal weight to strategy and culture – and developing them simultaneously?

  1. Make sure HR is involved in planning the strategy and culture. - For example: AI and automation are going to be integral for admin, customer service, transportation and more in the coming years. Is it better to hire an AI director in 1-2 years when you need one, or to start developing a high-performer today who could take on that mantle? Including HR in strategy and culture planning will help you foresee these needs and prepare for them in advance.
  2. Integrate culture change planning into the strategic planning process.  Ask yourself what culture changes need to happen to support your evolving strategy? The more disruptive your strategy, the more your culture will need to change to support it. What are the beliefs and behaviors that hold you back, that anchor the organization in the status quo? What new beliefs do you need to establish to move forward? 
  3. Leverage culture levers to support your strategy. Elements such as stories, symbols, and rituals act as scaffolding for a new way of thinking and being.

Above all, you have to truly understand your culture. Just like you’d assess your strategy, your market position, and the competitive landscape, you need to evaluate your beliefs and behaviors that make up your culture. Here are some pragmatic questions to ask:

  • How would you describe your culture? Describe the beliefs and behaviors.
  • Do employees describe it this way? Tap especially the fresh perspectives of new employees.
  • How are they aligned with each other? Where are the gaps?
  • What beliefs and behaviors do you need to jettison to move forward?

As you design your strategy, make sure you're considering your culture in lock-step. And, as you’re developing your culture, constantly ask yourself, “How is this going to impact the strategy?”

Otherwise, you risk missing out on the opportunities to drive disruption in today’s changing world.

join-the-conversation-leading-disruption-charlene-li

How PTO Exchange Reinforces Culture

Forward-thinking employers are always looking for ways to reinforce culture. How can HR and executive leadership reinforce a supportive, collaborative workplace that employees can brag about?

One way is to add PTO Exchange to the benefit mix. PTO Exchange is a highly differentiating benefit that gives employees more options to realize the value of their unused vacation, based on their own personal situation and priorities.

With PTO Exchange, employees can now exchange the monetary value of their unused vacation for: 

  • Retirement savings - including 401(k) and Roth 401(k) plans
  • Student loans - tuition and loan payment reimbursement
  • Cash-Out - help pay for unexpected bills
  • Travel - exchange for airfare, hotels and other travel
  • Leave-sharing - donate PTO to fellow employees who may need it
  • Donations - contribute to over 1.7 million charitable organizations in the U.S.

Request a Demo

Charlene Li

Charlene Li is a best-selling author, strategist, advisor and founder of Altimeter Group. Charlene helps leaders navigate disruption and organizational transformation.

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