“Culture eats strategy for breakfast” is a famous quote from legendary management guru and writer Peter Drucker. This clearly infers that culture is more important and more dominant than strategy.
In our view and our experience at Whitecap, having a clear, strong strategy is fundamental for all organisations. However, having an appropriate culture is a surer route to success. So, on the flip side, great strategies can be resisted by strong, non-aligned cultures.
In practice, these should not be mutually exclusive, and ideally should be mutually supportive. A clear strategy aligned with a strong culture can achieve more, with a strong sense of focus and purpose.
So, What Is Culture?
Culture is not as easy to define in the same way that strategy can be defined. Organisational culture covers a number of points including:
The way things get done around here
What behaviours are important or highly rated
How do colleagues treat each other
What’s allowed and what’s not allowed
Culture is part of the fabric of the organisation.
I’ve worked for a number of corporate organisations and I had two very simple reasons for understanding the culture:
How do I get things done? (Meeting the organisations aims)
How do I get ahead? (Meeting my personal aims)
For those who want to understand culture in more detail, Johnson and Scholes identified a number of linked elements that make up culture, but interestingly, they didn’t specify any one gold standard.
Where Does Culture Come From?
Leaders are role models. Leaders can be the people in positions of leadership or authority but can also be the people with “personality power” i.e. the informal leaders. By acting as role models, leaders send signals to the organisation about the norms and values i.e. culture is established through the examples set by these leaders.
Recently, there has been an independent inquiry into the culture in the House of Commons. Dame Laura Cox’s report described “an excessively hierarchical, ‘command and control’ and deferential culture, which has no place in any organisation in the 21st century”. This hierarchical culture has been maintained by leaders over time.
“If we want to be cost-conscious, we should do it, not just talk about how cost-conscious we are.” – Ingvar Kamprad
Earlier this year, Ingvar Kamprad the founder of Ikea died. He once said about Ikea “If we want to be cost-conscious, we should do it, not just talk about how cost-conscious we are.” Kamprad was one of the world’s wealthiest people. But instead of a chauffeur-driven limo, he drove an old Volvo and whenever he travelled by plane, even long haul, it was in economy. Rather than travelling by taxi, he was known to use Stockholm’s subway and public buses to take advantage of his pensioner’s discount. He was key in setting the culture at IKEA.
Apple’s organisational culture involves a policy of selecting only the best of the best workers. Steve Jobs was known to readily fire employees who did not meet his expectations. This tradition in Apple’s organisational culture continues under Tim Cook. Excellence is emphasised as a critical success factor in the business, especially in product design and development.
There are also numerous examples where leaders within an industry sector have allowed the industry culture to “go bad”. The “emissionsgate” or “dieselgate” stretched across a number of organisations who all had intentionally programmed turbocharged direct injection (TDI) diesel engines to activate their emissions controls only during laboratory emissions testing.
How Should Organisations Plan Their Culture?
Organisations should define what their appropriate culture should be, and how it should look and feel. This discussion should be part of the strategy development process and should be part of the senior team performance discussions.
The ideal is that the culture and the strategy are aligned – the perfect harmony of the egg and the avocado together on the breakfast plate!
Most of our experience includes clients wanting to bring about some change to the culture linked to their strategy development. Culture change is a major undertaking which can’t be covered in a short article, and each organisation will have a unique set of circumstances to consider.
However, here are three points that we think are imperative in any part of a culture change:
1. Define what the future culture will look like
Invest time in defining what the culture would look and feel like. This is likely to start with the leaders of the organisation discussing the change required, however, the conversation should continue with all parts of the organisation.
The discussions must be at a level of detail that allow colleagues to understand what the change is likely to mean. So, for example, saying that the organisation would need to have a more “innovative” culture is too ambiguous to be useful. This needs to be worked through in enough detail such that colleagues understand what innovative culture means for them.
2. Agree whether the culture change requires external stimuli
This is often a senior level discussion.
Quite simply, an external hire in the form of a “change agent” or “disruptor” is the sometimes the most appropriate or quickest way to move the organisation forward.
This discussion should also flesh out what the external hire would need to be successful within an organisation – this is likely to be some of the other parts of the culture that need to be “unfreezed”.
3. Be serious
Culture change requires energy and commitment. It can’t be undertaken from the side of a desk, and it needs the Board and the senior team to be fully invested.
Timing will never be perfect but aligning cultural change to strategy can provide the platform to drive forward.
Strategy and culture need to work together and need to be aligned – having a clear, strong strategy is fundamental for all organisations, however, having an appropriate culture is a surer route to success.
Hopefully you‘ve found this article useful. If you feel that your strategic planning would benefit from independent review and challenge, and would like to have a no obligation discussion, please get in touch with us here.
Established in 2012, Whitecap Consulting is a regional strategy consultancy headquartered in Leeds, with offices in Manchester, Milton Keynes, Bristol and Newcastle. We typically work with boards, executives and investors of predominantly mid-sized organisations with a turnover of c£10m-£300m, helping clients analyse, develop and implement growth strategies. And we work with clients across a range of sectors including Financial Services, Technology, Outsourcing, Consumer and Retail, Property, Healthcare, Higher Education and Professional Services, including Corporate Finance and PE.