Culture eats strategy for breakfast
“Culture eats strategy for breakfast.” Most attribute this quote to Peter Drucker, one of the most well-known thinkers and writers on management. This assertion may not be self-explanatory (or may even seem absurd!), so let’s unpack it together to see why that is the case.
Culture eats strategy for breakfast because, without a healthy culture in an organization, strategy execution will always be an issue. It doesn’t mean that strategy is not essential, however it does mean that it is not enough; dysfunctional organizations are less efficient and effective than healthy ones.
To put it differently, we could say that company culture is a strategy for executing its strategy; so it is a more fundamental behaviour. If it is so simple and evident, why don’t more organizations do this? And how long does it take to change company culture?
Execution problems
Patrick Lencioni, in his book The Advantage, distinguishes between “smarts” and “health.” Organizations generally hire smart, competent people, or at least those they can train to be qualified. As a result, most organizations are smart. And that is good, but it is not enough. Organizations need to be healthy too. Healthy organizations are those where there are minimal politics and confusion, high productivity, and low turnover among their best people.
When an organization is unhealthy, there will always be problems in the execution of its strategy. Why is this the case? For one, time is a limited resource. If we use it trying to navigate politics, confusion, one-upmanship, silos, and other dysfunctional behaviour, then we are not focusing on getting our work done. Even if all of our work is in line with that strategy, we will always fall short of what we need to be doing. Secondly, with dysfunction come alignment problems, and our efforts are dispersed.
In the Five Dysfunctions of a Team, Lencioni explains the first step for making an organization healthy: creating a behaviourally cohesive leadership team. An unhealthy leadership team will lack trust, fear conflict, suffer a lack of commitment and accountability, and will unlikely attain the results they are capable of achieving.
Healthy teams, however, will have high levels of trust and vulnerability; good conflict around ideas to find the best solutions; buy-in from all the team despite differences of opinion; the desire to hold each other accountable; and attention to results.
Once a leadership team is behaviourally cohesive, they can focus on the second step – creating clarity and alignment around six vital questions:
- Why do we exist?
- How do we behave?
- What line of business are we in?
- How will we be successful?
- What is the most important thing right now?
- Who must do what?
The third question is a pre-condition for strategy. If we don’t know what business we are in, our strategy will be off. The last three questions are imminently strategic!
- How will we be successful? = what is our strategy?
- What is most important right now? = What is our short-term strategy for executing our long-term strategy?
- Who must do what? = What part must each one play in executing the short-term strategy without neglecting operational needs?
As you can observe, there is no dichotomy between strategy and culture.
Dysfunction
It would help to see what happens when an organization is not healthy or dysfunctional and how it affects strategy execution.
Suppose your leadership team has an absence of vulnerability-based trust. In that case, the team will not be open with each other or admit their mistakes. They will fear conflict because they don’t know if they can trust others to say what they really think.
They will lack commitment, even though they might seem to “buy in.” Because they haven’t been able to share their point of view, it is easy for them to resort to sabotage, politics, or gossip. After all, they never really agreed with the decision in the first place (but they couldn’t say that in front of the team).
If someone doesn’t commit, how can you hold them accountable? After all, they had never bought in! And if they can’t be held responsible, where will the results be?
Now let’s imagine this team, which is not behaviourally cohesive, moves on to the six questions above. If they aren’t able to trust each other, have constructive conflict, etc., will that team be aligned in mind and heart at the end of that conversation or at any moment? Of course not! It would be like everyone getting into a rowboat and wanting to row in different directions
That is why “culture eats strategy for breakfast.”
If it is so easy, why doesn’t everybody do this?
Lencioni mentions three, which I think are spot-on:
The “Sophistication” bias
The “sophistication” bias states that we don’t do things because they are too simple. We think that, to win, we need to look for some obscure formula. That is focusing entirely on smarts, which is only one lung of the organization. The health lung is necessary too.
The “Adrenaline” bias
The “adrenaline” bias is when we think that if we find some tool, we will get quick wins, and the fruits will come. If not, we will try something else to give us another shot of adrenaline. This is like putting a band-aid on a deep, festering wound. At first, it covers the laceration, but then things get worse.
The “Quantification” bias
The “quantification” bias says that if we can’t put a number on it, we don’t know if it is worth doing. Since health is something that pervades every aspect of the organization, it is tough to quantify. Organizational health is a game-changer because it creates alignment, boosts morale and productivity, decreases confusion and politics, and helps you keep your best people. It will affect your bottom line for sure, and you may be surprised just how much!
Some people can also think that this culture stuff is too soft, and that it takes us away from getting real work done. It is true. It does take time. But you save so much time in the long run, because there are no confusion, politics, gatekeepers, etc. to navigate. There is clarity throughout the organization, and people tend to flourish and make better contributions to their organizations.
How much time does it take to make an organization culturally healthy?
Because each organization is different, it depends. What is certain is that you can start seeing massive changes within days, weeks, and months. Organizational health has a ripple effect that cascades through the organization when done right. It has a compounding effect because health begets more health and better results.
Can you do this in a particular department?
Absolutely! The department will see itself as part of the broader organization (e.g., the department’s strategy fits into an overall strategy for the organization), but this doesn’t mean that the department can’t become healthier and become more effective.
