Culture vs. Strategy is a Contrived Debate: Why Your Business Needs Both an Empowering Culture and a Thoughtful Strategy for Long-Term Success
“Culture eats strategy for breakfast.” That’s been a popular saying in Silicon Valley for some time, and it has a certain mystique because it’s attributed to the legendary business guru Peter Drucker. But exactly what does it mean, and could it be true? Could strategy be overrated? And how can culture possibly be so important?
What is strategy?
Before we get further into this discussion, it might be useful to define our terms. As a starting point, Wikipedia informs us that strategy “generally involves setting goals, determining actions to achieve the goals, and mobilizing resources to execute the actions.” That sounds pretty good, but to further flesh out what strategy is, Ken Favaro, writing in strategy + business, adds this: “Strategy is different from vision, mission, goals, priorities, and plans. It is the result of choices executives make, on where to play and how to win, to maximize long-term value.”
I think that definition is brilliant, but in an effort to ground it a bit, I would add that strategy involves a high-level analysis of the current situation and how it’s expected to change, so that an individual or organization can make the best decisions about how to go forward to achieve specific goals, meet current and future challenges, and leverage present and expected opportunities.
What is culture?
Moving from strategy to culture, Shawn Parr provided a spot-on definition of corporate culture in a Fast Company article:
Culture is a balanced blend of human psychology, attitudes, actions, and beliefs… A strong culture flourishes with a clear set of values and norms that actively guide the way a company operates. Employees are actively and passionately engaged in the business, operating from a sense of confidence and empowerment rather than navigating their days through miserably extensive procedures and mind-numbing bureaucracy. (Emphasis added.)
And at least as important as describing what culture is, Parr goes on to describe what it is not:
Culture, like brand, is misunderstood and often discounted as a touchy-feely component of business that belongs to HR. It’s not intangible or fluffy, it’s not a vibe or the office décor. It’s one of the most important drivers that has to be set or adjusted to push long-term, sustainable success. It’s not good enough just to have an amazing product and a healthy bank balance. Long-term success is dependent on a culture that is nurtured and alive. Culture is the environment in which your strategy and your brand thrives or dies a slow death. (Emphasis added.)
That’s a clarion call for the importance of culture. Your company has a culture, and it’s either helping or hurting your firm’s performance on a daily basis. In fact, a company’s culture is critical to its long-term success, a caveat that too often seems to go unheeded by business owners, executives, and professionals. From law firms to Fortune 500 companies to tech startups, no business sector is immune from cultivating an unhealthy culture.
These “bad cultures” are frequently found in overly hierarchical (and often ego-driven) organizations in which the overriding concern appears to be fear of making a mistake or saying the wrong thing. In these firms, employees are not seen as valuable stakeholders and sources of inspiration, but as expendable parts and objects of suspicion. Whether these companies are barely turning a profit or are household names, they will never achieve their full potential with this type of culture.
What makes “bad culture” such a bad thing?
Signs of an unhealthy culture permeate throughout an organization. Such a firm’s customer or client service is typically uninspired at best, and is sometimes dismissive and outwardly rude. This, of course, runs counter to the cardinal rule of marketing, which is that a company’s top priority is to take care of its current customers. As we all know, repeat business and referred business are the very best kinds of marketing.
And with the ever-increasing reach and power of social media, it doesn’t take many unhappy customer service experiences to give a company a very public black eye. Throw in the fact that unhappy employees will happily share stories of a company’s bad culture with a global, social audience (including prospective hires), and it’s not hard to quickly see how harmful a company’s culture can be in keeping a firm from achieving what it otherwise might.
Advocates of corporate culture like to highlight companies such as Google, Nordstrom, Southwest Airlines, Whole Foods, and Zappos to prove that the right culture can make a good company great. There’s no question that the customer service is outstanding at these firms, all of which are leaders in their respective industries. Coincidence? Of course not. This makes me think of the old computer programming expression, “Garbage In, Garbage Out,” except that in these cases, it should be “Excellence In, Excellence Out.” Your firm will never be better than the people you hire, and the quality of the people you hire will be directly related to your firm’s culture.
So, culture is incredibly important. And given the combination of an increasingly competitive business marketplace, changing demographics and employee priorities, as well as the growing power of social media, culture’s importance will only continue to increase in the years ahead.
But does that mean that culture trumps strategy?
Favaro has skillfully addressed this issue in his post, Strategy or Culture: Which Is More Important? His conclusion is encapsulated in his subtitle, which states, “Although culture is much more than an ‘enabler’ of strategy, it’s no substitute for it.” Or, as he states in the article, “No culture, however strong, can overcome poor choices when it comes to corporate strategy.”
Strategy and success in marketing and business
And given that I named my company “NCG Strategic Marketing,” it should come as no surprise that I believe that strategy is critical, even though frequently strategy seems to be in short supply when it comes to both marketing and the business itself. I see far too many companies engaging in the short-sighted and dangerous practice of “random acts of marketing,” in which little or no thought has gone into their branding, their understanding of the marketplace, how they fit into it, or their selection and execution of various marketing tactics.
And then there are the ever-present “random acts of business,” AKA “Let’s do this because we can.” This can take the form of would-be entrepreneurs who have been told to (blindly) follow their passion, even if that’s only one of three essentials for a business to be successful (see Jim Collins on the Hedgehog Effect and the Three Circles). It can also be found in existing businesses that are headed down impulsive and ill-considered paths, costing them time, money, and focus. Examples of lack of strategic thinking are all around us.
So, while almost everything in the marketing world has changed over the last 25 years, one thing has not: the importance of having a strategy. In fact, we can go back 2,500 years and find that much of the wisdom of the Chinese military general Sun Tzu is still true today. Of his many popular maxims that have survived for several millennia, one of my favorites is, “Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before defeat.” In a nutshell, if Sun Tzu says that strategy is essential, who are we to argue?
And yet, sometimes the problem isn’t a bad or nonexistent strategy – it’s a bad culture. Jonathan Becher makes that point when he says, “In my experience a well-designed and well-implemented strategy cannot be effective unless people are motivated to support it.” He then backs up his assertion by discussing just such a situation, and how a laser focus on improving the company’s culture helped him to turn the company’s fortunes around. Sometimes, a company may have its strategy exactly right, but its culture is what’s holding it back. Of course, I can also think of many Silicon Valley companies that likely pride themselves on their culture, but the corporate strategy wasn’t nearly as well thought out. These companies are not built to last. Writing for Forbes, Mike Myatt strongly agrees with me on this, as well as on the larger takeaways of this debate.
Strategy and culture should feed each other
Ultimately, Favaro ends his post by saying, “Consigning strategy to just a morning meal for culture does injustice to both. Confining culture to the narrow role of “enabling” strategy prevents it from strengthening strategy by being part of it. It also weakens the power of strategy to turn your company’s cultural strengths into a source of enduring advantage.” I think the message is clear: In the best of all possible worlds, culture is both a part of strategy and a driver of it.
So, be sure you don’t let culture eat strategy for breakfast. But don’t make the mistake of thinking that strategy alone will get you to where you want to be. Instead, per Favaro, strategy and culture should feed each other. The main point is that you can have one without the other, but your business will never see its greatest and longest-lasting business success if you don’t focus on both of them.