Culture Eats Strategy

How much value to do you place on culture?

“Culture eats strategy for breakfast.”

This phrase, coined by management guru Peter Drucker, was made famous by Mark Fields, former president at Ford. And it’s so true. A business strategy will only work if it is backed by the organisation’s people and its culture.

But what does organisational culture mean?

Organisational culture encompasses the expectations, experiences, philosophy, norms, language, values, vision and behaviour of the business and its people. It’s that unspoken feeling people have when they arrive at work each day. We often think of culture as “the way things are done around here.” Culture the key to making things happen.

Is culture important?

Absolutely! Business valuations now typically rank culture and people as one third of a business’s value. The other two thirds are comprised of financials and systems and processes.

So, if you want to increase the value of your business by a third, it’s imperative you focus on organisational culture.

One way to do this is to conduct regular cultural surveys. Do you do this already? What do the surveys tell you? Do you have cultural benchmarks? If so, what do you do with these benchmarks? And if you don’t conduct cultural surveys, why not?

Businesses typically hire for skill and fire for fit. Fit is about culture. For staff to be the right fit, they not only need the right skills for the job, but their values and culture must also align with the company’s. The first step to getting this right is to identify your organisation’s culture. Only then can you recruit the right people with the right values and cultural alignment.

People leave managers, not jobs

Failure to provide management training is one sure-fire way to undermine an organisation’s culture. Typically, businesses take the best accountant, lawyer or builder and say, “Congratulations! You’re so good at your job, we’re going to make you a manager,” but then give these people no training for their management role.

Not only do managers need management training, but they also need training in how to live and breathe the values and culture of the organisation. Remember, good employees will leave poor managers if there’s no cultural fit.

Define your culture

So, just as you need to define your business strategy, you also need to define your cultural and capability strategies. When these three strategies align, they create true organisational transformation. They shine a light on where the organisation is going, how it will win, how it will differentiate and what capabilities it needs.

Once you define your culture, you need to live it. Ask yourself:

  • Do you recruit, reward, retain and remove staff based on values and culture?
  • What is your recruitment culture?
  • What is your retention culture?
  • What is your reward culture?
  • What is your removal culture?
  • How do you treat your clients and stakeholders? Is this aligned with your culture and values?

Culture is top down. How you behave is how the rest of the organisation will behave. Are you a micro manager? Are you a dictator? Do you over or under analyse? How does this affect your people and your culture?

If you don’t feel confident that you’ve got the right organisational culture, it’s critical you engage an advisor to conduct a culture survey. Then, as an executive team, you can develop strategies to improve your culture, which will, in turn, improve your performance, productivity and profitability.

A cultural capability and competency score is essential to getting clarity on your organisational culture.

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