Organizational culture’s relationship with organization’s strategic direction

Strategy is organization’s overall plan to win in its marketplace. Culture is the sum of the beliefs and behaviours organization’s employees bring to work every day. Operations are simply how things get done at the organization.

The most frequent mention of the relationship between organization’s culture and organization’s strategic direction can be seen in Peter Drucker famously statement, “Culture eats strategy for breakfast.” This is often interpreted as culture being more important than strategy.

It should be noted that strategy is not what the organization is trying to do (those are organization’s  goals), but rather it is how the organization plans to do it, and the organization’s culture determines how it actually works. The culture is how the strategy is executed To make it work, the organization has to ensure the availability of resources, including the time and commitment of the top management. It’s not enough to have a great strategy or a great culture; they have to be one and the same.[1]

Ken Wilcox, Chairman of the Silicon Valley Bank gave a compelling talk on the topic here. A few excerpts:

I believe that the most important things that a company can focus on are its strategy and its culture.  I also think that if you had to pick between the two, that culture trumps strategy every time. 

I think that because if you have a great culture, your people will develop a strategy that will win.  But if you don’t have a good culture, even a winning strategy will not be useful.[2]

Strategy, culture, and operations and inter-dependent, are  simultaneously impact each other.

Developing an effective strategy and culture is fundamentally about asking the right questions:[3]

One can find a wide array of literature that establishes the relationship between organization’s culture and the organization’s strategic direction, across a wide spectrum of parameters, including the context of the organization and the needs and expectations of the organization’s interested parties.

One more inference that can be drawn is that whatever form the relationship between organization’s culture and organization’s strategic direction shapes, in order to attain the sustained success, the culture and strategy should seamless aligned.

    • Strategy drives focus and direction while culture is the emotional, organic habitat in which a company’s strategy lives or dies
    • Strategy is about intent and ingenuity and culture determines and measures desire, engagement, and execution
    • Strategy lays down the rules for playing the game, and culture fuels the spirit for how the game will be played
    • Strategy is imperative for differentiation, but a vibrant culture delivers the strategic advantage
    • When culture embraces strategy, execution is scalable, repeatable and sustainable

Organizational culture is eating what it kills, when it is misaligned  – such as strategy, change management, innovation, operational efficiency, lean process and even including vision and mission. Culture trumps strategy every time![4]

There are seven ways organization’s strategy, culture, and operations can align with each other

One can think about which alignment sounds most like your organization:

Alignment 1 – Strategy Rules! – The culture and operations should be integral parts of company’s strategic plan development.

Alignment 2 – We Decide, You Do! – Brainstorm why some of the company’s initiatives underperform?

Alignment 3 – The Dream! – The dream – or even the vision -has not been translated into an executable game plan.

Alignment 4 – Silo / Turf War! results when your culture and operations are in alignment, but there is no common overall strategy. Each unit / department creates and act on the strategies they individually create.

Alignment 5 – Culture is King!– . No one knows how operations fit into the big  picture of the strategic outcome? An overall balance is needed.

Alignment 6 – Everyone’s on Board, I Hope It Works! results when the culture and strategy are in alignment, but with the operations, it is like rolling a dice, thinking it should work.

Alignment 7 – Sustained Results! When the strategy, culture, and operations are aligned, five things are crystal clear:

  • You know who you are.
  • You know where you are going.
  • You know how you will get there.
  • You know when you will get there.
  • You know you will have sustainable, scalable results.[5]

Here are a few videos that capture these discussions in the form of live discussions-

Culture vs. Strategy provides the basics.

Culture Eats Strategy for Breakfast – Bob Faw discusses how to align your strategy with your culture for successful change efforts. Increase passion and profits with these ideas.

Strategy and Culture – The Secret Ingredient for Successful Enterprise Strategy – Regina Perkins, @ Cascade’s Engage Conference 2019 – Portland Oregon, discusses the five key conversations to building successful strategies and how culture underpins all of it. These are: the current state of the organization, the environmental constraints that act against them, what is at stake for the organization if the status quo persists, the desired future state, and the strategy that will move the organization from the current to future state.

However, the alignment of those five conversations is not enough. With a shared perspective to the desired future state and the strategy to achieve their objectives, leaders must intentionally account for culture and introduce and enact their strategy within that context. Defined as the line that separates the behaviors that are tolerated from the behaviors that are not tolerated within an organization, culture is the biggest off-balance sheet asset an organization has. Culture dictates what plans, strategies, and ideas get enacted. Strategy without the consideration for culture will fail to realize its full potential, to create impact and stimulate meaningful change.

Drawing upon deep experience helping organizations develop and implement successful strategies, this talk explores how culture underpins any successful strategy implementation.

Despite the critical importance of culture, strategy and infrastructure, what eats them all starts with whether or not you have a “healthy organization.” If you want to understand what is meant by healthy organization, watch the short video of Patrick Lencioni, author of some of leadership books including The Advantage..[6]

[1] Strategy Is CultureLuke Kanies

[2] Why culture trumps strategy

[3] Strategy / Culture Bicycle

[4] What is the relationship between corporate culture and strategyTorben Rick

[5] 7 Ways a Winning Strategy, Culture, and Operations Deliver ResultsWayne

[6] Culture vs. Strategy vs. Infrastructure? Which Wins in Health Care?