Debate and difference of opinion, lightly salted with an appropriate amount of passion and tenacity can, help lead to significant breakthroughs. In the world of corporate correctness we are all living in, this should be highly encouraged. I really appreciated Bob Frisch’s response to my recent article on the importance of culture. Though I think he missed the point, the overwhelming number of people who embraced the notion that culture is imperative for sustained success is an indication of the importance of this issue and the opportunity culture offers for positive change.
People matter. More than machinery, products, and real estate. People invent and build. People support and serve customers. Your people either create or undermine value, cultivate or kill relationships, drive or reduce success. A well-conceived strategy living in the hands of unhappy, misdirected, misinformed people is a sure way to a slow and painful death. There is no comparison to being in the hearts and hands of energized, informed, and motivated people.
Companies are not linear, inert systems. They are ever-changing, organic communities that are dependent on the engagement, talent, and energy of their people to operate successfully. Ignore the mental well-being of your people and culture at your own peril. Step inside of any company, no matter the size, stage of development or level of success, and the culture is either driving the strategy or undermining it. To exist in the first place, a company must have a clear purpose, a deliberate intent, and a directive or set of ideas that it uses to pursue a clear goal, but it’s the people who have to execute it.
There is abundant evidence in every industry that the best-laid plans (or strategies) are derailed, suffocated, or eaten by cultures that either don’t understand or straight-out reject the intent. And this, in turn, slows, sucks the life out of, or sabotages the implementation or execution of the company’s strategy.
For the sake of debate, let’s assume there are two kinds of companies in the world. Those driven by strategy, where culture is not a priority, and those guided by a clear strategy where culture is highly valued and universally understood. To help clarify what’s important, let’s look at the relationship between culture and strategy.
Every company needs a clear strategy……. really?
You don’t need to be told that a company must have a clear reason for being and a plan of action. But, you might be surprised by how many companies lack strategic clarity, and whose only purpose is to make a profit. To be clear, making money is absolutely imperative, but it is just one of the outcomes of a successful company.
Competitive differentiation and optimal financial performance do not come from strategy alone. To ignore the potential of a fully engaged and mobilized culture that understands, embraces, encourages, executes and enhances strategy is negligent and a missed opportunity. It is imperative that today’s leaders not only understand and focus on the interdependence of strategy and culture, but also step back and examine their own role—it is one of the most important areas of their personal responsibility. The mental and physical health of the company in their care must be paramount for sustainable success.
Strategy is rational and culture is emotional
Strategy, at its core, is rational, logical, clear and simple. It should be easy to comprehend and to talk about. Without a clear strategy, a company is lost. Culture, on the other hand, means different things to different people. It is emotional, ever-changing and complex. Culture is human, vulnerable, and as moody as the people who define it. It can be intimidating and frustrating, often leaving leaders dodging it, neglecting it or discounting it. Because so many large companies are run by people whose expertise is heavily skewed to the rational, financial, and legal side of the equation, culture is often subordinated, misunderstood, or underappreciated.
Every company has a culture, but not every culture is healthy
Culture is the environment in which the intent of your company is nurtured, fueled, restricted, or suffocated. Every company has a culture and its health should be monitored and cared for. Cultures reach their full potential when the people in the trenches doing the day-to-day hard work understand the game and are fully-informed and engaged. Healthy and vibrant cultures are directed, purposeful, vibrant, optimistic, and highly-successful because they are fueled by the company’s larger purpose and supported by the capability to follow through. A company with a healthy culture is able to operate at its fullest potential while one with an unhealthy culture operates far from its best.
Every culture needs a visionary leader
Like a great coach, a leader’s job is to clearly set the intent for the journey, model the correct behaviors, lead with an understood set of values, communicate clearly and with sincerity and set clear expectations and guardrails for the culture to thrive within. It’s the team’s job to bring their best game every day and to execute the game plan to the very best of their ability. Like any great sports team, a culture is built by motivation, communication, training, encouragement, and celebrating both small and significant successes.
Culture is the field on which the strategy plays. A vibrant and functional culture is like a blanket that embraces, protects, and nurtures the strategy. A company without a strategy lacks direction. A strategy without a culture that understands or embraces it is like a sports team without spirit.
Understanding the relationship between culture and strategy
1. Strategy drives focus and direction while culture is the emotional, organic habitat in which a company’s strategy lives or dies.
2. Strategy is the headline of the story and culture needs a clearly understood common language to embrace and tell the story that includes mission, vision, values, and clear expectations.
3. Strategy is about intent and ingenuity and culture determines and measures desire, engagement, and execution.
4. Strategy lays down the rules for playing the game and culture fuels the spirit for how the game will be played.
5. Strategy is imperative for differentiation but a vibrant culture delivers the strategic advantage.
6. Culture is built or eroded every day. How you climb the hill and whether it’s painful, fun, positive, or negative defines the journey.
7. When culture embraces strategy, execution is scalable, repeatable, and sustainable.
8. Culture is a clear competitive advantage.
9. Culture must be monitored to understand the health and engagement of your organization.
10. Strategy and culture both require the clarity and power of brand to bring them seamlessly together.
Photo: Stefan van Bremen