Monday, May 20, 2013

Is Culture Superior to Strategy

A great culture can support a weak strategy, but a weak culture cannot support a great strategy.

Culture is the way, behavior; attitude or approach to work adopted by or embedded among a group of people in the conduct of business. Every organization has a culture - defined or not. Actual culture is a function of actual leadership, starting at the top. While the strategy is a set of choices set by business leaders, following with a series of actions to compete for the future. We all heard 'culture eats strategy for breakfast', does that mean culture is more important than strategy?

1. Culture Eats Strategy for Breakfast 

Culture may be rooted in values, but it is expressed in practices and behaviors. The culture of an organization is comprised of many intricate and interconnected parts, including corporate strategy and related strategic goals, job roles, business processes, core values, communications practices, corporate attitudes and business policies. Culture therefore is or ought to be very dynamic - changes constantly.

  • Culture should be mainly generated by the organization's values and vision and the strategy is about how to take a position that allows it to deliver missions that move the company along the never ending road to delivering the vision. As such, the culture will only be as strong as the behaviors of the senior execs and the way they use these to demonstrate their commitment to the vales and vision on a daily basis. When this is done poorly, the real culture (as propagated by the employees, who out number the execs) is often misaligned with the fancy organizational statements and mood music.  
  • The right culture is a prerequisite foundation for implementing strategy. Culture precedes strategy. An organization's cultural orientation forms the basis for initiating and improving on strategies and sustaining it. In as much as both culture and strategy are important to an organization, it must have evolved its brand culture and strategy overtime to maintain it as well as improve upon it. Culture is like a brand, while the different components of the brand are aggregated to becomes the strategy for keeping that brand/culture unblemished.   
  • A great culture can support a weak strategy, but a weak culture cannot support a great strategy. Culture is one of the main factors that affect implementation of strategies. While successful strategy should also take account culture into enterprise even around the enterprise. A too strongly infused culture affects changeability negatively. A too weak culture infusion affects the ability to walk in one direction, and fill in the gaps when formal artifacts - such as strategy, processes and org charts - are not good enough. That doesn't mean culture always shapes strategy. Strategy leads an organization to success according to a clear vision, a strong ambition, a right analysis of all issues and parameters with culture of course. So the two elements are correlated with each other. When conditions become grim, it's culture (ingenuity, innovation, perseverance, helpful vs. competitive) that will carry the day. A diverse, open, and questioning culture will produce a viable strategy. On the other hand, a great strategy in a corrosive culture is doomed. 
  • Culture represents the 'ethos' of the organization, as it has evolved since its inception. Strategy represents the direction the leadership chooses to consider for future growth and orientation. Well-meaning strategy, which does not take into account of the organizational culture, cannot succeed, unless the intended changes in direction are also expected to influence culture. Culture brings speed to market, competitive advantage and defines your brand. Once that culture is established as part of the DNA of the organization then strategy can be implemented. A great culture can also help shape strategy, but you have to WANT to listen.
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  • "Culture eats strategy for breakfast” Did Drucker told us that culture is "stronger" than strategy? Why it's stronger is because people have accepted the culture internally, by definition, and it drives their actions. If they didn't identify with it, they would probably leave. And culture is more important because you can recover more quickly from mistakes in strategy if the culture supports these changes than you can from the culture that is maladapted to the evolving needs of the business or industry. Of course strategy can guide changes in culture. Since in established organizations this can take a long time, culture could be the place for a strategy to start. A key to effective strategy implementation is to achieve the same level of internalization and sense that this strategy is part of who we are. Then, the actions will also align with the strategy.

2. Strategy and culture are inextricably linked 

Being fully aware of the culture and its underlying values enables the strategy to be input to, validated and executed across the organization. When the strategy is developed with the insights of people/stakeholders in the organization then culture becomes the vessel that drives the ownership and alignment needed to guide the strategy. You can't guide a fluid book of business if culture and strategy are not inextricably linked. Culture is part of the strategy.

  • Strategy drives the business and also "defines" the culture you need to achieve strategy. Culture is the one thing that other companies can't copy quickly - it gives you competitive advantage, it fosters safety, it generates innovation, it encourages leading across boundaries, etc. Strategy doesn't do any of those things - simply calls for them. Thus, focus should be on mobilization
  • Effective Mobilization addresses Strategy and Culture, together as one. It combines the structure and direction of top-down strategy with the pragmatism and wisdom of bottom-up insight. This feedback loop reduces the resistance to change and the proactive participation allows the strategy to be rapidly and efficiently implemented. 
  • Strategy development requires understanding the current environment including the organizational culture. It requires an assessment of how the various factors (including the culture) help or hinder efforts to move to the desired end state. A successful strategy must account for culture's impact on implementation efforts if the strategy is to succeed. Stated another way, culture may dictate the methods and resources needed to implement the strategy. Also, the desired end state will include a culture, either the current one or some new one necessary to succeed in the new environment. Strategy implementation methods may have to deal with culture change as part of achieving the new end state. 
  • A strategy is very important but will only be successful if it is embedded into a company’s culture and if the culture is designed to implement the strategy successfully. Conclusion: a company must have a strategy that is focused on serving its markets/ segments with the defined services/products and a strategy to mold the needed culture accordingly while culture is certainly part of the environment in which an organization operates, it represents the 'box' in which actions and decisions occur. When an organization makes a logical decision to 'move outside the box' then cultural change is certainly part of the equation. However, if cultural change is not part of the strategy defining the change process, then there are limits to the execution of desired change, and what normally happens is a sub-optimized result. Strategies fail because they often do not address tough issues like culture. 
  • Some organizational strategies set the tone for the culture they want to develop. Other organizational strategies ensure the culture is continued. .Every company has a strategy - implicit or not. Culture must match strategy.  In the "Age of Discontinuity" strategies can shift, but culture must provide some continuity. So either you build a very strong culture that naturally evaluates and adopts presented strategic variables, or – if such a culture is not established – over and over again present and go through the key variables with all employees. But, of course, nothing beats the combination of a nurtured, functioning and good working organization culture with sound and well defined strategic variables. 

3. Strategy can be changed quickly, Culture can Take Long Time to Change

There are interactions between the strategic fundamentals, the style of the leadership, the systems of the management, the structures of the organization, the culture understanding, and the shared knowledge. Culture is tough and can take a long time to change because it may require leadership and change management practices. Strategy, on the other hand, can be regarded as the means to attaining and maintaining a position of advantage over adversaries through the successive exploitation of known or emergent possibilities rather than committing to any specific fixed plan designed at the outset. 

  • Culture can take a long time to change.  Culture change is like any other change – sometimes it is welcome, sometimes it is not, by people in the organization. For example, a high avoidance culture – it is a cultural profile that is hard to change because the very behaviors that need to change, the avoidance behaviors, generate avoidance of changing them. The challenges are: (a) analyzing and understanding the existing culture; (b) assessing the effectiveness of the culture; (c) understanding what changes need to be made in order to support the new strategy. It is imperative to understand what is/isn't working before attempting any changes 
  • Anyone deciding on changes to strategy in an organization need to ensure they are either (1) Consistent with the current culture, or (2) making a knowledgeable decision to buck the culture and move in a new direction. If you decide to buck the culture, you really need a strong leadership team supporting your effort, or you will lose. Strategic success without cultural agreement is nearly impossible. Short-term change may occur, but the 'silent majority' in the background will immediately begin to find workarounds, and wait for their time to simply revert to their normal comfort zones. 
  • A strong bond between these two elements will lead to success by goal attainment,. A strategy is the vision for how the goals or the “why” of an organization are achieved. Culture is the language in which it is expressed. A vision that cannot be effectively communicated will, ultimately, fail. However, culture without purpose is like an unbroken stallion. If those who are strategizing on change understand the culture clearly, and can estimate how that culture will evolve over some period of time, then they can use that timeline to their advantage in assuring successful change. In that instance, the effects of culture are not antagonistic or even competitive -- rather they become complementary, and should enhance success. 
Thus, culture and Strategy are inseparable. Without dynamic positive organizational culture, no meaningful achievements can be attained with any Strategy. A successful organization will create a symbiosis between these two elements to develop a cohesive realization of goals and communication of purpose. If there is no symbiosis between strategy and culture, the organization will not realize its goals. Worse, it may have difficulty in understanding why. Essentially; they are both equally important. And what is absolutely critical is that they are a matched pair.


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