Culture Eats Strategy For Lunch

Get on a Southwest flight to anywhere, buy shoes from Zappos.com, pants from Nordstrom, groceries from Whole Foods, anything from Costco, a Starbucks espresso, or a Double-Double from In N' Out, and you'll get a taste of these brands’ vibrant cultures. 

Culture is a balanced blend of human psychology, attitudes, actions, and beliefs that combined create either pleasure or pain, serious momentum or miserable stagnation. 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. Performance-oriented cultures possess statistically better financial growth, with high employee involvement, strong internal communication, and an acceptance of a healthy level of risk-taking in order to achieve new levels of innovation. 

Misunderstood and mismanaged

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. 

Think about it like a nurturing habitat for success. Culture cannot be manufactured. It has to be genuinely nurtured by everyone from the CEO down. Ignoring the health of your culture is like letting aquarium water get dirty. 

If there's any doubt about the value of investing time in culture, there are significant benefits that come from a vibrant and alive culture: 

  • Focus: Aligns the entire company towards achieving its vision, mission, and goals. 
  • Motivation: Builds higher employee motivation and loyalty. 
  • Connection: Builds team cohesiveness among the company’s various departments and divisions. 
  • Cohesion: Builds consistency and encourages coordination and control within the company. 
  • Spirit: Shapes employee behavior at work, enabling the organization to be more efficient and alive.

Mission accomplished

Corporate culture is a hot topic among businesses who want to attract the best talent, translate their values to their products and services, and show customers what they're all about. And it doesn't cost a thing:

»Culture Isn't Costly

»Box CEO Aaron Levie: To Create Something Exceptional, Do Sweat The Small Stuff

»3 Secrets To Recruiting Tech Talent In Tough Markets

»What Happened When UC Berkeley's B-School Cherry-Picked Students Who Personify Its Values

»Creative Cultures On Co.Create

Think about the Marines: the few, the proud. They have a connected community that is second to none, and it comes from the early indoctrination of every member of the Corps and the clear communication of their purpose and value system. It is completely clear that they are privileged to be joining an elite community that is committed to improvising, adapting, and overcoming in the face of any adversity. The culture is so strong that it glues the community together and engenders a sense of pride that makes them unparalleled. The culture is what each Marine relies on in battle and in preparation. It is an amazing example of a living culture that drives pride and performance. It is important to step back and ask whether the purpose of your organization is clear and whether you have a compelling value system that is easy to understand. Mobilizing and energizing a culture is predicated on the organization clearly understanding the vision, mission, values, and goals. It's leadership’s responsibility to involve the entire organization, informing and inspiring them to live out the purpose the organization in the construct of the values.

Vibrant and healthy

Do you run into your culture every day? Does it inspire you, or smack you in the face and get in your way, slowing and wearing you down? Is it overpowering or does it inspire you to overcome challenges? It's important to understand what is driving your culture. Is it power and ego that people react to, and try to gain power, or a culture of encouragement and empowerment? Is it driven from top-down directives, or cross-department collaboration? To get a taste of your culture, all you have to do is sit in an executive meeting, the cafe or the lunch room, listen to the conversations, look at the way decisions are made and the way departments cooperate. Take time out and get a good read on the health of your culture.

Culture fuels brand

A vibrant culture provides a cooperative and collaborative environment for a brand to thrive in. Your brand is the single most important asset to differentiate you consistently over time, and it needs to be nurtured, evolved, and invigorated by the people entrusted to keep it true and alive. Without a functional and relevant culture, the money invested in research and development, product differentiation, marketing, and human resources is never maximized and often wasted because it's not fueled by a sustaining and functional culture. 

Look at Zappos, one of the fastest companies to reach $1 billion in recent years, fueled by an electric and eclectic culture, one that's inclusionary, encouraging, and empowering. It's well-documented, celebrated, and shared willingly with anyone who wants to learn from it. Compare that to American Apparel, the controversial and prolific fashion retailer with a well-documented and highly dysfunctional culture. Zappos is thriving and on its way to $2 billion, while American Apparel is mired in bankruptcy and controversy. Both companies are living out their missions--one is to create happiness, and the other is based on self-centered perversity. Authenticity and values always win.

Uncommon sense for a courageous and vibrant culture

It's easy to look at companies like Stonyfield Farms, Zappos, Google, Virgin, Whole Foods, or Southwest Airlines and admire them for their passionate, engaged, and active cultures that are on display for the world to see. Building a strong culture takes hard work and true commitment and, while not something you can tick off in boxes, here are some very basic building blocks to consider:

  1. Dynamic and engaged leadership
    A vibrant culture is organic and evolving. It is fueled and inspired by leadership that is actively involved and informed about the realities of the business. They genuinely care about the company's role in the world and are passionately engaged. They are great communicators and motivators who set out a clearly communicated vision, mission, values, and goals and create an environment for them to come alive.

  2. Living values
    It's one thing to have beliefs and values spelled out in a frame in the conference room. It's another thing to have genuine and memorable beliefs that are directional, alive and modeled throughout the organization daily. It's important that departments and individuals are motivated and measured against the way they model the values. And, if you want a values-driven culture, hire people using the values as a filter. If you want your company to embody the culture, empower people and ensure every department understands what's expected. Don't just list your company’s values in PowerPoints; bring them to life in people, products, spaces, at events, and in communication.

  3. Responsibility and accountability
    Strong cultures empower their people, they recognize their talents, and give them a very clear role with responsibilities they're accountable for. It's amazing how basic this is, but how absent the principle is in many businesses.

  4. Celebrate success and failure
    Most companies that run at speed often forget to celebrate their victories both big and small, and they rarely have time or the humility to acknowledge and learn from their failures. Celebrate both your victories and failures in your own unique way, but share them and share them often.

Shawn Parr is the The Guvner & CEO of Bulldog Drummond, an innovation and design consultancy headquartered in San Diego whose clients and partners have included Starbucks, Diageo, Jack in the Box, Adidas, MTV, Nestle, Pinkberry, American Eagle Outfitters, IDEO, Virgin, Disney, Nike, Mattel, Heineken, Annie's Homegrown, The Michael J Fox Foundation for Parkinson's Research, CleanWell, The Honest Kitchen and World Vision. Follow the conversation at @BULLDOGDRUMMOND.

[Image: Flickr user Jeremy Brooks]

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108 Comments

  • @drkellypage

    Great post on the importance of culture but also disappointing not to see the authors assign due credit for the original thinker/s behind this idea ... it was Peter Drucker who originally discussed "Culture eats strategy for breakfast," with Dick Clark of Merck adapting it to "Lunch." And in Druckers original discussion it was not an 'either' 'or' discussion wherein one is mean't to take sides, so much as it was to highlight the amount of time business executives attend to each is out of proportion to their contribution to organizational success. This article doesn't really account for the connectedness of strategy to organizational culture and way of working ... strategy as practice, not a codified document nor a day spent brainstorming strategy ... it is an iterative process over time that we enact, guided by our vision and values forged through conversation and collaboration --- our individual and collective voice over time. Furthermore, why oh why do we always hold up the military as examples we should emulate ... why not not-for-profits, arts organizations or learning contexts where culture is forged from a vision of 'social purpose'? Consider also the process of "enculturation" as opposed to "indoctrination" in organizational contexts ...  

  • Meagen Farrell

    Thank you this comment! Great article, with useful examples of this phenomenon, but I have specifically been trying to find the original author of that quote.

  • Guest

    This is probably the best article I've read all year.  It sums up everything we're trying to change about politics and government

  • cecil dijoux

    Our "Strategy" is getting things done" - Herb Kelleher.

    Herb's approach in Southwest Airlines has always been a typical "no nonsense" strategy.

    I had the chance of visiting Southwest offices while visiting a friend in Dallas who worked there, and bumping into Herb, my friend just introduced me to the big man.

    From what I could see from Southwest on that day, and what I've read since, there is no question that culture is their #1 market differenciator.

  • Chad Gabriel

    I work at a company that does an unbelievable job at growing, encouraging, and believing in its employees.  We call it "Conscious Company" and it's founded on some of the principles of Radical Leadership (www.radicalleadership.com), which is a company and a leadership philosophy that we've embraced in creating Conscious Company.  In fact, we're going to be featured on a new show hosted by Larry King called In View later this year.  Take a peek at our company's Vision, Mission, Values, and Brand statements at http://www.tuthill.com/us/en/a....  Tuthill Corporation is genuinely up to big things with our people and we're setting new company financial records because of it!  Please feel free to contact me if you want to learn more about it!

  • Stephanie Fischbach

    Absolutely love this article! I agree that some organizations understanding of their own culture are misunderstood. Culture is a direct reflection of Leadership, and I think that's one of the hardest buy-ins for Senior Leadership. It's one thing to "talk the talk" but it's another to "walk the walk." When you do though, you understand the foundation of where your culture is realistically. It's truly about hiring with trust and empowering your employees to live your vision everyday.

  • Jim Sutton

    I had to come back and read this entertaining treatment of good content again. Culture is one of those things that's easy to think about and difficult to actually influence. And with so much organizational churn it's easy to see places where some proactive change or attention to culture is needed. Culture is intimately tied with with the ability to change and lead and behavior at large - it enables or constrains the strategy, it is not the strategy, it does eat it.

  • silverlinksnetwork

    This is an excellent and intuitive article. The 5 building blocks are, in my long experience, spot on. Strategy should not be confused with culture. Clearly strategy concerns itself with the vision and culture with the behaviour. Living the cultural values from top to bottom is critical as is the ability to challenge and be challenged whenever the cultural values are being contravened. All too often the rank and file feel unable to challenge the upper echelons.

    I have had experience of being on a Board that needed to change the culture of a large organisation where the fundamental issue was one of trust and accountability following the period of office of a CEO who did more damage than good. It was a long process and took some time before people felt able to trust and felt empowered but the results were extraordinary. This article brought it all back.

    We all know of organisations, some of them very well known where there is no understanding of cultural values, where the organisation is successful in strategic terms but the indulgence of over inflated egos, for example, does not make it a pleasant place to work. I think it is safe to assume that they are not performing as well they might no matter how successful they consider themselves to be.

  • John Daughety

    I'm going to repeat someone's earlier comment:  culture IS strategy, and is as important in most cases as the decisions made on a company's direction.  In business school we were forced to take Organizational Behavior class and we all dutifully attended and did our best on the exams, but we had no respect for this course.  25 years out of business school now, it is clear to me that this was by far the most important subject we studied.  A great example of the impact of culture on an organization is an airline I worked for over a 12-year period, with a CEO who was proud of his selection by Management magazine as the meanest CEO.  This airline has struggled for the past 20 years, even after the departure of this CEO, because of the culture he inspired while there.  It takes a long time to create a truly dysfunctional culture in a large organization, and once the organization is well-infected it takes even longer to undo the damage - unless you lay off everyone and start over.  Speaking of branding, every time I fly this airline the "brand" I take away is associated with anger, not customer service.  Culture is most critical to branding in organizations with high levels of contact between customers and employees.  Southwest Airlines and Zappos have both handled this part of their branding quite well.

    Leaders think they can just share a well-thought strategy with their "minions" and the company will cruise to success, then are frustrated when this doesn't happen.  Most of the time the "minions" actually have a better strategy, and the best high-level strategy is to make sure the culture is good and then let the people drive the company's success (which is a key part of the culture in most successful organizations).  Strategic planning courses in business school need to spend more time talking about culture and leadership and less time on BCG charts or the latest formula for analyzing a market.  I think most leaders of organizations with good cultures would argue that they have more time for, and better information to support, strategic analysis as a result of their first strategic priority.

  • Moowa Masani

    Fantastic article!!! Right on par with how I work with clients and how I what I would like to do more of with my business. Thanks for the affirmation that culture is more than the soft frilly feeling that only 'creatives' and arty people can make use of...

  • Steve Campodonico

    Wyeth - here are some resources I've found that are great: anything on organizational culture by Edgar Schein; many consider him the "father" of organizational culture. Check out the OCAI test/survey - great tool. Another great resource is Organizational Culture in Action by Driskill and Brenton. Lastly check out www.culturologybook.com.

  • scott m. graves

    Live it and Love it.  Culture was important when working as a SVP in CD manufacturing, as Executive Director of a Symphony/School, as a business owner and as a non-profit board member.  We ALL need to embrace how to BE a part of cultural transformation.

  • Stephen Cadley

    Great Article and aligning it with Brand.  Very interesting.  And do love the Title as it is something from  Edgar Schein (As quote from him circa. 1986), that I use in my presentations and consulting work.   

  • Helen Slater

    Culture underpins organisational brand. It is certainly living - that's why it's called a culture. A bit like penicillin, it grows and multiplies, but it can be damaged by toxic agents as well, so company cultures have to be understood, nurtured and protected.

  • Karl Duff

    Whilst the organisational cultures in the companies listed here are easy to identify, one must remember that every organisation has a culture whether espoused as in these examples or hidden and unconscious. In fact much what underlies culture is unconscious; such as assumptions and values, Schein (1992) described culture to be like an iceberg with the artifacts (dress code, decor, language) being visible and assumptions & values often hidden.

  • Pepita Bos

    An excellent article that sums up most of my thoughts exactly. To read about culture I would recommend reading Edgar Schein and Schultz & Hatch.