What Under Armour And HBO Have In Common

Ten years of innovation, lesson No. 7: Culture eats strategy.

What Under Armour And HBO Have In Common
Emilia Clarke in Game Of Thrones and Golden State Warriors's Stephen Curry [Photo: courtesy of HBO (Emilia Clarke); Flickr user TechCrunch (Steph Curry)]

I was at an invite-only dinner in the south of France, at a chateau overlooking the Mediterranean during the Cannes Lions Advertising Festival. The lavish al fresco meal was cohosted by talent house WME and ad agency Droga5, and it featured short speeches from notable media figures: 21st Century Fox CEO James Murdoch, model Chrissy Teigen, and HBO chief executive Richard Plepler, among others. I was sitting across from Under Armour CEO Kevin Plank when HBO’s Plepler addressed the group, stressing how at his company, “Culture eats strategy for breakfast.” Plank became agitated and began furiously tapping away on his phone. When the HBO chief finished, Plank confronted him with a photo of the Under Armour offices back in the U.S. It featured exactly that phrase posted on the wall.

As it turns out, neither Plepler nor Plank can claim credit for originating the “culture eats strategy” mantra, though there’s plenty of debate about its heritage. Many attribute its birth to management guru Peter Drucker, but it doesn’t seem to appear in any of his writing. Ford CEO Mark Fields purportedly attributed the quote to Drucker back in 2006, just as it was entering the business lexicon.

What matters more than the etymology of the phrase, though, is the way Plank reacted to Plepler’s use of it. It was perfectly indicative of Under Armour’s culture: competitive, feisty, fearlessly unwilling to cede an inch of territory. This is precisely the ethos that has propelled Under Armour from a startup operating out of Plank’s grandmother’s basement into a global commercial force, with evangelists such as football quarterback Tom Brady, swimmer Michael Phelps, golfer Jordan Spieth, and NBA wonder Steph Curry.

If you get to visit a variety of companies, as I am fortunate to be able to do, you immediately get a feel for how different each business culture is: Just as every family has its own vibe, so too do companies large and small. IBM may be famously corporate (even if the white button-down uniform has become more lore than rule), but that hasn’t prevented its talent from creating and promoting Watson to become Corporate America’s signature AI engine. Facebook’s headquarters features what may be the largest single-room office space in the world, a meandering topography that includes cafes, open-air meeting spaces, and glass-enclosed conference rooms. It can feel a bit like a playground, yet the engineering under way there is definitely grown-up stuff.

The larger point is that innovation at each of these locations, for each different enterprise, must grow organically from its own culture. Especially for modern businesses that have moved away from strict command-and-control structures, the on-the-go decisions made each day, at all levels of the organization—the activities that bring any stated strategy to life—are the results of people’s habits and values. If GE wants to “contemporize” its executive training facility, foosball tables may not be the first option—but a more genteel all-day coffee bar might. Plepler’s point about HBO at that dinner was that, for all the tumult over streaming strategies and shifting cable-system business models, the company’s central point of differentiation continues to be its content, which grows out of its long-standing, well-demonstrated respect for artists. (HBO eventually outsourced a key part of its streaming technology, in recognition of where its strengths lie.)

As for Under Armour, it is telling that CEO Plank won’t mention his chief rival, Nike, by name. The company’s convention is to refer to Nike only as “the other guys”—a reflection of Under Armour’s swagger. At Nike, they don’t mention Under Armour by name much, either. But Nike’s culture is very different: CEO Mark Parker began at the company as a shoe designer, and his obsessions include an eclectic street-art collection. While Plank comes across like a hard-driving football coach, Parker (who was a competitive marathon runner in his younger days) offers a more Zen-like exterior. Still, both of the companies’ cultures are demanding and results-driven. Their achievements come from a common root: By leaning into their own culture—and not trying to be “the other guys”—they find and execute strategies that allow them both to succeed.

This article is part of our coverage of the World’s Most Innovative Companies of 2017.