Culture Trumps strategy

“Culture eats strategy for breakfast.” Those wise words ring very true for many organizations today and were quoted by the famous management thought leader Peter Drucker. Across industries you have many organizations that do manufacture exactly the same products or sell exactly the same services. The key difference between the industry leaders and the laggards is usually one: organizational culture. Most cultural aspects and differentiators are tangible and can be gleaned from signs and symbols such as how people dress, use of first names when addressing seniors or whether there are separate facilities for seniors and juniors such as bathrooms, cafeterias and parking. Whatever the case, if an organizational culture does not reflect the foundations of strong values which rest on the core of a strong purpose, then even the sexiest corporate strategy will fail to launch on the basis of incongruence. The management tries to pull in one strategic direction but fails to recognize that the organizational culture does not allow it to pull itself out of the morass that keeps it stuck in the quagmire of reality. A 2011 study titled “Why Culture is Key” by a leading consulting company Booz and Company concluded, “Culture matters, enormously. Studies have shown again and again that there may be no more critical source of business success or failure than a company’s culture – it trumps strategy and leadership. That isn’t to say strategy doesn’t matter, but rather that the particular strategy a company employs will succeed only if it is supported by the appropriate cultural attributes.”

Herewith are a few examples of (very typical) organizational culture.

Exhibit One: “Are you lonely? Don’t like working on your own? Hate making decisions? Then call a meeting. You can see people, draw flowcharts, feel important and impress your colleagues……all on company time! Meetings: the practical alternative to work. “ While I saw this on a poster that was making fun of an office meeting culture, it rings especially true in many organizations where people have meetings for the sake of meeting. It eats up valuable work time, expends useless energy where one is not required to be at the meeting and often times leaves meeting attendees feeling frustrated and angry where discussions centre around the same thing over and over again with no tangible conclusions. But the motive behind calling a meeting can often be an excuse to wield power: the power to summon, to dominate and to control a “subject’s” time. I recently met a group of executives one of whom gave the horrific example of a meeting called by her boss. The boss, who was in a glass enclosed office, decided to dial into the meeting via Skype as he was too busy to leave his desk which was 10 meters away from the conference room where the meeting was taking place. The effect was immediate: meeting attendees felt demeaned that their time was clearly not as important as that of their boss and were outraged that the company’s value of respect for others was being violated by a senior executive. Meetings are a necessary management tool to deliver organizational goals but the danger that they can derail employees away from the quite obvious goal of getting things done should never be forgotten.

Exhibit Two: “That’s the way things are done around here.” You’ve probably heard someone in the organization, yourself included, say this when asked why a certain process or policy exists in the company. You are just too lazy to find out why it exists and how it may be a stumbling block for the development of a better product or faster service delivery. A good example of the dinosaur approach was experienced by Stephen Elop, who took over as CEO of Nokia – the mobile company giant in decline- in September 2010. One of Elop’s challenges was to change old habits among employees. In a talk to employees, he asked a question that many were probably too afraid to answer truthfully give how Nokia was struggling to combat new entrants Apple and android powered phones into mobile telephony. When Elop asked how many people amongst the employees used an iPhone or Android device, a few hands went up. Elop’s response was, “That upsets me, not because some of you are using iPhones, but because only a small number of people are using iPhones. I’d rather people have the intellectual curiousity to understand what we are up against.” In other words what Elop found was a very inward looking culture existing at Nokia, one born of hubris that the company would always be successful and didn’t need to worry about other players hitting them from left field. Which is exactly what happened. The danger of this culture is that an industry leader such as Nokia can quickly turn into an industry laggard that starts to adopt copycat tactics rather than innovation to stay afloat.

Exhibit Three: “Rules are for dummies and subordinates, in that order.” Charles Revson , the founder of the Revlon beauty products empire, was a typical highhanded boss. He worried that employees were not coming to work on time, although he himself rarely appeared in the office before 12 noon. One day he walked into the new Revlon headquarters and asked the receptionist for the sign in sheet, which absolutely every employee had to sign upon entry. The receptionist who was new responded, “I’m sorry sir you can’t do that.” Charles said, “Yes I can.” The receptionist replied, “I’m sorry you can’t. I have strict instructions that no one is to remove the list, you will have to put it back.” They went back and forth, with the receptionist remaining firm but polite. Finally Charles said, “Do you know who I am?” to which the reply was, “No sir I don’t.” “Well when you pick up your final paycheck this afternoon, tell ‘em to tell ya.” Well, that story sums up that culture quite well: Do as I say and not as I do. Capisce?
Twitter: @carolmusyoka