Does Culture Eat Strategy?

The quote that “culture eats strategy for breakfast” is most often attributed to Peter Drucker; although, after doing a little research, it seems that this is an urban legend, with many apologists offering that Drucker would have shared the sentiment. Undeniably, many others have grabbed the idea and built on it – I particularly like this 2012 article in Fast Company by Shawn Parr: Culture Eats Strategy for Lunch

I have used this idea in my work, mostly to provide reality checks to ELTs who are developing a strategy that is incongruent with their organizational culture. For example, if the central pillar of a new strategy is “speed to market” in a business that hasn’t launched a new product in five years, I might open up the discussion by asking what has held back timely innovation. Maybe the culture fears failure because missteps are punished, or perhaps institutional risk aversion has taken hold as a result of a regulatory change. This discussion needs to become integral to the strategy discussion, because no amount of intellectual rationalization about the need for speed is going to undo how people really think and behave.

I recently worked with a client who is grappling with a rapidly changing environment. During the meeting we brought in an industry expert who talked about how one of the disruptors – think of a Google, Facebook or Amazon – was about to turn the business upside down by applying sophisticated analytics to the market. My client is a great company, but analytics is not its forté. The room became quiet as they digested the speaker’s predictions of what was about to happen to them. I know that everyone on the ELT had been thinking about this for months, or even years, but this was clearly a galvanizing moment.

What happened next was very interesting. The speaker told the team that in order to compete with data it should consider hiring an expert firm – essentially outsourcing the analytics function. The team disagreed. We split into ad hoc groups and spent the rest of the meeting trying to figure out what data we needed, what data we already had, and a work-plan to fill the gap. By the end of the day we had developed a plan – a strategy – for how this organization was going to become data driven, and in the process learn how to compete with a disrupter who doesn’t know anything about the industry.

From my chair, I realized that a cultural change in the business had begun. If this team keeps up the momentum that it generated at the offsite, it will begin to transform the business culture by looking at analytics as a competitive weapon. And this is really the insight. It is not about culture eating strategy or vice versa. In a great company, strategy is culture.