Strategy v Culture – They Aren't Opposites 

Is culture more important than strategy, or is strategy more important than culture?

This classic question has grow in the mindset of leaders in recent years as the rise of culture in the workplace is recognised for its importance not only in improving performance but in driving whole enterprise competitiveness. For anyone familiar wth the McKinsey S7 model will know that the shared values within any organisation ultimately drive the delivery of both the hard 'S' factors, (strategy, systems and structure) and the soft 'S' factors (skills, staff and style). 

McKinsey 7S model for ANY Business

The focus today on culture over strategy is really a misunderstanding of the importance of strategic thinking in business. The relationship between strategy and culture is in fact  one of mutual dependence. Without a clear strategic vision in place, thoroughly developed by the leadership team, then no amount of investment in culture will deliver improved bottom-line business performance.  

Culture, is actually an integral part of delivering / implementing any business strategy. If you cannot motivate people to successfully work together, to be more than the sum of their parts then the leadership team cannot deliver its strategic vision.  Therefore strategy and culture are mutual partners in any successful enterprise. What you do, matters just as much as how you do it. Simon Sinek's the 'Power of Why' is an excellent explanation of the mutual nature of culture and strategy combining. 

Is Business Strategy Failing?

So why do so many organisations quote that only 20% to 30% of their strategic initiates succeed? Figures such as these immediately make leaders think about culture as the primary driver of successful organisations, rather than focusing on strategy. The additional value of culture as a driver of enhanced performance within a sector is primarily seen in high-value service led west-coast millennial businesses, (which are the ones always quoted), by cultural advocates who so often tag brands such as Apple, Google and Facebook. 

While looking at these types of new business, its easy to see their culture at work and how it improves performance within the workplace, but what underpins every one of them is that they have their successfully developed strategies in place, which underpin and drive their success.  

The passion with which these organisations promote their cultural identify would make it look as if their success is due solely due to their unique culture, but if that was the case then companies such as Bebo and Myspace would also be quoted as outstanding examples of success in west-coast culture. 

The Cultural Advantage 

A positive and rewarding culture can drive a successful strategy deployment quicker and more dynamically than their competition. This type of competitive advantage can deliver  rapid emergence of a new entrant, or accelerate a high-growth competitive business within a dynamically developing market. 

The key aspect of a vibrant company culture is that it creates an inspiring work-place, which enables the rapid deployment of a strategy coupled with the flexibility to respond to change quicker than the competition, often through empowerment of employees to take ownership of decision making at the front-line.

This cultural advantage in business enables those businesses able to enhance their cultural identity to outcompete their competition in emerging and rapidly developing markets effectively, but it does not replace sound strategic thinking, it just supports and allows rapid acceleration of a strategy being delivered successfully. There is in effect a symbiotic relationship between a successful strategy and the culture within which it is delivered.    

Those leaders who focus on culture rather than strategy are chasing the defining differentiation within the market, rather than the fundamental definition of any business. No matter in what sector you are operating within without a fundamental strategic purpose no business can succeed. 

Results Only Work Environments ROWE

Dan Pink in his excellent book DRIVE talks about Results Only Work Environments ROWE, where employees are free to work on their own projects for a period of their work. The apparent results show that businesses like Google found that about half their profits came from work undertaken by 20% of employees time. 

While this sounds an outstanding impact of culture in driving results, it does not always reflect the reality. The controls put in place within an organisation direct where the employee puts their energies in ROWE, so they are not free, more managed towards projects that fit within strategic parameters. Secondly many projects which people work on are dream projects which enhance the base functions of the organisation, or they department, so that ROWE work extends or commercialises work within organisations rather than is purely derived from a ROWE culture. This is not to decry a ROWE culture, which can be inspiring but it is important to understand that ROWE cultures are not a panacea for success.   

Culture cannot replace strategy, it might camouflage a weak or lapsed strategy for a short time, but no matter how much spirit there is within any workplace without a long term strategy no business will succeed. While cultural evangelists passionately quote Apple, they quietly forget Nokia or Motorola as organisations, who both had positive cultures, Motorola invented the mobile phone and Nokia was the definition of innovation for many years, but who have been let down by strategic failures.     

Strategy development, an often misunderstood leadership skill-set, has become a phrase to describe everything from an aspirational dream through to a quick win tactic. This ubiquitous  usage of the word of strategy attaching it to everything has heavily damaged and de-valued it, compared with the fairytale soft skill cinderella which is culture.   

Strategy Defines An Organisation's Purpose

Success is not just about having a clearly defined strategy, it is about having a strategic intent within the leadership which makes an organisation able to succeed. If the leadership has a clear direction and focus for the business, combining both the external view rigorously developed integrated, coupled with the internal focus on core competences, then that business can outcompete its competitors. 

Organisations led by strategic thinkers who focus on growth within their sector, by looking beyond the horizon and developing a clear understanding of where their market is going and therefore how to develop an advantage in their market. How the leadership use those advantages, how fast they can develop and implement strategies, relies upon the belief others have in that strategic vision.                 

Without strategic thinking, organisations will not succeed, here's why. Strategy underpins success, not just because it provides a focus for all activity within an organisation, but organisations with a strategic purpose attract the best talent, develop the best talent to deliver and retain the talent by providing them with a results focused purpose to stay and develop their talent further. 

Without that ability to provide a purpose for talented people, they will not come, develop or stay. That ability, which only a strategic drive can deliver, underpins the purpose of an organisation, its the clear goal focused approach, which drives the existence of a positive cultural environment, where the value of culture can make a difference in competitive performance.       

           

The Solution

Fundamentally leadership is about driving change, and that can only come from the leadership themselves.  You can't  delegate strategy or structural change, you have to own it live, believe it and drive it relentlessly until it achieves not a paper model but a realisation in achieving tangible outcomes towards strategic goals. Building the 'strategic model' is not strategic leadership, that is just dreaming it, it is the  'built it and they will come' approach to strategy.     

Having a great strategy is only a small part of the real challenge which leaders face. Being able to execute their entire plan, requires the ability to visualise their strategy as the big picture for the business and being able to communicate it to all levels of stakeholder with personal conviction which creates and sustains the momentum you need for your strategy to succeed. That means by beginning with the end in mind, that clear strategic objectives which fit into the future which the leadership team must believe in and focus on with ambitious and measurable goals.

Successful leadership must engage all the people throughout their organisation, so that hey all understand the strategic drivers that are creating and driving the market within which they operate. Only through open and frank discussion can leadership teams enable employees to understand the drivers and implications of change within the organisation will they be able to carry people through the change process successfully.

Summary: Strategy V Culture, it takes one to have the other.

It is not the case of culture eats strategy, if you look at successful businesses and organisations around the world, a great strategy, well thought out resourced, driven and supported will deliver bottomline results. Great strategic thinking, creates, nurtures and sustains dynamic cultures within organisations, which in turn drive strategic thinking to new heights, creating brand leaders in every sector of industry. But short-term thinking and a lack of investing in leadership skills, robust strategic thinking processes and people investment will continue to hamper the success of strategy in business today.

Author Richard Gourlay provides strategic planning consultancy to business leaders to grow and develop their business skills. 

Learn more at www.cowdenconsulting.com or www.richardgourlay.com