July 12, 2017

Strategy Remastered: Culture Doesn’t Eat Strategy for Breakfast, Culture IS Strategy

In general, it is accepted wisdom hat the throwaway “culture eats strategy for breakfast” is somewhat trite, and vague in meaning. On further reflection on this comment, however, it gradually became apparent that in fact it may not be as vague or as meaningless as we first thought.

Viewing culture as a valid part of strategy, we have observed, does contribute to a notion of a reinvention of ‘planning’. Not the systems or process component but perhaps the social and ‘people’ component.

With these observations in mind we now invite you to read the proposition contained herein and to then provide us with your views on the validity of the observations through either our LinkedIn discussion group https://www.linkedin.com/groups/3762509 or here on our blog.

Strategy remastered

Strategy Remastered: Culture Doesn’t Eat Strategy for Breakfast, Culture IS Strategy

For more than a decade business school professors have been searching for a comprehensive understanding of just what the ‘doing’ component of strategy (strategy-as-practice) is.

While the topics of strategy and culture have many touch points as part of their research agenda, little attention is given to the identification of a relationship between the two. Does that matter?  Apparently, it did when the phrase identified above became folklore in the business management lexicon.

As primary players within the business and management community, consultants are highly conscious of the need to understand the relationship between culture and strategy. Most, though, are forced to put it to one side as they address the more readily measurable outcomes from:

  • strategy practice: the tools and techniques applied to strategy analysis (e.g. scenario planning, portfolio analysis), and
  • strategy praxis: the activities and events that practitioners deploy when engaged in when actually ‘doing’ strategy (e.g. workshops and away days).

With the demand for measurable outcomes at the front of their and their client’s minds, consultants have had little choice but to work with the mechanics (practice and praxis) of strategy and leave culture to the clients. After all, it is the clients who have control over culture, not the consultants.

The chant from the consultants therefore is all about analysis, review, content development and merciless execution. This mantra, rightly or wrongly, imposes a strong influence on a firm’s culture in the short term, one that elevates a sense of urgency which in many cases is a good thing.

When viewed from a long-term perspective, however, I believe the opposite to be true. In that case, the short-term emphasis on the notion of ‘execution’ in particular gives me cause for concern as the apparent ‘call to arms’ can end up being highly counterproductive. Rather than strengthening culture, the very idea of execution reinforces a notion that firm specific strategy has a limited life span and by definition, a period of time that has a use by date; “that’s strategy done, dead and buried, now back to business as usual”.

I have always found it better for an organisation to foster a culture that promotes strategy as a driver of renewal and growth, not finalisation and death. That was of course before I gave some serious consideration to the idea that there could in fact be a middle ground where, in reality, strategy and culture are both the same thing.

To accentuate the belief by some consultants that the influence of culture, rather than strategy practice and praxis alone are critical to success, we point now to one global strategy consulting firm that builds on the belief that culture is more important than strategy, even when their perspective is less positive than it could or should be.

The commitment that this firm places on the importance of culture on strategy is described in their promotional literature through an observation that “bad culture can sometimes get in the way of good strategy”. Their recommendation therefore is for organisations to focus entirely on ensuring they develop strategy that is consistent with their prevailing culture. They go so far as to proclaim, “you need to choose a strategy that fits your culture”.

My concern with this recommendation is twofold.

First is the observation that few organisations are able to accurately describe what their culture is, never mind build strategy around it.

Second is the apparent disconnect between the idea that strategy is meant to provide a foundation for a desired future for an organisation, not one that simply fits its culture.

If “culture blocks strategy” they propose, it is strategy that needs to change. Surely this is the wrong way around. Strategy should set the direction for the future of the business and it is the right culture that ensures you get there. In which case, it is culture that needs to change, not strategy.

Increasingly, however, it becomes apparent that in fact this conclusion can only hold true if you continue to assume that there is a difference between the concepts of strategy and culture.

By now you must be asking - so what is his definition of culture and what is his real position on the relationship between strategy and culture? To get to an answer, I refer you to the Editor in Chief of the MIT Sloan Management Review, Paul Michelman, who sums up my perspective of culture perfectly. His observations were published in the Summer 2017 edition of the Review, a summary follows:

“In 1996, MIT Sloan professor emeritus Edgar H. Schein described culture as “a set of basic tacit assumptions about how the world is, and ought to be that a group of people share and that determines their perceptions, thoughts, feelings, and, to some degree, their overt behavior”.

Michelman also refers to Jon Katzenbach who describes culture “as the self-sustaining pattern of behavior that determines how things are done. Culture is made of instinctive, repetitive habits and emotional responses”. In drawing his own conclusions from these definitions of culture, Michelman develops a modern-day version of what he thinks culture is:

“Culture provides a well-rooted sense of purpose within an organisation, one exemplified by a recognized set of behaviours and shared beliefs. It gets - and keeps - everyone marching in the same direction.”

Now that is more like it - is this not the fundamental description of what strategy and indeed, strategy-as-practice is? In other words, isn’t culture and strategy the same thing? I think it is. Of course, strategy is still developed and managed by practitioners skilled in the use of effective and dynamic practices and praxis.

We are now in a position I think to form a more reasoned perspective of what strategy as practice is. I suggest it can now be described as something that: “is fostered by a relevant, strategically focused culture, enacted within a praxis that follows the construct of a systemic, integrated, and dynamic framework and a practice undertaken by the ‘right’ and best skilled individuals in the organisation who are well informed of the most appropriate practices in strategy that are available to them”.

Take Apple as the most obvious example. One of my favourite quotes from an Apple employee in his description of working at Apple is “I would rather be a Pirate than join the Navy”. As Pirates, Apple employees are empowered to challenge ‘what is’, and motivated to invent and reinvent ‘what could be’.

Those practices are driven by a culture that knows no fear of failure and is never constrained by ill-conceived perceptions of the past. This to me is the epitome of good strategy practice.

Let’s not stop at Apple though, similar attributes can be found within the likes of Lego, Ikea, Amazon, Google, Tesla, SpaceX and Virgin. The point is, unless there is a prevailing organisational culture that the pirates of this world can relate to, there is no vibrant, dynamic, manic successful organisation that can deliver the outcomes we most desire. And then where would we be?

We seek your views on the opinions expressed in this discussion. It is a key question to be addressed in our upcoming conference to be held in Melbourne, Australia in October 2017 and London in November 2017. You can find more details here: https://conference2017.smiknowledge.com/. On this occasion, your views and opinions will well and truly count and will be considered for inclusion in future publications of conference proceedings.

 smiknowledge conducts on line E learning courses in strategy that provides explanations of the foregoing elements of contemporary strategy practices, as well as many others. We invite you to join us - membership and course details can be found at https://www.smiknowledge.com/membership/ and https://www.smiknowledge.com/strategy-courses/.

1 Comment