Culture eats strategy for breakfast (part 1)

While typically attributed to Peter Drucker, we really don’t know the origin of “culture eats strategy for breakfast.” This oft quoted phrase is familiar, but what does it really mean?

Clear vision, a shared mission, and sound strategies are critical to successful, sustained growth; however, there are countless examples of toxic cultures that derailed even the best of strategies. (Organisational Culture: Toxic Culture and Business Performance; Inside a Powerful Silicon Valley Charity, a Toxic Culture Festered; Why Your Best Innovators Leave Your Company – at the Worst Possible Moment; How A Poor Culture Can Kill Innovation)  The point is CULTURE MATTERS!

What are the attributes of a healthy culture? That’s not an easy question to answer, but the answer must start with “it depends.” Even universally desired attributes may not be healthy in some organizations. For example, most of us would say that cooperation is a fundamental attribute of healthy cultures. But I know of organizations that thrive on internal competition… weed out the weak… only the strong survive. Look at an NFL team. While there is certainly cooperation and team work, each person must compete for their position. In fact, it is competition that drives them to be better.

The question of culture rightfully surfaces in discussions about innovation. We have CEOs ask us, “how can I develop a culture of innovation?” We can’t offer a simple, one-size-fits-all answer (and I would be leery of anyone who claims they can); we must first unpack the question. How innovative do you want your accountants to be (ask former leaders of Enron and Arthur Andersen)?

We typically talk about three types of innovation: efficiency, sustaining, and disruptive (Clay Christensen: The Wrong Kind of Innovation). The first, efficiency innovation, should thrive in the culture of your entire organization. If it doesn’t, then you should seek out approaches for infusing appropriate innovation attributes into your culture. There are many who can help you do this.

Successful organizations have a culture of continually exploring better ways to get the job done. Better may mean more efficient or more effective, but in either case the result is less expensive. Earlier in my career, my team worked with Walmart both as a customer and innovation collaborator. When you walk into their Bentonville headquarters, you can’t help but think “cheap.” Most offices had a desk made of a discarded door sitting atop concrete blocks. The culture screams “cheaper” (if there’s a cheaper way to get it done, we will find it). Walmart is a culture that embraces and encourages efficiency innovation.

The second, sustaining innovation, while equally critical to the organization, is riskier than efficiency innovation. Typically, there are groups within the organization focusing on sustaining innovation, and these groups must be extremely customer-centric and strategic. If you want a classical context for sustaining innovation, revisit Michael Porter’s work on Strategy.

There are cultural attributes unique to organizations that are consistently and successfully introducing sustaining innovations. Your organization must have cultural attributes that support sustaining innovation. While the entire organization is not responsible for creating sustaining innovations, all have a hand in implementing these innovations; therefore, as with efficiency innovations, there are company-wide cultural attributes that need to be present.

The third type of innovation, disruptive or “empowering” as labeled in the referenced article above, will be explored tomorrow.

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