Culture vs. Strategy?

“Culture eats strategy for breakfast” is an often-used phrase to describe an essential element of organizational success. Here’s my take: You need both.

Without a comprehensive, well thought out strategy, businesses tend to operate in a state of constant randomness. And while short term success may be found in reacting to opportunities and circumstances as they happen, there inevitably comes a time when that doesn’t work anymore. Competition, technology, and other factors combine to offer an ever-increasing range of choices for clients and customers. Determining a strategic direction rises to the top of the list for organizations determined to plan for sustainable success.

In his seminal article “What is Strategy,” Michael Porter points to one essential element of a fully functioning strategy: differentiation. From a planning perspective, that difference should focus on three key stakeholder groups: customers, employees, and investors. In each case, the differentiation strategy centers on the same idea. Why should they choose you and your organization? How is it different (better!) as compared with their best alternatives?

While strategy matters, it is impossible to overstate the need for an effective organizational culture. This too, is a key element of a solid business strategy. Being the employer of choice, attention to recruiting, onboarding, training, developing and retaining the best talent is a form of differentiation. In much the same way that customers choose your organization, “A” players will prefer to work in your organization as opposed to other choices (and remember, “A” players always have choices). Understanding the essential elements of a high-performing culture in a way that is fully felt and supported throughout the organization is a strategic choice and a C-Suite imperative. Yet, it is mostly misunderstood. Here’s a hint: There’s much more to it than “Pizza Friday.”

In working with senior leadership teams on strategy and planning, each of these items are put on the table for in-depth discussion, dialogue and debate. Taking the view of three key stakeholder groups, employees, customers and investors, strategic issues are centered on the same essential question: Why us? That is, why would employees, customer and investors choose us when they have other options? What is our compelling advantage, and how does it compare with other options? How will we move resources in the direction of our chosen strategic direction?

For more information on making the most of your organization’s strategy, contact me at joe@ajstrategy.com.