Why Culture Eats Strategy for Lunch
Culture and strategy must be aligned in order to drive effective decision-making.
A few months ago I discussed business strategy over lunch with a client. During the conversation he mentioned the famous quote, “Culture eats strategy for lunch,” widely attributed to Peter Drucker. I left the conversation thinking about the relationship of culture and strategy. The statement seems so natural, so obvious, and unquestionably true. My first reaction to such a clear statement of fact is to compare the statement to my own experience, and based on that, I agree wholeheartedly. In my experience, many large and successful companies struggle to select and execute strategy, and yet they all have a unique culture. I began to think about why this statement must be true, and a few rationales came to mind.
First, I believe that culture, and the underlying human interactions, touch us on a deeper level than any rational, logical, well-formed strategy ever could. We like to think ourselves pretty advanced, but we are still emotional and social beings, and we still make many decisions based on our “gut”. Because of this, cultural norms are much more likely to guide decision-making for most managers than strategy. Suppose for a second that a manager is fully up to speed on the firm’s strategy. Is the manager more likely to make the strategically aligned decision or the alternative, which would be more aligned to established culture? I believe that for a majority of managers, the strategically aligned decision poses more perceived personal risk and therefore is less likely to be chosen. Strategically driven decisions can require elaborate explanation, while a culturally aligned decision rarely gets a second thought. Even simply selecting a strategy is hard for most organizations because, in many cases, the choice comes with serious cultural conflicts.
Secondly, most firms do a poor job of communicating strategy throughout the organization, but almost everyone can tell you about the culture. Culture permeates the organization, however, a well-defined strategy can be difficult for organizations to articulate and disseminate widely. If you don’t believe me just ask any employee of any company about culture, and then ask them about strategy and compare the level of detail between the two answers. Firms don’t communicate strategy well because strategy is typically articulated in arcane terms, developed high up in the organization, and can require a significant amount of change for the organization.
Lastly, the manner in which culture is communicated through the organization compared to strategy puts the nail in the coffin. Culture is passed along through customs, rituals, common experience and vocabulary. Strategy can be esoteric and is rarely discussed throughout the entire organization.
Both culture and strategy drive decision-making, but because culture touches us on a deeper evolutionary level and is thus more likely to be well communicated to all parts of the organization, culture eats strategy for lunch. Does this mean that you should forget everything about strategy and solely focus on culture? Absolutely not. The learning here is that culture and strategy MUST be aligned. Good luck to any organization that is pursuing a strategy that conflicts with its established culture! In these situations either the strategy or the culture must change to ensure success. The real challenge is finding a path that aligns well to both.