"Culture eats strategy for breakfast." Those were fine words from Peter Drucker and are confirmed from my own experiences, which I will touch on later. What is an organisation's culture? Well, simply put, 'it's the way we do things around here'. I like that definition, it's short, succinct and I'm sure we can all relate to it. Let me give you an analogy, which I also love. My wife and I are UK nationals living in Turkey - yes, the dreaded 'expats'! We have a very large garden, which we both look after and my wife is extremely green-fingered and loves gardening. On the other hand, my forté is lawn-cutting and general maintenance. So we're a good team! That said, there is always a danger to try to create an English country garden in a Mediterranean environment and it doesn't work. The climatic environment is analogous to business culture - 'it's the way nature does things around here'. Some things will thrive. Some things will just survive. Some things will die. As an example of the latter category, we have our failed attempt to grow a willow tree! In the business environment, strategy (planting the 'business trees') has to compatible with the business culture (the prevailing 'climate'), otherwise, like our willow tree in Turkey, it will get eaten for breakfast! I will mention no company names but here are two examples from my own career.
I worked for a large multi-national corporation, which was a hard task master, highly integrated and entrepreneurial and real fun to work for. It was acquired by an even larger company, which was a cash rich conglomerate, risk averse and extremely dull and boring from a young high flyer's perspective. There was certainly a good synergistic fit in terms of technology and markets, but a real clash of cultures. The acquirer's culture not surprisingly dominated in the newly consummated relationship, but much of the top talent from the acquired company soon moved on and gradually the added-value of the 'marriage' was lost.
The other example was when I became the managing director of a well-established, medium-sized engineering company, highly respected by its customers for value, quality, responsiveness and support of its sophisticated products and services. But it had a high market share of a niche sector within a gradually declining market, so from its rapid growth in its early formative years, it was now suffering from a flat to declining sales profile. I spearheaded a strategy of moving the company into pastures new, whilst not neglecting its existing markets. It was a case of establishing current technology into new markets, i.e. the classic market development strategy. Strategically it made sense but it was hampered, although fortunately not defeated, by culture. The company's existing customers were a good cultural fit with the organisation - risk averse and highly procedural. The new customers were very different. They came from fast-moving new industries where the priority was on getting the job done and worrying about the contractual issues later! Ultimately the new strategic direction did turn out well for the company but it took much longer than originally anticipated.
So what are the lessons learnt from my experiences and numerous other case studies? Well, there is an interesting piece in 'Strategy Bites Back', in a chapter by Karl Weick, under the heading 'Strategy is Culture is Strategy'. He suggests that there is a common set of issues in organisations that some choose to call culture and others choose to call strategy. Having considered my experiences as well as the case studies, I am now firmly of the opinion that culture is an emergent property of a highly complex organisational system and is usually deeply-rooted, i.e. difficult to change. Strategy, or more specifically a strategic plan, contains goals that haven't been achieved but exist as aspirations. So we have a deeply-rooted culture that firmly exists, coming together with strategic aspirations that have yet to be realised. Well, that says it all doesn't it? They just better be compatible with each other, otherwise as sure as eggs are eggs........
"Culture eats strategy for breakfast."
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