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Culture vs Strategy…Who Wins

January 16, 2012

So what is more important, culture or strategy?  You know you need both but which is more important? If you’ve ever heard one of my employee engagement or generational diversity presentation you know what the answer is and you know why.  As said best by Peter Drucker: 

“Culture eats strategy for breakfast.”

Research abounds regarding how culture impacts the success of a company – its profitability, its ability to innovate, and gain market share.  I recently read Derek Irvine’s blog post on TLNT “4 Reasons Why Culture is More Important than Strategy.” In the post Derek highlights recent research from Booz & Co. which adds more data and statistics to the “culture vs. strategy” debate.  Booz & Co. reports “that companies with unsupportive cultures and poor strategic alignment significantly under perform their competitors…. In fact, companies with both highly aligned cultures and highly aligned innovation strategies have 30% higher enterprise value growth and 17% higher profit growth than companies with low degrees of alignment.” [Read the article, Why Culture is Key in Strategy +Business.] 

I wonder how many business leaders, CFOs and board chairmen and chairwomen read those stats and actually believe them.  Do they think the P&L or expansion plans are the only facets of the business that matter?  I mean matter enough to garner a healthy dose of their attention?  I’m sure some thought is given to the office atmosphere but culture is more than that.

Culture can be defined in many ways (as the research abounds so do the books on the topic). A consultant and friend defined culture once as “…how we treat our co-workers.” But at the heart of it culture sets the tone of how the company operates and functions.  Culture manifests itself in seemingly everyday ways – like how the office is decorated, the stories employees share (especially to new employees), and the informal communication style.  And culture manifests itself in larger ways – like the values (and unwritten rules) the employees embrace and live out and the type of person (a hero) employees look up to.

The research supports it, the management gurus speak to it and past experiences prove it’s worth (ask anyone of the risk taking culture embedded at Enron)…is your leader on board?  Are you?

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