Why culture trumps strategy

By | June 17, 2013

Culture Trumps StrategyI first heard the phrase “Culture Trumps Strategy” in 2008. Intuitively this makes sense. Culture lasts. Culture is everywhere. Employees don’t need online training to understand it. It’s who we are. It’s what we stand for. It’s why I like my work.

Ken Wilcox, Chairman of the Silicon Valley Bank gave a compelling talk on the topic here from a Stanford eCorner video podcast. A few excerpts:

I believe that the most important things that a company can focus on are its strategy and its culture.  I also think that if you had to pick between the two, that culture trumps strategy every time. 
I think that because if you have a great culture, your people will develop a strategy that will win.  But if you don’t have a good culture, even a winning strategy will not be useful.

Culture is long term. Culture transcends CEOs, management fads and business cycles. The average tenure of a CEO is less than 9 years, while the typical CMO (marketing officer) is even shorter at 43 months. It’s foolish to think that any strategy – no matter how well thought out – will be faithfully passed down from executive to executive. With the changing of the guard, often times is a changing of direction.

Culture is everywhere. Culture transcends job descriptions, product launches and supplier agreements. It’s how employees think, behave, and recruit other people into the company. Strong organizations have resilient cultures, where the “spirit of the law” is more important than the “letter of the law.”

Decision making is distributed to the most junior person who can make the call because there is trust.  People make smart decisions, and the managers support them – even if the results are not perfect. There is trust.

Strategies are secrets. Too often, strategies inadvertently remain a secret. Executives and senior managers might understand the strategy, but is it translating into action? Is it making an impact on the customer? Effective strategy = implementation.

Implementation takes effort, internal marketing, changing of incentives, and repetition to get buy-in from everyone. It’s common for customer-service reps, sales people, and technicians to either be unaware of a strategy or lack the tools to implement it in their day-to-day work. Strategy consultants beware. Are your ideas getting implemented?

Broken culture is hard to fix. Too often, companies hire management consultants very late in the game. Revenues are down, costs are up, market share is shrinking, product development is stalling, and employee retention is poor. Consultants can help with strategies, tactics, technology and tools – but outsiders cannot help with culture. Ken Wilcox says some brutal things, that in my experience, are very true:

I believe that most people in most corporations in the United States are unhappy.  That most people in most corporations in the United States.  And this isn’t just a belief.  There have been studies done that would suggest that this is the case. 
They devoted half of their brain to their job and the other half to thinking about how nice it would be if they work someplace else.  And eventually, that opportunity comes.

Related Posts:

BCG: Atlas of Strategy Traps

Whether you are a lion or a gazelle: when the sun comes up, you’d better be running

Workplace Therapist: Guide to Finding a Great Work Culture

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2 thoughts on “Why culture trumps strategy

  1. Tom

    This is hard stuff but seriously: true! A lot of manager are not able to understand this. Transformation and change of strategy needs organizational – which means cultural change – too. Otherwise their strategy will fail for sure!

    Reply

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