The phrase coined by Peter Drucker and later publicized by Ford’s Mark Fields had the right intention… but wasn’t quite on the mark. Strategy is important – and 80% of the books on management in any typical bookstore endorse that view. It’s important to know where you’re going, why you’re going there and how you’re going to get there. It’s important to know where your competitors are, where the market’s going and to figure out how you’re going to win in that space. However, the differentiation between companies is often not in the strategic path they took but in fact in the culture they drove in order to be successful with those strategic paths. And it can lend itself both ways – in using those strategic chosen paths to drive change because their culture allows them to be flexible and change … or not change at all because culturally they’re not wired to do so !! And that means that strategic chosen path never delivers results.
And therefore, I would say that while strategy is important, it’s even more important to have a culture that allows you to evaluate strategy openly. And call out a mistake when it’s a mistake and then change direction. If you are going down the wrong path, it’s okay if you have a culture that allows you to change direction. But if you have a culture that doesn’t allow you to do that, you’re doomed. Which is why I would argue that culture doesn’t just eat strategy for breakfast… it’s much bigger than that and therefore eats strategy for breakfast, lunch and dinner!!
If you ever want to pick the one thing that actually differentiates organizations, people, teams… it’s actually culture. Culture is about how you deal with situations, how you behave with each other, how you solve problems together, how you solve a client problem, how you approach opportunities, how you make trade-offs and how you take risks. Every one of those is deeply entrenched in a company’s culture.
Here’s the other thing about strategy versus culture. Strategy can be copied. The problem with copying strategy of course is that you lose the first-mover advantage. You kind of could become a ‘me too’. But it still can be copied. Culture cannot be copied. So if your differentiation is culture, first of all it’s a differentiation that’s built on your history, your legacy, who you are and how you got there. You know all of that and then you teach people all of that. And that proliferates that culture.
In our industry, for example, everyone uses Lean Six Sigma. Everyone talks about process, everyone talks about technology. So that’s not the differentiation. The differentiation is what’s the culture that you created that actually uses it. How does it permeate? How is it rewarded? How is it punished? Copying that is very difficult. It’s deep inside the DNA. It takes years to build and proliferate. And therefore, if your differentiation is built on culture, it’s a long-lasting differentiation. It’s a differentiation that’s not easy to copy and as long as it’s a culture that’s a winning culture, you will continue to win.
Terrific Post! Specially this line - "And call out a mistake when it’s a mistake and then change direction." I think you are among the very few CEOs who blog (in the BPO industry). The only other CEO i can recall, who blogs is- Vineet Nayar. Looking forward to more such insightful posts :)
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Deleteits very true that everyone wants it diffrent from others, but the more difficult thing is how we will suceed in it.
ReplyDeletedifferenttiation should be for the benefit of all not to punish or diminish others.
Thanks for enlighting me for this great thaught which surly be fruitful when applying in day to day events. For me it is not about which one is most important, but about which one is stronger in influencing and driving human behavior within the corporation, entity or society whether we recognize it or not.
ReplyDeleteVery well said & actually a nice approach towards achieving sucess. Culture specific enviourment enhances positive productivity on a global platform irrespective of geograhical locations
ReplyDeleteI have taken few points from this which i have started implementing !!!
ReplyDeleteThanks Tiger, these posts help introspect! I read it twice and got stuck with 2 questions. "How does a leader realize that the culture imbibed by the organization is reaping benefits and not strategy?” and "Can there be a situation where there are lot of unknown(s) than known(s) to Leader about a culture?"
ReplyDeleteSo let me answer both questions. On number 1 I would say that strategy and culture are not mutually exclusive. Culture plays a big part in driving the strategy of the company. Culture, in fact, allows you to evaluate strategy and change direction if need be. Like I said in the post, the differentiation between companies is often not in the strategic path they took but in fact in the culture they drove in order to be successful with those strategic paths. And therefore… beyond a point it doesn’t really matter what’s reaping benefits, as long as one is reaping benefits !! On number two (can there be a situation where there are lot of unknown..." If leaders don't know culture then they are not good leaders. Having said that, it’s not humanly possible to be omnipresent and know everything that’s going on at the ground level. But that’s why you invest in building a strong team with strong leaders who become advocates of that culture and drive in consistently across the board. That’s why you invest in a strong governance structure with checks at various levels to ensure you’re on the right track. And this doesn’t happen in isolation.. in terms of a “culture check”… because culture permeates everything – from the way you do performance appraisals, to bidding for business, to team meetings to financial report – everything! And there are strong leaders and teams and structures around each of these processes to ensure there is consistency.
DeleteStrategists do consider the embodiment of Org culture during projecting critical OD process. Cultural aspect (DNA) of the Org is the intangible component in analyzing developmental orbits.
ReplyDeleteCulture can be nurtured thru leadership & thoughtful actions for a period of time. After all, culture doesn't sit on comfort zone, it needs to follow strategy esp. in M&A.
Very nice post. If I look at our internal culture the one glaring issue/mistake I see that we need to call out and make quick changes to is our internal processes. It seems to be going from bad to worse. The quicker we can change this the more competitive we will be in the market
ReplyDeleteHi Tiger , its great to read your posts. I am a great admirer. Want to be like you.
ReplyDeleteThis classic debate of Strategy v/s Culture, much pouplarised by the above mentioned statement of Peter Drucker had invited, albeit a lesser known, but one which holds immense relevance-
ReplyDelete" Strategy and culture should have breakfast together " - Max McKeown
Shiv Ram Krishna Pande,
Summer Intern, Quality
Silokhera, Gurgoan
OHR: 800069169
What a blog, this could be life changing if one understands it right at the experiencial level and applies it into the system. To achive your goal with a strategy through your org culture & your goal is nothing but the below lines.
ReplyDeleteIt’s important to know where you’re going, why you’re going there and how you’re going to get there. It’s important to know where your competitors are, where the market’s going and to figure out how you’re going to win in that space.
Very well said Sir !!!
Great topic and one that can benefit a lot of people out there. Culture is what defines a company internally, strategy is what defines a company to it's market. Culture is what propels a company while strategy is what steers it's direction. So there are two componenets, propultion and direction. Without either, you will surely miss your intended target. So although we can talk about them seperately, they are but 2 steps in the same process (pun intended).
ReplyDeleteBrilliant post. It made me realize how companies are just like humans as an entity. One can copy the things which another human is doing to achieve a goal but can never copy the values and the way of thinking of the other person which are built through a number of personal experiences and hard efforts. Culture and values are something which humanize a company and take it beyond just being a logical machine which can be easily copied.
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