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.