Culture or Strategy – Which Comes First?

Culture or Strategy - Which Come First Photo of an intact egg as the chicken emerges...the strategy or the culture?

Culture or Strategy – Which Comes First?
When it comes to creating high performance and beating your competition, does culture or strategy come first.  Does corporate culture precede business strategy or is it the other way around? The age-old question of which comes first…the chicken or the egg…forms the basis of an ongoing debate in the business and organizational development worlds.

Let’s start with some high-level definitions.

What is Strategy?

We define business strategy as the clear and compelling choices about where to play and what actions to take. Done right, a successful strategic plan sets a company up to perform beyond just the sum of its parts by answering the fundamental strategic questions of “why, what, where and who.”

First, think of strategy as the big problem you are solving or the big question you are answering.  Then decide how to ruthlessly prioritize your time, money, people and energy to make it happen.

Remember strategy is as much about saying “no” as it is about saying “yes.”  And, as we all know from following successful companies like Amazon or struggling companies like Mylan (the expensive EpiPen makers) or even failed companies like Blockbuster – there are definitely good and bad strategies.

What is Culture?
We define corporate culture as the way work truly gets done in an organization on a day-to-day basis. In general, strategy must go through culture to get results.  Your culture answers the fundamental question of “how.”  Think of it as the collective attitude, assumptions, purpose and behaviors of a company’s workforce. It exists in every company whether by design or default.

We do not believe that culture can be measured on the same “good to bad” scale as business strategy.  We believe that it is either “aligned or unaligned” with the strategic intent.  For example, consider Oracle and the 2013 America’s cup.

After learning Oracle spent the most money, hired an elite crew, cheated and won, it is pretty clear to us that their strategy and culture were perfectly aligned to win at all costs.  While that type of business environment is not for everyone, it sure seems aligned with the strategy of winning at all costs.

Which Has a Greater Influence Culture or Strategy?
Our organizational alignment research at 410 companies across eight industries found:

  • Strategic clarity accounts for 31% of the difference between high and low performing companies
  • Cultural factors account for 40% of the difference between high and low performing companies

With a 71% combined impact, strategy and culture are critical to short- and long-term success.

Additionally, a Harvard Research found:

  • An effective culture can account for up to half of the differential in performance between organizations in the same business.
  • Up to 75% of organizations struggle to implement their strategies because of cultural roadblocks.

So, based upon the data, one could certainly argue that starting with culture may make sense.

What If You Put Culture First?
Like the America’s Cup example, organizational culture can support a strategy if both are aligned.  Or like VW with their recent emissions scandal, it can weaken or destroy a strategy if they are in conflict.  From our perspective, there are two ways to put culture first.

  1. Current Culture: The first way would be to clearly understand and articulate your current cultural reality and then build a strategy to leverage it.
  2. Aspired Culture: The second way would be to clearly understand and articulate your desired corporate attitudes and behaviors and then build a strategy to leverage it.

The Challenge of Putting Culture First
What if you put culture first in the culture or strategy debate?

While putting culture first (especially your current culture) may seem like an enticing approach, most clients find it frustrating on a practical level to put culture first in terms of strategic planning.  Without a clear and compelling strategic destination, many find it difficult to agree on the best way to get there.  With that being said, building a strategy that hinges on direct contradictions with the way your employees currently think and act is a sure path to failure.

  • If, for instance, your winning strategy requires decentralized decision-making to succeed, you had better make sure that your company cultural provides individuals with enough freedom and incentive to make decisions across all levels of the organization.
  • If employees are unwilling or unable to make decisions on their own, the best strategic plan will struggle to meet expectations.
  • Some analysts believe that Apple is facing this exact challenge after the death of Steve Jobs.  The thinking is that employees who were previously well versed in implementing Steve’s detailed vision are now struggling with being asked to do more.

What If You Put Strategy First?
What if you put strategy first in the culture or strategy debate?

Executives can certainly select directions and make plans for the future regardless of the company’s cultural environment. They can set goals and timelines and communicate that information to their constituency. There can be related metrics, incentives and progress reports.

The strategy can even be just what the organization needs to survive and thrive in the future. But if the strategy is counter to the way employees think and behave, it is doomed to failure.

And, because cultural change is slow, long before the culture shifts to accommodate a misaligned strategy, the business plan will have failed. A prevailing cultural environment can be changed…but only with time and a concerted effort by all involved.  In a sense, culture is a major resource to be utilized as you execute a strategy.

The Bottom Line
In the culture or strategy debate, we believe strategy and culture are inextricably intertwined. They are interdependent and, for a strategy to succeed, must be mutually reinforcing. The most successful business plans leverage the company’s existing culture as much as possible.

When a new strategy involves a change in culture, that change must be either relatively small and in sync with other fundamental tenets of the behavioral environment or the strategy implementation plan must include the definition and shaping of the desired culture and everything it entails.

Whichever you believe comes first, you can’t have one without the other. And when you leverage strategy with your underlying culture, you are bound for higher performance.

To learn more about defining an aligned and high performing culture, download How to Build a Purposeful and Aligned Corporate Culture.

Comments are closed.

Our company engaged LSA to do a specialized “train the trainer” program, and the consultant’s performance outdid our exceptionally high standards for such a program. Very crucial to the success of this program was the work done upfront to discuss our needs and to interview key members of our organization so that the program specifically met our goals. Our facilitators continue to comment on the success of the program. Thanks also for the follow-up.

Frank Abbott
Chief Financial Officer

LSA’s approach and ability to bring the best resources to eBay has been a great asset. They really focus on helping us succeed in any way they can and are very flexible in meeting our management and talent needs.

Mike Normant
Learning & Development

ebay

I have worked with LSA Global at previous companies and welcomed the opportunity to bring them in to support my new organization. We worked closely with LSA to design a solution for our Client Partner Teams and Management Training on both coasts. LSA designed a customized solution for our business and organizational culture. LSA is a quality organization, one that I’d recommend to any company looking for a first class training and consulting partner that makes an impact.

Laurie Torres
Chief People Officer

The Next Generation Management Development courses have helped me communicate more effectively with my peers and teammates. By utilizing effective communication techniques such as clarifying and confirming, and asking open ended questions, I have been able to clarify and understand information in situations where I would have otherwise asked limited questions and made false assumptions.

Robert Breckner
Firmware Engineering Manager

The refreshing thing about LSA is that they focus on understanding our business situation and helping me succeed instead of selling a product. With over 150 experts, they are an invaluable resource that helps me deliver higher quality results faster. I recommend them to anyone looking to improve the performance of their workforce.

Stacie Rodgers
VP of Human Resources

Cutera

Here’s a token of my appreciation for ALL your efforts. I’m offering my most sincere appreciation, and it extends to all the folks who made our customized management development programs possible.

Susan Anderson
Workforce Planning Bureau

We have been able to utilize LSA’s extensive network of top-notch resources to leverage our investment in employee development. The result has been the cost effective and highly efficient delivery of quality educational and management training programs.

Steve Feller
Vice President, Human Resources

LSA has become the gold standard in team building and management training at Genomic Health! I have a hard time finding facilitators that come close to their level of customization, expertise and experience.

Emily Couey
Director of Human Resources

LSA exceeded all my expectations. We interviewed 7 potential training and consulting partners and selected LSA due to their expertise, flexibility, and breadth and depth of solutions. We were able to construct a management training course from the modules most appropriate to our needs, and are able to provide additional training from their well developed portfolio of experts. Our managers galvanized as a team throughout the session and are better prepared for the rigors of a competitive market.

Mitch Mandich
CEO

Edify

For our go to training outsourcing partner, LSA provides exactly what we want. As always, they deliver outstanding work!

Elizabeth Siebert
Director, Organizational Excellence & Development

Intuit

We recently contacted LSA Global to assist us with a unique training request. We gave LSA a very short deadline and LSA custom designed a training program to meet our exact requirements within the limited time allotted to them. We found their facilitator to be well versed in the subject matter and very credible; the design provided practical and valuable information to our team of managers. I highly recommend LSA Global, particularly in the area of management training.

Julaine K. Souza
Senior Vice President

SeaTel has found our partnership with LSA Global to be very valuable and beneficial. We turned to LSA to customize a supervisory/leadership solution to meet our needs. LSA delivered a customized top quality solution. I’d recommend LSA Global to any company looking for a best-in-class training and consulting partner.

Kortney Riddle
HR Manager

We partnered with LSA to pilot a customized behavioral interviewing program to help ensure that we continue to hire the best and brightest as we continue to rapidly scale. LSA’s ability to understand our business and our unique culture combined with their desire to ensure that the best practices framework truly fits our performance environment and is highly adopted by our people is a real blessing. Most other firms want to just ‘give you training.’ Not LSA, they are focused on helping me hit our hiring forecasts and attract A players.

Jennifer Remling
Director of Global Recruiting

AKQA

Hyperion has a commitment to lifelong learning. LSA helps us provide the right business sales training, management training programs, and leadership development programs at the right time to meet the needs of both individuals and departments. I especially appreciate their ability to listen to my needs and recommend the appropriate facilitators, solutions and content.

Sarah Parks
Senior Project Manager

Hyperion

In the Next Generation Management Development courses, I was trained with skills and tools that have made me and my team more productive, motivated, and successful at communicating with other departments.

 

Kevin Ashman
Firmware Engineering Supervisor

Evaluate your Performance

Toolkits

Toolkits

Download key published insights and tools from industry experts highlighting best practices in the areas of talent, strategy and culture.

More

Health Checks

Health Checks

Want to know how you stack up against leading organizations?  Receive a complimentary benchmarking analysis courtesy of an LSA Expert.

More

Whitepapers

Whitepapers

Get up to speed on timely solutions critical to your business. Published by LSA Experts based upon client feedback and key industry trends.

More

Methodology

Methodologies

First we identify the key metrics you want to improve. Then we assemble a dedicated team of elite experts who have successfully solved similar problems with similar clients.

More

Blogs

Stay up to do date with the latest information on how we help high growth companies align their culture and talent with strategy.

More

Case Studies

Client Case Studies

Real world consulting and training approaches from LSA projects, providing insights on how your company can outperform the competition.

More