(3 mins read)

“Culture eats strategy for breakfast”

Peter Drucker

Certainly, you have heard the famous statement of Peter Drucker. It’s so simple and so POWERFUL. A company’s success is not depended only on WHAT. There are so many interdependencies and connections with HOW.

A recipe for a successful organisation seems easy and straightforward. Everything starts with the right STRATEGY. Once the business strategy is defined, communicated and embedded, we need to work on the right STRUCTURE. Having it will help us execute our strategy. As the next step, we need to ensure that within the organisational structure there are the right PEOPLE. We need hundreds or thousands of employees being capable of working professionally and delivering against our strategy everywhere. And finally, the most important element of the organisational puzzle, the right CULTURE. Our culture will be linked with desirable behaviours, with ways of working with the organisation.

Does the above sound logical and look uncomplicated? Maybe it is too idealistic? If the model is so straight-thinking and rational, why are many companies struggling with executions? Why are there is still a lot of challenges and difficulties?

There are many different reasons why organisations face challenges as there are many ORGANISATIONAL DISTRACTIONS, circumstances which could potentially impact organisational effectiveness.

Below, we are going to focus on CULTURAL DISTRACTIONS. Each organisational distraction will be supported by a real life example to illustrate better the point of view.

VALUES MISMATCH – company’s values should be in our daily activities and not only as a professional poster on the wall in the main reception area. This connection will build a link between the company and costumers. It will help build trust. It is not about having slogans which could create a nice and professional picture of the organisation, it’s above living them every day. Lack of connectivity or misalignment could lead to crisis management or even closure of business operations.

EXAMPLE: Theranos – Elizabeth Holmes (founder and CEO of Theranos) was compared to the next Steve Jobs. She had charisma and she had a vision. After some time, it appear that Theranos and Holmes’s vision was a massive FRAUD. There was not a single integrity element in the Theranos business model and in the way how they managed the business and communicated with external world. Recently, Elizabeth Holmes was found guilty on four charges. She may spend up to 20 years in jail.

EGO CHALLENGE – this is a big one. Many of us have seen or worked with leaders with BIG EGOs. Usually they share a big vision which is unrealistic. Unrealistic visions push people to work against unrealistic expectations. We could easily say that as an effect, the organisation is disconnected with reality. The “EGO” leaders do not want to listen to any different point of view, they do not tolerate a constructive challenge or even a discussion. In many cases they aspire to be the next “Steve Jobs”. It’s so dangerous to the organisation, because many discussions and decisions are based on facts, they are disconnected with reality and are driven by one person on a top.

EXAMPLE: WeWork’s CEO – Adam Neumann. During the first ten years of his company’s growth, everything was build on Adam’s vision. There was a massive push to grow for any price. It was working until 2019 when WeWork paid a price and Adam was pushed to resign as the CEO of WeWork.

POLITICS – We have seen many situations where power or authority were used to implement some decision or changes which could benefit organisation or specific individuals. Politics are seen specifically in situation when decision takers do not follow company protocol, i.e. promotion of talents without a recruitment process, without roles publishing. There are also some marginal situation when people act with bad intentions or they play games to gain some personal benefit.

EXAMPLE: Airbus – The Airbus A380 is the largest plane built by humans, capable to take up to 850 passengers on board. It was supposed to be a massive success of the company and a start of a new era of airplanes. During the design and construction phases, many processes or activities were disconnected and approved in isolation. Management pushed to meet the deadlines as it was a top priority project for Airbus. As as results, project costs grew by USD 6.1 billion, which doubled the original cost projection. The problem was that electrical cables were a few centimetres too short. The root of the problem was that management too the decision to proceed with the project despite the fact that two Computer Aided Design (CAD) systems were in use. That decision resulted in design inconsistencies, mismatched calculations and configuration failures.

CHANGE CHALLENGE – to survive, companies need to push for a permanent progress and development. However, words should be supported by actions. If we talk about continues improvement, it should be visible not only in our research and development teams. New ideas or technologies needs to be implemented to company’s operations on a regular commercial strategies and operations. It’s not about talking about the change. It’s about being a change.

EXAMPLE: Nokia – Nokia literally dominated the global phone market by 2007. They had 40% of the global share and they went extinct like dinosaurs within the next eight years. Nokia phones were reliable but they were not smart phones. When Apple launched the iPhone with an intuitive iOS in 2007 they started losing market shares. Nokia was not able to respond to the challenge. Before 2007 Nokia was extremely successful business model, however they missed all changes happening on the market. It’s a pity as they developed the first touch screen. Global success seduced management and focused them on day-to-day operations, disconnecting with continues improvement and change. They lost their competitive edge totally when the iPhone was launched. 

Many companies focus on the WHAT and they forget about the HOW. It is clear that a successful company finds the right balance and interdependencies between strategy and culture. Everything should be connected and complicating.

Culture should support strategy!


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