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“Corporate Culture Eats Strategy for Breakfast” – True or False?

By February 12, 2019February 13th, 2019No Comments

Peter Drucker says “Culture eats strategy for breakfast”.

82% of senior business executives agree, saying that getting the right culture is critical to the success of their organizations*.  And yet shockingly, only 28% of executives believe they understand their Corporate Culture*, and only 19% of executives believe they have the right Corporate Culture*.

Changing corporate culture change is difficult for at least 3 practical reasons:

  • Most executives can’t clearly articulate their current culture.
  • They can’t clearly define their desired culture.
  • Changing the culture of a “tribe” requires changing the ingrained beliefs, practices and habits of every member.

So, Peter, how do we REALLY change Corporate Culture?

Here are 7 steps to getting it right:

  1. As the leader start by asking yourself these questions:
    • What are the values and beliefs, that you hold to be core to your ethical principles and to be successful as a company?
    • How do you want to be treated by others?
    • What are the standards you want to be held accountable for?
  2. Share and get input and “buy-in” from your senior management team.
    • This can be best achieved at an off-site company retreat.
    • Suggestion: Using a skilled outside facilitator who understands business and better still understands your business can be a big help.
  3. Articulate the message.
    • First determine the core values you think are critical and why.
    • Next determine what behaviors would reflect these values.
    • Then play around with messaging that reflects those values & behaviors.
    • Finally get a good wordsmith to work on the rough drafts and final manifesto without losing the spirit of what you are trying to get across.
  4. Determine if some values are “keystone “as they will drive the other values the company adheres to.
    • Think of the Alcoa story. Neil Smith took over of a losing company in 1987 and delivered 13 years of unbroken success. By then Net Income was 5 times larger and market capitalization had risen to $27 billion.
    • He started by stating in his 1st public address that he was going to make “Safety” his # 1 priority.
    • The genius of this strategy was that it was one both unions and management could agree on. More importantly it sent a message – lives matter! If that value was lived, it meant manufacturing processes had to be improved. That in turn drove down costs and radically improved profits.
  5. Get the message out to the whole of the company.
    • Look for opportunities to put flesh and bones on your values by sharing, recognizing and rewarding exemplary behavior that supports your core values.
  6. Modify and update any time you build on your strategy.
    • Nothing ever stays the same. Your core values typically are timeless, but the stories and new behaviors need to change to reflect changing circumstances.
  7. Most important of all, “walk the talk”.
    • Let’s not forget Enron! Enron’s espoused values were – “honesty, integrity and respect”. This was the height of hypocrisy. Their leaders were egregiously dishonest, had no integrity and little respect for others.
    • So, it’s not about the written values – what counts are what the “tribal leaders” believe and actually live and hold each other accountable to.

 

*Kaplan, Marc et al. Global Human Capital Trends 2016, The New Organization: Different by Design, rep. (Deloitte University Press, 2016). pp 36-44

About the author: Tim Rooney is the founding partner of Rooney, Earl and Partners, a consultancy committed to effecting measurable change in sales and management.  He can be reached at tim@rooneyearl.com or 905-472-0894.

 

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