Thursday, May 14, 2015

Strategy, Culture, and Breakfast

 By Patrick Weber, MESA International Technical and Education Committee member

"Culture eats strategy for breakfast."

In spite of all the Internet attributions of this quote to management guru Peter Drucker, there is some question as to whether he actually said it.  Although the phrase doesn't seem to appear in Drucker’s books, one source traces it to Mark Fields of Ford Motor Company where it’s said the quote hangs in the company war room.  Regardless of whether Drucker actually uttered these words, understanding the context of the idea is critical because it can be easily misinterpreted.

Imagine two armies preparing to battle each other. One army is very good at executing strategy, the other army relies on its culture.  You have a choice on which army to join; will you choose the army whose strength is strategy, or the one whose strength is culture?  If you believe culture trumps strategy, the choice is easy.  When you understand the relationship between culture and strategy, you will choose very differently.
Both culture and strategy provide a unique framework for decision-making.  Strategy is forward-looking; what is the organization trying to achieve?  Culture is inward-looking; what are the values the organization holds dear?  When these two frameworks are at odds within an organization, culture always wins because it embodies the organization’s shared beliefs and sense of community.  Achieving a future state that is in conflict with culture is difficult at best.  But what about outside the walls of the organization, where other organizations compete?  This is where strategy is needed for long-term success.  It’s also where culture can become a hindrance to achieving success, which is the original context of “culture eats strategy for breakfast”.
Various studies have shown that only 5% to 15% of strategic initiatives (think Lean/Six Sigma/ToC, PLM, MES/MOM, SCM, etc.) are completely effective.  Frequently those inside the organization cite root causes of failure as “lack of planning”, “poor communication”, “not having the right people involved”, “poor requirements”, or “unrealistic goals/lack of buy-in”, but that’s exactly what strategy/culture conflicts look like from within.  When “what we want to achieve” is in alignment with “who we are and how we do things”, then planning, communication, buy-in, and requirements flow naturally.  When they’re not aligned, it takes organizational energy to force things to move in the same direction, and frequently something gets missed.
I recently had the opportunity to hear Jodi Berg, President and CEO of Vita-Mix Corporation, talk about her efforts to turn around a lackluster business. The process did not begin with a strategic plan – it began with an effort by the executive team to understand then define the Vita-Mix culture, using a process called “appreciative inquiry” (which essentially means “understand what the organization does well, then do more of it.”)  Vita-Mix makes sure every colleague knows the company’s “edge”, its mission, its values, its guiding principles, vision and objectives.  Everything else in the company can be changed, but only in alignment with the established culture.  As a result, Vita-Mix has become an iconic brand, their products highly prized by foodies globally.
“Culture eats strategy for breakfast” is not intended to express superiority of culture over strategy, rather to serve as a warning that strategy can easily be derailed by culture.  Businesses that take the time to understand both are more likely to find success in the marketplace.
Now, enjoy your breakfast.
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