Most commentators on this supposed quote from Drucker focus on the culture element. Get the culture right they say and the results will follow, without focusing on the strategy element.
But does this mean that strategy is completely irrelevant? I would argue not. To be successful in any market you have to have an idea of where you want to focus and why. Otherwise you will just spend a lot of time hurling mud at a wall and hoping that some of it will stick.
Strategy matters
In my experience, working as a frontline sales coach, effective selling needs a coherent market strategy behind it. You need to know what you are bringing to the market and how to position it in order to increase your chances of success. Otherwise you will spend a lot of time chasing business that never materialises because the customer either does not see you as the best choice or has no need for what you are trying to sell. Or you are chasing the wrong customers and looking in the wrong part of the market.
Getting that match right between product and market requires a bit of strategic thinking and market understanding. In their book Strategy Safari Mintzberg, Ahlstrand and Lampel talk about the difference between strategy as a position and strategy as a perspective. Position means exactly what I am talking about here – being able to locate particular products in particular markets. The example they use is McDonalds introducing the Egg McMuffin – a new product that focused on opening up a particular (breakfast) market. Perspective refers to the organisation’s fundamental way of doing things – in this case fast, simple food that can be purchased and eaten on the go. Contrast that with McDonalds trying to introduce waiter service into their restaurants. That would require a shift in perspective, which Mintzberg et al argue is much harder to achieve.
Culture is largely unconscious
This is where culture comes in, because culture ultimately refers to the organisation’s fundamental way of doing things. Culture is formed on the basic assumptions of what makes the organisation successful. Most of this is unconscious in that it is rarely articulated or spoken but it determines behaviour and influences decision-making. Its power lies in the human need to belong or fit into a group so in any organisational system people will find the ways of working and behaving that are deemed most acceptable by those around them, and most importantly, by those in power above them. Hence it is the beliefs and values of the leadership team that determine the culture because they will determine what gets measured, and therefore what gets rewarded, which then dictates what gets done by the people below. And why organisations that produce written values need to ensure that these are the lived values of the organisation if they are not going to end up as just wallpaper on the boardroom wall. No point having a value like “We are family” or “We support one another” if everyone gets measured on individual targets. Culture shows up in people’s behaviour, both unconscious and conscious.
Culture is difficult to change
Culture is therefore something that is deeply entrenched and difficult to change. It can be a key part of the organisation’s competitive advantage but it also runs the risk of being the cause of the organisation’s demise, if it becomes irrelevant to changing market requirements, or causes the organisation to be dysfunctional. Effective strategy needs to take account of the existing culture if it is to stand any chance of remaining relevant and achieving success. It also needs to recognise that if the culture is no longer relevant then a reframing of the culture needs to be a key part of the strategic thinking process.
So our conclusion is that whilst culture may set the breakfast table strategy has a role to play in determining what exactly goes on the menu, otherwise culture may end up with a lot of Egg McMuffins to throw away. And strategy needs to be active and decisive in terms of monitoring the market and giving feedback to culture to ensure their perspective remains relevant. Strategic goals also need to align with the cultural values in terms of how people are rewarded. For example, if the sales team are rewarded on number of deals closed without any consideration as to the quality or profitability of those deals then any strategy that is based on an assumption of increased profitability is likely to fall flat.
Using conversation analysis to understand culture
In Lysna our verbal behavioural conversation analysis (VBA) can help you recognise both the conscious and unconscious dynamics at play within your own culture so you can work on aligning to behaviours that will make you more successful as an organisation. And we can help you strategically think through how to position yourself more effectively in the market with tools like our Voice of the Customer survey which tell you what your customers really value.
