How Company Culture Supports (or Sinks) Strategy

Business author and icon Peter Drucker is famously quoted for saying that “culture eats strategy for breakfast.” Still, in some organizations, strategy nonetheless garners a great deal more attention and energy than company culture does. To be sure, even the most sound and well-articulated strategies will fail or never live up to their full potential if an organization’s culture is not aligned to support it.

So how do you create a culture that propels your company forward? Below are some key components of culture and how to use it as a positive influence and strengthening compliment to strategy.

Key Components and Examples of Workplace Culture

As noted in our recent post on Creating Exceptional Employee Experiences, culture in the workplace is essentially the collection of belief systems, attitudes, values, and norms that employees share and that shape how work gets done. Culture starts at the top, with leadership, in the vision they set forth, the objectives they communicate, and most importantly, through the consistency of their behaviors and interactions with others over time.

In describing its widely lauded company culture, Southwest Airlines notes on its website that, “Our Culture is woven into all aspects of our business and our Employees’ lives, from the way Employees treat each other to the way that our Company puts our Employees first. Three vital elements of our Culture are appreciation, recognition, and celebration.” This clarity and shared alignment across all of its employees have helped Southwest thrive for decades and served as a key element of their growth.

Pixar’s long-standing successes are owed in large part to the company’s dedication to ensuring “psychological safety” in the workplace. This dedication has instilled an environment where every employee is encouraged and accustomed to providing and receiving feedback without the fear of being embarrassed or experiencing negative consequences. Pixar employees embrace the practice of radical candor to make everyone better and strengthen the product of their work.

Contrast the great examples of company culture like those described above with the not-too-distant-past environment at another well-known company, where allegations of harassment, disgruntled employees, legal liabilities, and negative attributes were present. The company has been able to survive these issues and improve their culture since, but not without incurring severe reputational damage and tough to quantify financial losses. The Company acknowledged the impact of their culture in their pre-IPO disclosures, noting that “Our workplace culture and forward-leaning approach created significant operational and cultural challenges that have in the past harmed, and may in the future continue to harm, our business results and financial condition.”

The Power of People

Strategy does not translate to success without competent and empowered people to carry it out. That’s a big reason why entertainment giant Netflix espouses a core philosophy of “people over process” and promotes an environment of “great people working together as a dream team.” In a page articulating key elements of the corporate culture at Netflix, the company provides an in-depth exploration of its values and what they believe makes Netflix special, including encouraging independent decision-making and sharing information openly, broadly, and deliberately.

As companies look to attract and cultivate talent in their organizations, they first need to have a clear vision of the culture they want to create or maintain and be able to communicate it effectively. This triggers several key questions, such as:

• Have we articulated the characteristics exhibited by successful employees who embody our company culture?
• Do our performance management systems and recognition efforts align to all aspects of our desired company culture?
• Do leaders and employees at all levels demonstrate comfort and competence in providing and receiving feedback?

Answers to these questions and others like them provide a framework that enables hiring managers to go beyond technical skills and capabilities to gain a clearer picture of whether a candidate would contribute to their culture in a positive way or weaken it. Having a shared and aligned view of these attributes across an enterprise also supports the reinforcement of desired behaviors amongst existing employees.

Build a Company Culture that Complements Strategy

To move an organization forward in the most effective manner, culture and strategy must work hand in hand. Leaders need to share the vision, set the tone, and work to weave the ingredients of the culture they want to create into every fiber of their organizational fabric. When culture is left unattended, strategy can be sunk at the start by the weight of internal forces that work against it.

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Are you struggling with these or similar issues? If you need help building a company culture that complements your business strategy, request a consultation today from a vcfo HR expert. We have worked with more than 5,000 business teams in our 26 years. We would love to talk with you, hear your story and concerns, and share our experience and collective wisdom to see how we can help.