Culture eats strategy for breakfast

A little more than six months ago, I took a new role with a group that was described as in need of a “turn-around” and an “updated strategy and direction”. I was urged to introduce a new mission/vision, strategic objectives, and revised key performance indicators. Given my performance management background, this seemed like a reasonable approach.

However, after several conversations with key internal and external stakeholders and spot-checks a few levels deeper into my new management chain, I came to the conclusion that the organization didn’t need a new strategy to solve its performance problems. While performance hadn’t been up to full potential, the issue didn’t seem to be with processes or structures or metrics.

My first few weeks on the job reinforced my initial assessment. Almost every important decision had to be made by me personally. At first I assumed this was because individual employees had little understanding of the company strategy. However, it quickly became apparent that cascading the strategy was unlikely to help because everyone was used to delegating up. After a couple of years of being told what to do and being discouraged to think for themselves, my new group had a culture problem.

A 2005 Harvard Business Review study of more than 100 corporations and thousands of executive assessments showed that culture influences leadership style more than any other factor.  Regardless of job function, employees who work in the same organization are 30% more likely to exhibit similar leadership styles than people who do the same job but work in different companies. Even strong leaders are susceptible to learned helplessness.

Because most leaders view culture as something soft and intangible, it’s often overlooked when they take a new job. However, a January 2006 Wall Street Journal article concluded that the biggest roadblocks for new leaders include:

1. Not understanding or caring about the current culture
2. Assuming the current leadership culture can support the new direction/strategy
3. Not articulating his/her aspirational culture for the team

In my experience a well-designed and well-implemented strategy cannot be effective unless people are motivated to support it. This idea is captured by the mantra “culture eats strategy for breakfast”, popularized during Mark Fields tenure at Ford Motor.  Clearly culture was my job one.

So rather than working on strategy or objectives or metrics, I concentrated on changing the culture. I immediately removed myself from some of the approval chains. I delegated critical and visible decisions to my direct reports and publicly reinforced their decisions. I encouraged them to finalize some long-standing issues without vetting them with me beforehand. And perhaps most importantly, I shared all of this with my manager who went out of his way to reinforce the new style.

Of course, none of this was without some drawbacks. Not all of the decisions were consistent with my point of view. And I missed some chances to put my own imprint on the group.

But the benefits more than outweighed these downsides. Today, the difference is palatable. The team is energized, employees are more engaged, and performance is improving. What’s more, there’s a sense of teamwork that didn’t exist before.

Goals, initiatives, and metrics. I have a huge appetite for strategy management. But I shouldn’t forget that breakfast is the most important meal of the day – it all starts with culture.

(Note: This post was basis of a submission which later won the HCI Human Capital M-Prize on Leadership.)