"Culture Eats Strategy for Breakfast"

"To get through this downturn, we need a culture of innovation."

"It's the leader's job to change the culture."

"A leader cannot delegate the culture of the organization."

"We're rolling out this training to create a culture of inclusion."

This is just a small sample of references to organizational culture I've come across recently.

It's common these days for culture to be mentioned in either explaining what's happening in an organization or in prescribing how to fix various problems.

But most of what we hear about culture misapprehends what it actually is, and the role of leaders in the culture of organizations is routinely overstated.

Culture seems to be in our every thought about what's happening in our teams. But misconceptions about culture can create false moves or false inaction, and leaders can fool themselves in damaging ways by ascribing it too much or too little agency.

Let me take a stab at defining this seemingly shapeless phenomenon.

Organizational culture is not:

• The mere existence of values, principles, or aspirations.
• Observable behaviors in one episode or even several iterations of performance.
• Something a leader can own, control, or deliver.
• An action leaders can take to fix a problem.

Organizational culture is:

• The prevailing attitudes, routine behaviors, and shared norms of an organization.
• What an outsider can readily observe about life in an organization.
• Self-executing. If you drop a new team member in, they conform naturally to the culture simply by settling into the organization.

This diagram is how I understand, based on everything I have observed and learned in three decades, the relationship between leaders, values, and culture.

Culture grows from values. To intentionally create or change a culture, an organization must first commit itself to stated values and principles. Importantly, they need to exist at the organizational level; otherwise, people will take them to be the pet principles or ideas of one or a few leaders.

But values in themselves aren't enough. Leaders must then notoriously, persistently, and prominently champion those values. Modelling them, living them, and actively protecting them sends the signal to the organization about what is important. Teammates will follow the leader's example until behaviors, and the values they represent, become ingrained.

This is how a leader can change the climate of an organization.

Sustain a climate change for long enough and a tipping point is reached where the values themselves take over. They do the work because they’ve been made credible and embedded in behaviors, norms, and routines.

At this stage, the leader need not actively sustain anymore. Values have become ingrained enough that they happen routinely, without being actively driven.

When this is observable, the culture has been established or changed. The leader's role then becomes simply sustaining the culture by occasionally reinforcing the values. But once a culture is established, it will not easily change regardless of what the leader (or anyone else) does.

This is both the magic and the risk of organizational culture. A positive culture won't be knocked over by the gusty winds of the tough times.

But a negative culture won't be remedied over night because leaders say different words or insist on different behaviors. If an organization has a culture of overwork, leaders telling people to be more balanced won't be enough to change it. A new value and sustained period of climate change will be necessary.

So when you hear about leaders "creating cultures" in organizations, tune your radar. Leaders cannot deliver culture. They can change the climate by driving committed values. But values alone cannot create a culture change without leadership driving them. It takes both, in alignment, sustained over time.

Why does any of this matter?

Well, as an example, in the period after the pandemic, many businesses have struggled with balance sheets and needed to control cost. It has become fashionable to champion a "culture of innovation." Businesses will often make bets on the innovation-driven savings they believe they can achieve, and will represent these in projections.

This is a recipe for frustration, missed targets, and reporting distortions as teams try to tell the larger organization what they believe it wants to hear.

A culture of innovation can't be created as an action to control costs in the next quarter or even the next year. If it didn't already exist, you're too late. The best you're going to achieve is a climate change where innovation becomes more important. To do this, you'll need a commitment to innovation as an organizational value and a leadership campaign to ingrain it. Then, you'll need time and persistence.

Peter Drucker famously said "culture eats strategy for breakfast."

The implication is that a strong organizational culture can provide constancy and stability when strategy falters, but also that a strong culture can make an organization resistant to rapid adjustments in strategic direction.

When you understand this, you know culture is incredibly powerful -- indeed too powerful to be owned, controlled, or delegated.

But it can be shaped and influenced over time, and indeed it's essential to do this intentionally, because whatever culture prevails in your organization will be more determinant than anything else, including your strategy.