The late management guru Peter Drucker famously said, “Culture eats strategy for breakfast.” While this quote has become something of a business cliché, its enduring popularity speaks to a fundamental truth: even the most brilliant strategy will fail if your organizational culture doesn’t support it. However, Drucker’s absolute is not exactly true. If you think about it, and really understand the strength of strategy, culture is an element that is vital but not the end-all for strategic success.
In our previous article, we explored why so many businesses—from startups to established corporations—neglect strategic planning. Now, let’s examine the often-overlooked relationship between culture and strategy, and why aligning these two elements is crucial for sustainable success.
Strategy and culture are like two sides of the same coin:
When these elements are misaligned, the results can be disastrous. Consider the cautionary tale of companies like Wells Fargo, where an aggressive sales strategy combined with a cutthroat culture led to widespread unethical practices. The strategy (increase account numbers) was undermined by a toxic culture that prioritized results over integrity.
As Diana Kokoszka insightfully notes, “We have to work on ourselves because we can’t give what we don’t have.” This principle applies equally to organizations. A company’s collective mindset—the shared beliefs, values, and attitudes—forms the foundation of its culture.
This organizational mindset manifests in several ways:
In companies with a Growth-oriented culture, decision-making processes encourage thoughtful risk-taking and learning from failures. By contrast, organizations with fixed mindsets tend to punish mistakes and discourage Innovation.
Kokoszka’s mantra—”You can’t get to better until you get to different”—perfectly captures the relationship between growth and change. Organizations with adaptive cultures embrace change as opportunity, while resistant cultures view it as a threat.
Is success measured solely by financial metrics, or does it include factors like employee development, customer satisfaction, and social impact? The answer reveals much about a company’s culture and shapes how strategy is executed.
Even the most carefully crafted strategy will falter when it conflicts with entrenched cultural norms. Consider these common scenarios:
A traditional company develops a strategy to modernize through digital transformation. The leadership invests in new Technology and processes, but the culture remains resistant to change. Employees see the new tools as a threat rather than an opportunity, resulting in low adoption rates and continued reliance on outdated methods.
A company’s strategy calls for breakthrough innovation, but its culture rewards predictability and risk avoidance. Teams stick to incremental improvements rather than pursuing disruptive ideas, causing the organization to fall behind more adventurous competitors.
Leadership announces a strategy focused on customer experience, but the company’s culture remains internally focused. Despite lofty mission statements, employees continue to prioritize internal politics and processes over customer needs.
In each case, culture effectively “eats” strategy, rendering even well-conceived plans ineffective.
Creating alignment between culture and strategy requires intentional effort. Here are five approaches that successful organizations use:
A compelling “why” unites culture and strategy. When employees understand and believe in the organization’s purpose, they’re more likely to embrace strategies that serve that purpose.
The plumbing company owner mentioned in Diana’s interview exemplifies this approach. By engaging his team in creating vision boards—both for the company and for their personal lives—he helps connect individual purpose with organizational goals.
Leaders must embody the mindset they wish to see throughout the organization. As Kokoska points out, “All change begins on the inside.” When leaders demonstrate curiosity, resilience, and growth-oriented thinking, these qualities ripple throughout the organization.
Reward systems, performance metrics, and operational processes must reinforce the desired culture. If you claim to value innovation but only reward hitting short-term targets, your systems contradict your stated values—and systems always win.
For employees to fully commit to strategic initiatives, especially those involving change or risk, they need psychological safety—the belief that they won’t be punished for making honest mistakes or speaking up with concerns.
Google’s Project Aristotle found that psychological safety was the most important factor in effective teams. When team members feel safe, they contribute more fully to executing strategy.
Just as financial literacy helps leaders understand balance sheets, cultural fluency helps them read and influence their organization’s culture. This means developing the ability to:
When culture and strategy align, they create a virtuous cycle. The right culture enables effective strategy execution, while successful strategy implementation reinforces cultural values.
Consider how this played out at Keller Williams Realty, where Diana Kokoska helped develop their renowned training academy. The company’s culture emphasized agent growth and success, which aligned perfectly with their strategy of providing industry-leading training and Coaching.
This alignment helped Keller Williams transform from losing $1 million annually on their training initiatives to generating over $500 million. As Kokoska notes, “It was all because of working on people’s mindsets.”
The key was recognizing that “our business affects our life and our life affects our business.” By addressing both the business strategy (what they wanted to achieve) and the human element (how people think and behave), Keller Williams created sustainable success.
While large corporations often struggle with culture change due to entrenched behaviors and siloed departments, small and mid-sized businesses have a natural advantage: agility.
With fewer layers of management and more direct communication, smaller organizations can more quickly align culture and strategy. This represents a significant competitive advantage in rapidly changing markets.
For small business leaders, the key is to be as intentional about culture as you are about strategy. This means:
As you develop your next strategic plan, consider these questions to ensure cultural alignment:
In today’s complex business environment, neither brilliant strategy nor strong culture alone is sufficient for sustained success. Organizations need both—and more importantly, they need alignment between the two.
As Diana Kokoszka reminds us, “If we don’t know where we’re going, how are we going to get there?” A clear strategy provides the destination, while a supportive culture creates the environment that enables the journey.
When organizations intentionally develop both elements in tandem, they create something powerful: a clear path forward and a collective will to Travel it together. That combination doesn’t just eat breakfast—it feasts on competitors who haven’t yet discovered the power of cultural and strategic alignment.
How does your organization’s culture support or hinder its strategic objectives? Share your experiences in the comments below, and stay tuned for our next article on implementing strategic plans in challenging environments.
Join me on “Leadership Powered by Common Sense”. The show where we explore all-things impacting leaders in today’s crazy world.
Note: Dianna Koskoszka quoted here was a guest on the show recently.
The post Culture Eats Strategy for Breakfast: Why the Two Must Work Together for Business Success appeared first on Business Advisor and Executive Coach | Doug Thorpe.
Notifications
