Company Culture and Business Strategy: What’s the Connection?

By Candace Coleman, CultureWise Content Manager

“Culture eats strategy for breakfast.” The catchphrase coined by management expert Peter Drucker resonates with every business leader who grasps the link between organizational culture and their company’s success.

Drucker’s trope illustrates that no matter how detailed and solid a CEO’s strategy is, all bets are off if the people implementing it aren’t operating within the framework of a strong culture. Strategy is outlined on paper, but a company’s culture—the human factor—is how it’s executed.

CultureWise CEO David J. Friedman takes the concept a step further. He believes that culture shouldn’t be an afterthought—something leaders tap into to bring strategy to life. Instead, he argues that corporate culture should be a vital part of the strategic plan from the outset.

Intentionally and thoughtfully developing the right culture to achieve strategic goals is as critical to outcomes as carefully crafted sales, budget, and operational plans.

Why Leaders Don’t Link Strategy and Culture

In his book, Culture by Design, Friedman outlines various reasons that leaders don’t include corporate culture in their strategic planning:

1. They see culture as a “soft” issue. Most leaders are more comfortable talking about areas of their business that seem more concrete, such as sales, operations, or finance. In addition, they have methods to track efficacy in these departments, so it’s easier to take action and make progress.
2. They view culture as an HR topic. Many leaders see culture in the domain of the HR department and not the responsibility of the CEO. Yet, culture’s impact on retention and performance makes it more of a strategic and financial topic than an HR issue. As such, it should be one of leadership’s primary priorities.
   
   
3. They think culture is less controllable. There are straightforward ways to regulate other aspects of a business. For instance, it’s relatively easy to create high-quality products and drive out variation in manufacturing processes. But getting employees to be consistent is much more difficult. People are incredibly variable and bring with them a host of idiosyncrasies. It can seem overwhelming to try to align behavior within a workforce.
   
   
4. Their education didn’t include training about culture. Most business school curricula include subjects like marketing, strategic planning, and finance, but few delve into culture. That trend may be evolving, but many current leaders are products of “old school” education. People are naturally more inclined to address things they understand.
   
   
5. Working on culture never occurred to them. Most leaders think of culture as something that happens on its own. Beyond composing a vision, mission, and values, and setting a good example, they don’t believe there’s much they can really do about culture.

As widespread as they are, Friedman makes the case that none of these excuses hold up. Culture may seem more intangible, less familiar, and harder to control than other business areas. But leaders who intentionally and systematically develop their company’s culture create a structured asset. They’ll thoroughly understand it because they defined it.

How Does Company Culture Support Strategy?

Leadership guru Patrick Lencioni makes this observation in his book, The Advantage:

“An organization’s strategy is nothing more than the collection of intentional decisions a company makes to give itself the best chance to thrive and differentiate itself from competitors.”

If leaders make culture a part of their strategy, as Friedman recommends, they should craft it to support those high-level decisions. But there is one distinction among these different strategic areas.

Plans to achieve specific goals should be flexible and revisited regularly so an organization can stay on track and change course with inevitable industry shifts. But while other areas of strategy can fluctuate, the basic elements of a strong culture should remain constant.  

Workplace culture, by definition, is the common set of behaviors exhibited by staff members. To create a foundational culture, leaders should identify core behaviors that will enable people to drive all areas of company strategy successfully. Then, their aim should be to define, model, and reinforce these behaviors to empower their employees to execute plans effectively as they evolve.

3 Company Culture Pillars that Facilitate Strategy

Culture isn’t about what people do in their jobs, but rather it is how people perform their work, collaborate with teammates, and interact with the public. The behaviors that specifically support strategic goals center on three key areas:

• Accountability
• Teamwork / Trust
• Work Ethic

Accountability

For culture to support other areas of company strategy, it must be rooted in accountability. A culture outlined with exceptional behaviors is little more than wishful thinking unless people hold themselves and each other accountable for performing them.

Being accountable goes beyond having the responsibility to do something—it’s taking ownership of the outcome of a situation.

Essential elements of accountability that influence strategic goals are:

• Establishing expectations.

Setting and asking for clarity about expectations are critical behaviors to implement strategy effectively. When people are confident that everyone is working from mutual assumptions, they can perform their work confidently and efficiently.

• Delivering Results.

Strategic goals aren’t met because employees make an effort; they are achieved when they find a way to get things done. Staff members who follow up on everything and hold themselves accountable by tracking their progress put muscle behind company strategy.

• Honoring Commitments.

When people always do what they say they’ll do, they establish a pattern of dependability that allows everyone to operate more effectively. Conversely, if employees only sporadically follow through on commitments, an organization can’t make progress on strategic goals.

Teamwork / Trust

A company can’t enact strategy unless team members can effectively collaborate and rely on one another. Behaviors that form the underpinning for teamwork and trust are:

• Demonstrating Integrity.

Coworkers need to know they can count on one another to act with integrity, tell the truth, and treat everyone with respect. Strategy and goals will be undermined without that basic understanding. Healthy organizational culture is grounded in ethical behavior. 

• Fluid Communication.

Nothing gets done if people don’t effectively communicate. Leaders who expect their team to enact strategy should define behaviors for their culture that enhance communication. These would include:

• Careful listening
• Speaking up to move things in a positive direction
• Sharing information
• Communicating clearly and directly

• Having a Team-first Attitude.

The only way to achieve organizational goals is through a unified effort. Strategy falls apart when egos get in the way. A culture that reinforces teamwork discourages silos and helps people prioritize the big picture instead of personal agendas.

Work Ethic

The way people go about their work significantly influences their ability to attack strategic goals successfully. A strong culture will reinforce productive work habits such as:

• Striving for Continuous Improvement.

Employees who want to help achieve company goals are always looking for ways to do things better. They don’t settle for “the way we’ve always done things” and instead make an effort to execute tasks better, faster, and more efficiently.

• Taking Quality Personally.

Companies are more likely to hit goals and improve if their organizational culture reinforces people’s attitudes about doing things well. While it’s essential to work efficiently, taking pride in consistent quality output also moves the needle on accomplishing strategic targets.

• Being Proactive.

Employees prevent goals from derailing when they plan, prioritize their objectives, and tactically evaluate tasks. A culture that encourages people to look ahead and anticipate issues will facilitate all other areas of strategy.

Is Culture Part of Your Company’s Strategic Plan?

Nothing influences every aspect of a business more than its organizational culture—from daily operations to accomplishing long-range aims. With that in mind, every CEO’s strategic plan should include a thoughtfully structured corporate culture.

Learn more about developing and sustaining a high-performance company culture with a free, two-chapter download of Culture by Design. In the book, Friedman explains his logical, eight-step framework to build the kind of culture that enables businesses to achieve ongoing success.

CultureWise is the company inspired by the method outlined in Friedman’s book. It offers business leaders a turnkey operating system to create high-performance organizational culture. Explore the website to discover how it works and subscribe to the CultureWise newsletter to read the latest news about business culture.