When management consultant and author Peter Drucker said, ‘Culture eats strategy for breakfast,’ he could never have known how enduring his quote and its underlying concept would be. Decades later, and with daily examples from the corporate world that evidence these words, the idea that culture and strategy are intertwined is undisputed.

However, what is less well understood is how they link, the strength of their interdependence, and why integrating the two is essential to transform cultures and deliver business growth. That’s why I’ve focused on these areas in this blog.

What is the meaning of the culture eats strategy theory?

So, let’s get clear on definitions:

• Strategy expresses what a company wants to achieve over a given period. Senior leaders typically define it, with input from external consultants and other stakeholders.
• Culture defines the expectations that the company has of how employees should (and need to) behave to deliver the strategy

In this sense, the two are inextricably linked. The strategy feeds the culture, and the culture in turn enables the strategy. Defining and implementing the culture you need is contingent on having a deep understanding of the main drivers of your strategy.

When we think about culture as the how, it becomes easier to see why it eats strategy for breakfast. We’ll take an example. Say we have a client, and its strategy is to be the market leader, that has huge ramifications for the culture it needs. For example, it will impact:

• How the company hires and develops its people.
• The behaviors expected of employees.
• Systems such as reward, recognition, performance management etc.

The list could go on. This critical dependence is what’s behind Drucker’s quote. You can have the best strategy in the world on paper, but if you don’t know, and put in place, the supporting culture, you won’t achieve your goals.

Can you give examples of culture eating strategy for breakfast?

We have many, and I will use one to illustrate:

The challenge

We worked with a global manufacturer which needed to adapt quickly by developing technological innovation to thrive in a rapidly changing market. To fund the technological innovation required, an ambitious transformation plan was created with stretch targets across every level of the organization. After two years, the easy and obvious savings had been realized; but going further required a more radical shake-up of ways of working.

The company needed to move from an expertise-led, hierarchical, and siloed culture where long-serving, heroic leaders were deemed to know everything in their specialism, to one of openness, humility, and collaboration, where leaders actively encouraged disruptive thinking and inter-disciplinary co-operation to find new solutions and opportunities.

The solution

After doing a deep dive to understand the new strategy and the culture required to deliver it, we:

• Identified the priority few behaviors that were most needed to achieve the transformation and cost savings.
• Put an 18-month culture plan in place, focused on important key systems changes to reinforce and embed the new behaviors, and created a dashboard of metrics to track progress and assess the business impacts of the culture change. ?
• Executive coaching and development for Top 200 leaders to ensure role modelling via our Leading by Example program.

You can learn more about building a culture plan in our blog.

The results (first 12 months)

• $400 million dollars of savings, which exceeded the stretch target.
• +40 points increase in e-NPS scores from employees.
• One third of the top 200 leaders were rated as role models of the new behaviors.

This company was switching strategy, and the only way it was going to be successful was by changing its culture. As well as the behaviors, the systems and symbols also needed to be aligned with its strategic goals.

These three (behaviors, systems, and symbols) are what your culture is composed of, and individually and collectively send powerful messages. If your strategy isn’t delivering its expected results, look at these first.

What is the connection between culture and strategy in a business?

As I wrote earlier, culture and strategy are inseparable. Culture is strategic – it’s not fluffy, nice to have, or an afterthought. Identifying the culture you need is a critical part of the discussions and decisions regarding your strategy. In all my experience in this field, I have never seen a company achieve its strategy without defining and implementing the corresponding culture that will drive people’s behaviors in the right direction as laid out in the strategy.

What are your top tips for aligning culture and strategy?

1. Review & define your desired culture

After clarifying or changing your strategy, you should review and define your desired culture – does it support your strategy, now and for the future?

2. Have your leaders define your desired culture

As with the strategy definition process, your culture should be defined by your senior leaders, with the participation of Board members.

3. Align your top team for success

Once your culture is defined, your senior leaders should ensure communication, engagement, and alignment with your next layer of executives.

This is a critical step that is most often overlooked by organizations. Aligning your top team (just below the C-Suite) is essential for your desired culture to take hold. These leaders need to understand what is being asked of them in terms of practical behavior, why, and the support they will receive. All leaders need to recognize that it is one thing to write behaviors on a flip chart, it is another altogether to live them every day.

This dialogue between your leaders should facilitate conscious awareness, and allow opportunities to constructively challenge. It is the alignment that is essential. Without it, your people will receive mixed and contradictory messages, your culture will not change, and your strategy will suffer.

Learn how to help people managers lead culture change in our guide.

4. Use your leaders as a sounding board

For some businesses (e.g., public companies), we may recommend a broader discussion with the group of people managers of the second layer of the organization, as a sounding board before any final decisions are made.

You can learn more about how to increase collaboration at work in our expert guide.

5. Conduct a diagnostic of your current culture

Conduct a diagnostic of the current culture so your senior leaders understand the journey – the From To – that your business will need to go on. This will help to define the main priority areas of your target culture, and where the biggest gaps are, so that the plan can be focused and resourced accordingly.

How can ZRG help a client’s culture eat strategy for breakfast?

We at ZRG Consulting Solutions’ Culture Practice help our clients to define the culture they need to enable their strategy, and implement a structured process to support them throughout the implementation phase.
Powered by Walking the Talk’s methodology, we do this via several solutions, including:

• Target Culture Mapping. Creating clarity, fast alignment, and sharp focus among your leaders on your desired culture to deliver your strategy.
• Discover Culture Diagnostic. To uncover not just the what of your culture, but more importantly, the why. Getting to these root causes helps you identify where to increase efforts for change.
• Culture Insights Survey (CIS). Contrary to widespread belief, it is possible to measure culture, and we have a number of proprietary tools to do so. Our CIS means you get data and insights on where your culture is right now, and can track changes over time to assess the impact of your activities.

Culture eats strategy for breakfast. Maybe a more accurate expression would be ‘Strategy and culture feed each other.’ Not quite as catchy, but reflects the fact that the two are inseparable, mutually reinforcing, and, if aligned correctly, can create a virtuous circle that is the recipe for strategic success and business growth.

We can now support you in more ways than simply culture transformation – we partner in business transformation, leadership acceleration, assessment & succession planning, executive and leadership coaching, and talent acquisition.

Get in touch to learn more and get started!