12 reasons culture eats strategy for lunch

12 Reasons Culture

Eats Strategy for

Lunch

Joe Tye, CEO and Head CoachValues Coach Inc.

Joe@JoeTye.com

Copyright © 2013, Values Coach

Inc.

Adapted from the Values

Coach Cultural Blueprinting

Toolkit www.CulturalBlueprint.com

We’ve all heard, and many of us have

affirmed, that culture eats strategy for

lunch (first attributed to Peter

Drucker). Of course, the reality is that

culture and strategy interact, and in

the ideal case they are mutually

reinforcing.

This presentation shares 12 reasons

why culture really does eat strategy for

lunch, each illustrated with real world

examples.

- Joe Tye

Each of the 12 reasons is

coupled with a question

that can help you focus

on building a stronger

culture in your

organization.

Reason #1

People are loyal

to culture, not

to strategy

Southwest

Airlines didn’t

earn the highest

loyalty in the

industry with its

bags fly free and

fuel price

hedging

strategies

Be loyal to earn

loyalty.

“We’ve made a commitment to

our staff that there will be no

layoffs related to this [lean]

work.”

J. Michael Rona, (then) President

Virginia Mason Medical Center

Question #1

How is bilateral loyalty

expected and reflected

in your culture – and

what can you do to

enhance that loyalty?

Reason #2

Culture

provides

resilience in

tough times

A resilient culture was more

important than new

strategies in saving

Starbucks

That which will kill an

organization with a

weak culture will make

an organization with a

great culture even

stronger.

With apologies to Nietzsche

The mortal struggle to

bust the AT&T

monopoly forged a

resilient culture at MCI –

and the company

literally changed our

world forever.

The corrupt culture of

WorldCom caused the

company to collapse

under its own weight

when the pressure was

on.

Question #2

How tough and

resilient is your

culture? Would people

be with you in

a crisis the way the

Starbucks baristas

were?

Reason #3

Culture is more

efficient than

strategy

During the fuel price crisis of 1991,

Southwest Airlines didn’t have to

execute a strategy of pay cuts –

employees volunteered for it.

Nordstrom people don’t go

above and beyond the call

of duty because it’s in a

policy…

This is the Nordstrom

policy manual in its

entirety…

Question #3

How can you foster a

higher level of

alignment with your

operational and

customer service

strategies?

Reason #4

Culture creates

competitive

differentiation

Les Schwab sells the same tires

you can buy anywhere else – but no

one can compete with their culture

“Advertising is a tax

you pay on having an

unremarkable culture.”

Robert Stephens, Founder of Geek

Squad

Your culture is

your brand!- Tony Hsieh

Question #4

What one sentence

would your people use

in response to the

question: “What is the

cultural brand of your

place?”

Reason #5

Culture can

spark a

contrarian

business

strategy

When I was an MBA student at the

Stanford Graduate School of

Business, if I’d written a paper

proposing a business that gave

away one pair of shoes for every

one we sold, I would have flunked

out!

Blake Mycoskie, Founder

of Toms Shoes

Toms Shoes has

become a cultural icon

– creating a level of

success that could

never be attained by

strategy alone.

From a Glamour magazine article – NOT a paid ad!

“Celebrities from Kristen Bell to the

Jonas Brothers to Heather Graham

have all pledged to go barefoot

tomorrow -- will you embrace your

inner hippie for a truly worthy cause,

too?”

You cannot buy

publicity like that at

any price – you earn it

with a great mission

and a powerful culture.

Question #5

How can you inspire

your culture to get

behind something that

no one else is doing?

Reason #6

A brittle culture

can doom even a

great

organization (or

product)

As witnessed by one

of the most highly

publicized funerals

of our time…

The fingers are all

pointing in the

wrong direction

What really killed

Hostess was a culture

of labor-management

hostility.

A complacent culture can blind

an organization to external

threats

These dedicated, hardworking

people might be more dangerous to

the future of USPS than email is.

Question #6

What is your greatest

cultural vulnerability?

Reason #7

When strategy

and culture

collide, culture

will win

Nardelli’s hard-fisted GE

strategies increased

sales, profits, and stock

price…

At the cost of violating its

people-centric values and

ability to compete for the

best talent.

He got booted for

trashing a great culture*

* Which might have

been his strategy

all along, since he

got paid a quarter

billion dollars just

to go away…

Question #7

What is the greatest

cultural resistance you

can expect to your

business strategies?

Reason #8

Cultural miscues

are more

damaging than

strategic ones

Not fixing Dave Carroll’s

guitar cost United $millions

Not to mention the damage

to the company’s already

bad reputation for

customer service…

And the airline’s already

troubled employee

relations (they are the ones

taking the brunt of

customer ire).

Within four days of the

video being posted more

than a million people

viewed it and United’s

stock price dropped 10%,

costing shareholders $180

million.

Dave has since done two

more United Breaks Guitars

videos* and written a book.

* Now with more than

20 million views

In his book Dave asks

a great question…

“Why is so much time and

energy being invested in

showing product differentiation

instead of sharing who the

company is and their unique

story? To me that defines an

opportunity lost.”

Dave Carroll: United Breaks Guitars

Question #8

If (when!!!) you have a

social media crisis will

your people come to

your defense or join in

the attack?

Reason #9

Strategies can be

copied but no one

can copy your

culture

All the major air carriers

copied the Southwest

business model: but they

all failed the culture test.

Hundreds of people tour

Zappos every week but no

one can copy the Zappos

culture

Getting a job at the Zappos

call center is more

competitive than gaining

admission to Harvard

That’s why a great culture

is the ultimate recruiting

tool

People don’t go to work

for Patagonia because

they love stuffing down

coats into boxes!

Question #9

How does your culture

enable you to create

competitive distinction

(and related benefits

like premium pricing)?

Reason #10

Culture

provides

greater

discipline than

disciplinary

action does

We don’t need

to tell people

they can’t

smoke in our

buildings or

discipline them

when they do –

coworkers will

take care of that

People too young to remember

these days hardly believe it when

you tell them about it.

Question #10

How does your culture

enforce attitude and

behavioral

expectations?

Reason #11

Culture provides a

level of risk prevention

that cannot be

attained with strategy

alone.

Wal-Mart’s culture of

low price at any cost

has come at a huge

cost to the company.

Wal-Mart has spent

over $100 million on

the investigation of

these ethical

scandals.

And become the butt

of cartoonist jokes

everywhere…

Sam Walton would

be rolling over in his

grave!

Question #11

Would the founder of

your organization be

cheering on the

sidelines or rolling

over in his or her

grave?

Reason #12

Culture will have a

significant impact on

your future bottom

line.

Your bottom line next year

will largely be determined

by your current strategies;

your bottom line in the

following years will be

more influenced by your

current culture.

“Every organization has a

culture. Unfortunately,

many, if not most,

cultures develop by

happenstance...”

Pamela Bilbrey and Brian Jones: Ordinary

Greatness: It’s Where You Least Expect It...

Everywhere

Question #12

How can you enhance

the economic impact of

your culture?

Your organization has

a strategic plan – but

do you have a culture

plan?

The Cultural Blueprinting Toolkit

features 6 one-hour webinars and a 180-

page workbook that will help you create

a blueprint for the Invisible

Architecture™ of your organization (the

Blueprint Behind the Blueprint™). www.CulturalBlueprint.com