“Does strategy drive culture … or does culture drive strategy?”
In this short piece, I provide an easy-to-use definition of culture, explain its critical relationship to strategy implementation, and answer the above question.
Culture can be defined as the way an organization does anything and everything. When the leadership team announces they want to change the organization’s culture, they are, by default, saying they want to change anything and everything. This is why culture is the hardest element to change in any strategy implementation. It impacts everything – the way you work with customers, manage meetings, dress for work, etc.
At the Strategy Implementation Institute, we continuously study what it takes to succeed in implementing strategy. There are seven critical components, of which culture is one. This is because culture drives the way an organization implements its strategy. Two organizations can have the same strategy, but exactly how they implement it is driven by their culture. Consider two airlines – United and Singapore. They both fly the same aircraft, over the same sectors, showing the same movies – but the experience is very different, because they have different cultures.
Challenges of Changing Culture
A current and popular trend among many larger organizations is to create a start-up culture, because a start-up culture is more agile, makes faster decisions, has less bureaucracy, and pushes the envelope in looking for new solutions to customer pain points. Many of these large organizations are, however, failing because culture is so hard to change.
Placing additional pressure on these larger organizations is the fact that many are currently focusing on becoming digitally driven. Also from our research, we have identified that one of the top three reasons digital transformation fails is that the culture does not change. (The other two are, failure of senior leaders to change their mindset and only tweaking the business model rather than whole-scale change). There are no shortcuts available if you want to change culture. It requires a sustained, aligned focus involving many parts of the organization, while driving and rewarding new desired behaviors. It also requires the leadership team to understand the impact of working in a hyperconnected and accelerated world.
The outcome, for many organizations, is that strategy now drives culture, which in turn drives the implementation.
Strategy → Culture → Implementation
This question – whether strategy drives culture or vice versa – is an ongoing debate, highly popular both on and offline. The fact that we are still debating it highlights that it is an unanswered and essential question.
To support my positioning that strategy drives culture, I often highlight the current challenges in implementing digital platforms; research reveals that two-thirds of companies are failing when it comes to this journey. Digital transformation often requires radical business model changes. It’s not about applying digital lipstick; it’s about changing every part of the business model to create new value for the customer. It also involves adopting new technologies, creating a data-centric culture, becoming “customer-obsessed,” training employees in new skills, becoming more agile … and changing workplace culture.
The culture does not drive digital transformation; the strategy does.
Robin Speculand is a recognized pioneer and expert in strategy and digital implementation. He is driven to transform strategy implementation by inspiring global leaders to adopt a different mindset and approach. The founder of three companies, Robin is CEO of Bridges Business Consultancy Int and co-founder of the Strategy Implementation Institute and Digital Leadership Specialists. A TEDx presenter and Thinkers50 nominee, he is a facilitator for IMD, Duke CE, and SMU, and part of Top 30 Global Guru. As a best-selling author, he has written five books including his most recent, Excellent in Execution and World’s Best Bank: A Strategic Guide to Digital Transformation.
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