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Why Culture Eats Strategy for Lunch

For too long we have believed culture can’t be changed. But that’s because we have misunderstood the mechanisms that shape it.

While many people take credit for this piece of wisdom, management sage Dr. Peter Drucker is the person most commonly thought to have first uttered the phrase, “Culture eats strategy for lunch.”

Its popularity has been earned by its simple clarity and truth.

Until we understand the relationship between culture and strategy, every strategy is at risk. It’s critical to test strategy against culture, but even more critical is the challenge of creating a highly agile culture. According to Wikipedia, “Organizational culture is the collective behavior of people that are part of an organization…formed by the organization values, visions, norms, working language, systems, and symbols, it includes beliefs and habits. It is also the pattern of such collective behaviors and assumptions that are taught to new organizational members as a way of perceiving, and even thinking and feeling.”

A simple but dramatic example of this conflict: an organization with a long history of cut-throat bottom-line competitiveness that attempts to initiative a corporate social responsibility program, will probably see the effort fail. The program is completely at odds with how the business has long operated. Like a virus in the human body, the organizational white cells will gather around the change and kill it.

While understanding the implications of culture on strategy is critical, the elephant in the room for most leaders is how to change culture. I love the acronym for what shapes organizational culture: STAR…

  • Stories – by telling certain tales of what happened in the past (whether the events were positive or negative) the organization reveals  what it considers important
  • Taboos – the spoken or unspoken rules and norms of behavior reveals what is sacred or forbidden
  • Artifacts – the symbols from the past that people point to reveals what is valued or given special meaning
  • Rituals – the long-standing routines and practices reveals what is respected and treasured How does one change culture?

It is not that mysterious. I have seen success over and over again when significant culture change begins with changing the management system.

In Business at the Speed of Now I demonstrate how to create a “now” organization that thrives in today’s Mass Customization driven economy. The NOW Management System shapes the culture by shaping an organization’s stories, taboos, artifacts, and rituals. A shift in the management system is a major change in rituals (especially the Quarterly Target Reviews) and becomes the forum for creating new stories about the culture, altering the taboos and creating new artifacts.

A culture that engages its people and maximizes their authority to improve the customer experience, drive out waste and leverage revenue opportunities will enable every aspect of strategy.

Whether it’s breakfast, lunch or dinner, culture is the key to good competing.

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