Why do strategy and culture, collectively, propel organizations to high performance?

All veteran business leaders know that strategy is vital to running a successful organization. Without strategic planning, you would end up running the company with a fly-by-the-seat-of-your-pants approach that would most certainly drive your business into the ground. In general, I live by the phrase “a failure to plan, is a plan to fail”. Why? Because if you focus on the burning operational fires all day yo never take a moment to develop the future of your organization. You may not know that your burning car is actually driving itself off a cliff.

Let’s look at a true scenario. GM, Ford and most U.S. automakers were very successful in the first half of the 20th century. They dominated consumer demand, penetrated and led all areas of the U.S market and were incredibly effective at manufacturing efficiencies and mass production. Now fast forward to the 1980’s, where Asian automakers were starting to penetrate niche and target markets selling on quality and new standards. The U.S companies had no insight as to the current markets and what these new Asian offerings could do to market share, nor had they planned for it, nor cared to. They rested on their laurels and a premature assumption that mass production invention, manufacturing expertise and market dominance for over half a century would ensure future sales. By the 1990’s and 2000’s U.S. car sales were second and third behind Asian automakers like Toyota and Nissan.

What was the #1 reason for this market loss for the U.S? The inability to strategically plan for the future. A focus on the following strategic elements could have saved the U.S. almost two decades or more of shareholder value loss, thousands of U.S. jobs, and from a loss of international industry dominance. Needed (and missing) U.S. Automaker Strategic elements:

  • Aggressive assessment to better understand the current and potential future market and environment.
  • Mitigation plans to thwart the eminent Asian automakers strategies.
  • Planning for new and emergent technological auto trends and consumer demands.

The three key themes that emerge from that scenario include: (1) assessment of your environment (internal & external), (2) mitigation scenario planning, and (3) strategic planning for the future.

What these three pieces collectively provide is: an effective organizational STRATEGY.

Effective organizational strategy takes form in organizational assessment first and foremost; examining core operations, processes, customer trends, financial trends, product/service advances, leadership agility and maturity, and most importantly, an understanding of the skills, interests and utility of your people. Strategy then moves into and involves development of vision, mission, goals, and objectives. Here we define the compass of where the organization is headed and articulate specific priority areas that are tactically executed to help the organization work towards that defined organizational direction. Without these elements, an organization would be hard pressed to make critical decisions or to even meet basic operational needs in the long term.

Perhaps you already understood the need for strategy; great. But before I go into the details around strategy development (future blog posts, so stay tuned!), I first want to share with you an important concept. There is a partner of Strategy that makes organizational success so critical; and without it, Strategy worthless. That organizational partner is CULTURE.

Culture shifts an organization from mediocrity to excellence. Take good strategy, add in strong company-wide culture, and you can make that leap from ordinary to distinct.

Why is culture so critical? Whether you are aware of it or not, culture infiltrates every aspect of your business. Every company has its own unique culture and it is present in leadership decision making, work ethic of staff, stated (and unstated) values, and throughout all of those aspects of Strategy that you worked so hard to develop. Culture impacts every member of your team from CEO to mid-level managers to administrative staff and everyone in between. Your organizational Culture is how you show up every day in your organization to make your strategy a reality.

A culture will emerge within your company regardless if intentional or not; so it’s essential to determine yourself what you want that culture to be. Like strategic planning, the culture of your company requires assessment, planning, development, and continual cultivation. My colleague Chris Cancialosi explores how to develop this kind of culture in a recent post.

Culture does eat Strategy for lunch; however, a more powerful way to view these two power-partners is to say, Strategy and Culture, collectively, propel organizations to high performance.

In my next post, I’ll share the specifics of taking that first step to ensure organizational strategy and culture are aligned, starting with organizational LEADERSHIP.