I recently attended a conference and a rather high-profile and expensive training course. The saying that ‘culture eats strategy for breakfast’ came up several times. In one instance a participant also said that there would be no point in helping a firm with strategy, if the owner or CEO doesn’t understand finances.
The saying that culture eats strategy for breakfast implies that you have a binary choice, you can either focus on culture or focus on strategy. This is what is also referred to as a false dilemma: it is not an either-or proposition. In fact, if conducted correctly, the process of creating a strategy should identify the Limiting Internal Factors that are holding a business back. It may be that culture or a lack of financial understanding is the Limiting Internal Factor.
Perhaps the root cause of this saying comes from strategy being viewed in the context of how most business schools teach strategy. There is a great focus on Porter’s Five Forces, Pestle Analysis, market research and differentiation which are all External Analysis tools. This does not impel a business to look for the real cause of under-performing as a business, or for ineffectively executing strategy or for strategy just not working, which is related to the Limiting Internal Factors.
To find these factors, a business has to have the emotional intelligence component of self-awareness. Furthermore, that self-awareness has to be at a reasonably high level. In short, the firm must have a high Corporate held Emotional Quotient (ChEQ).
A bad culture, if untreated, will eat strategy for breakfast, but a business creating a strategy that stresses internal analysis more than external analysis, and that also has an objective and high level of self-awareness, will have determined that in order to reach their goals, the culture will have to be right.
Likewise consider the example of a business owner who has created a great product but does not understand finances. The comment that there is no point in helping them with a strategy was right, if that business isn’t helped with creating strategy in the right manner – focusing on internal analysis. The internal aspects of business are far more important than the information garnered from a PESTLE analysis. I focus my strategy analysis on Management, Organisational structures, Raison d'être, Team Esprit de Corp, Awareness’s – Self and Social, Relationship Management and Self-Management (a MORTARS analysis). If that business has a high ChEQ, they would be aware that they will need extra assistance with the finances, which beats closing the doors, just because you aren’t strong in finances.
A great strategy is built by design using multifaceted tools. Likewise, a strong culture in a reasonable sized business is rarely just an accident, it too is built by design. A great strategy will recognise the importance of culture and make culture an integral component of the strategy. Perhaps the saying about strategy and culture should be similar to a Helen Keller quote; Alone they can do little, together they can do so much.