Management Guru, Peter Drucker, once said, “Culture eats strategy for breakfast.” He’s right, of course. Culture, not brilliant strategy, is the secret sauce for organizational achievement and breakthroughs. According to a study by Harvard Business School, companies with strong, virtuous cultures outperform those without such an atmosphere by 5 times ROA; that’s an astounding number.
Why is that? In my years as a student and teacher of culture, I can cite at least three reasons.
- Culture creates fit. We’ve all had shoes that didn’t fit us and all we could think of all day long was getting them OFF! The same negative is true about culture. If you’ve worked in a company where you just didn’t feel that you truly fit, you know the impact. You can’t wait to get home. But, when you’re part of a group where you belong, where you are a round peg in a round hole, you feel it and your performance excels. Moreover, getting you to move on would be extremely hard because it’s your home!
- Culture eliminates fear. To quote W. Edwards Deming, in Out of the Crisis, “Drive all fear from the workplace.” Fear, insecurity, looking over your shoulder, and corporate politics are incredibly destructive and create an environment where huge amounts of energy are expended in self-defense and not pursuing the company mission. Fear is the “mind killer.” But when fear is reduced and driven out by transparency and trust, people are free to collaborate, innovate, and win.
- Culture releases discretionary energy. Everyone always has more to give. Why don’t they? Culture. If I’m busy protecting myself and blocking my teammates’ political maneuvering I’m not going to let it all out for the company. No contest, trip, bonus or other extrinsic program will alleviate this. But when I believe, when I’m bought in, when I’m a true part of something bigger than myself, I will gladly go the extra mile and then some. Strong culture brings this.
We’ll discuss culture further in the next installment of this series.