There’s a quote, often attributed to the late Peter Drucker, that goes: "Culture eats strategy for breakfast." What it actually means, and whether Drucker even said it, are both debatable. What I do know, however, is that I’m having more and more conversations with charity leaders who want to develop their organisations, but are meeting what they call "cultural resistance".
By that, they mean that for the strategy to succeed groups of people will need to change – how they think, how they behave, how they interact with others and so forth – and that change isn’t happening.
There is a lot of myth and mystique around culture that stop leaders from seeing it for what it is – just one aspect of an organisation’s capability. If you don’t have the capacity, the skills, the assets or the finances to deliver your intended strategy, you’ll fail. In the same way, if you don’t have the right culture to deliver it, you’ll fail.
A strategy needs to explain how the organisation can develop its culture, just as it would need to explain how it’s going to build the right capabilities, if it’s to succeed.
The only difference is that most of us are more comfortable, and more practised, in changing a contract or a process than we are at changing our colleagues’ behaviours.
We’re more geared up for raising funds than for raising the cultural bar. And although it’s true that changing an organisation’s culture isn’t necessarily easy, it isn’t rocket science.
Once you’ve decided what the new culture needs to look like, there are only two steps: craft the narrative, then pull the trigger. The narrative is essential – it needs to articulate how those changes in attitude and behaviour that you want to see align with the deeper values of the organisation; how they will improve your ability to deliver your mission, your aims, your purpose.
Richard Baker, the incoming chief executive of the retailer Boots, for instance, pulled out one of Jesse Boot’s original store signs from the company archives to lend affirmation to his refocusing of the business around quality, service and value.
A recent client of mine, who is chief executive of a major charity, opened each of his culture change conversations with the phrase "every day we delay, we deprive more people of our support". Narrative can be a powerful lever for change, but it needs to be reinforced with action, and that’s where it gets tricky.
Pulling the cultural trigger is where we most often fall down, because it involves conflict with people who can’t or won’t change. It’s impossible to change a culture as long as the prime examples of that culture are allowed to stay in the organisation.
People aren’t stupid; sticking with individuals who won’t change how they behave makes you look insincere and disengages everyone. Whenever culture proves a fatal barrier to strategic change, it’s not actually because "culture eats strategy" – it’s because leaders don’t get rid of the wrong people fast enough.
Before Reed Hastings founded the video-on-demand service Netflix, he ran his own software business. It grew quickly and went through several mergers, leaving him, an inexperienced leader, with major cultural headaches that quickly became serious performance issues.
The lesson he took away from the experience was that he had allowed the culture to "eat the strategy" because of his own weak leadership, his self-declared biggest weakness being an unwillingness to fire people.
When he founded Netflix, he knew he’d need a solution, so he came up with one. "In most businesses," he says, "an average performance gets you an average reward. At Netflix, it gets you a generous severance."
His strategy to build the right culture for Netflix included, from day one, a policy of paying big money to people who, for cultural or performance reasons, needed to leave the business, so that he and his managers wouldn’t feel guilty about moving them out.
And in June 2018, Hastings pulled the trigger on his top PR executive, Jonathan Friedland, for twice using inappropriate language in meetings. In his memo to all staff, Hastings explains the exit and goes on to blame himself for not acting sooner. For Hastings, the need to continually develop the Netflix culture is absolutely no different to the need to continually develop its capabilities and its streaming offer.
All of which begs the question, how much of your leadership time, and of your strategic agenda, is explicitly focused on developing your culture, as opposed to developing your infrastructure, your finances, your systems or your people?
Because if your culture starts eating your strategy, you’ve only got yourself to blame.
Martyn Drake is the founder of the management consultancy firm Binley Drake Consulting