Why Culture Eats Strategy For Breakfast

Zappos

I spent part of this weekend putting together the first draft of a strategic plan for the primary school where I’m a Governor. The school is currently rated as ‘good’ by Ofsted and we aspire to be judged ‘outstanding’ at the next inspection. How we achieve this whilst being true to our vision -   a school where every child receives an education that enables them to reach for their dreams- got me thinking about the culture we will need to embed within the organisation.

Every organisation has its own unique culture whether it wants one or not. Put simply, culture is ‘the way we do things around here.’ It controls the way their people act and behave, how they talk and inter-relate, how long it takes to make decisions, how trusting they are and how effective they are at delivering results. Culture affects staff retention, external perception and financial performance irrespective of whether the organisation is public or private. And culture can bring a company down.

Take the example of Enron, a pipeline and energy business turned trading company which made fast growth its central mission. Enron showcased its company’s core values of integrity, communication, respect and excellence in beautifully carved marble in the lobby of their Houston headquarters but its reported financial position was sustained primarily by an institutionalised, systematic and creatively planned accounting fraud. With 20,000 employees and a reported turnover of $111 billion in 2000, it filed for bankruptcy in 2001.

Where the company culture is ethical, exciting and empowering, it is able to achieve exponential growth and attract, retain and develop the very best talent. (A staggering four-fifths of organisations have problems finding and keeping the right people, according to research from the Chartered Institute of Personnel and Development). Take Google, Zappos, Eventbrite and Hubspot for example

  • Founded in 1998, Google employs 50,000 people and has an annual turnover of £50 billion. Key to its culture is the belief that being great isn’t good enough; it’s a starting point, not an endpoint. ‘We set ourselves goals we know we can’t reach yet, because we know that by stretching to meet them we can get further than we expected.
  • Online clothing and shoe store Zappos is so serious about culture that it has created ‘Zappos Insights,’ a department to share the ‘Zappos Culture’ with the world. (Check out http://www.zapposinsights.com/). Started in 1999, it has created an annual turnover of $1 billion in just 10 years and won the FORTUNE 100 Best Companies To Work For award for six years in a row.
  • The founders of Eventbrite consciously engineered their culture to one of ‘Get Stuff Done.’ They don’t tolerate complaints, instead enforcing an attitude of ‘if something is wrong, you fix it’ among their employees. With ticket sales exceeding $1 billion and global expansion into 175 countries since 2006, their culture is delivering phenomenal results.
  • Hubspot, an inbound marketing software platform, describes itself as ‘maniacal about mission and metrics’ and ‘unreasonably picky about our people.’ This approach has enabled Hubspot to grow to 450 employees and a turnover of $52.5 million in just six years.

Getting the culture right within an organisation takes huge time, energy and commitment. There will be painful times when you have to say goodbye to people you really like but who do not fit with your company’s mission. But if you want your company to reach its full potential, then it is well worth taking the time and effort to work out what sort of culture you want to instil within your business and how you are going to create it.

Questions:

Do you agree that culture eats strategy for breakfast? What do you see as the most important cultural values in your business?

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