As Published in Business 2 Business, June 2009

Culture and Strategy: Declaring the Art of War

By Ira S Wolfe, Success Performance Solutions

Difficult times tend to expose the real character and personality of an organization. The true colors of leadership and the endurance of an organization come out when the going gets tough. When strategy is battered, a business has to rely on its culture to see them through.

But managers often think that culture is a messy, squishy thing that they can't really get our arms around. Culture often makes leaders uncomfortable because they don't feel that they can put their finger on it. So they go back to doing what they do best – strategize.

That prescription is like scheduling plastic surgery to more yourself more attractive when what you really need is a coronary by-pass.  When managers execute a strategy and ignore the culture, they disregard certain, sometimes irrational – but predictable – elements of human nature.  The importance of culture cannot be underestimated. Culture is so powerful, says Herb Kelleher, former CEO and current chairman of the board of Southwest Airlines, that it eats strategy for breakfast.

After speaking with dozens of consultants, business owners, and executives this month on the phone and in discussion boards about an either-or scenario for the priority of strategy and culture, the opinions were diverse. But the consensus was real– without a strong culture that supports a sound strategy, sustainable success cannot be achieved. Culture and strategy are two parts of the whole, the ying and the yang of organizational excellence. Developing a strategy and creating a culture must be inseparable and simultaneous. 

The purpose for understanding the culture of your organization is therefore simple: when aligned, the organization is likely to perform better, the potential for employee satisfaction and balance is likely to be higher, and the organization is likely to be more successful.  

Before I move forward, let me take a crack at defining culture so there’s no misunderstanding.  Culture is a pattern of shared assumptions and values about how things are done in an organization.  It determines how people communicate in the organization, what behavior is acceptable or not acceptable, and how power is distributed. Culture also determines how the organization meets goals and deals with outsiders.

Culture tells you a lot about an organization. What messages do leaders send with their words and actions? What type of behavior is being reinforced? Is conflict and risk encouraged or hindered? How do people communicate? How do people learn and share company knowledge? Is the organization open to change?

Aligning the values of a culture with a strategy is essential. The fatal error that management often makes is to brand a culture that sounds good but then minimize the importance of ‘walking the talk.’ 

Defining a strategy that aligns with your organizational culture begins with understanding your preferences for adaptability and focus.  Using this model, four categories of culture can form:  adaptability, achievement, clan and bureaucratic (See sidebar #2).  Either organizational synergy or dysfunction results depending on the alignment of culture with strategy.  For instance, pronouncements about employees being a company’s most important asset while managing with a dog-eat-dog achievement-driven strategy is sure to create confusion, tension, and disengagement.

Culture can be thought of as consisting of three levels, with each level becoming less obvious. Picture an iceberg with the tip exposed and the much larger mass submerged.

Above the surface and obvious to almost any employee or customer are the visible organizational artifacts such as dress, office layout, symbols, slogans and ceremonies.  Visible values are the well-scripted mission statements proudly displayed on the wall. They are the catchy, melodious marketing slogans. They sound good and look great but don’t hold much weight when it comes to sustainable inspiration and performance.

As you dive beneath the surface, you find what are called expressed values and beliefs. These values are not always obvious to a bystander but can be learned by listening to how people explain and justify what they do.  Invisible values are expressed at a conscious level – members of an organization intellectually get what they’re supposed to do but their actions are sometimes robotic and canned. For instance, good customer service skills is a science that can be taught but seeing your business through your customer’s eyes is an art. You can teach people to smile but instilling empathy is a different story.

When organizational values reach the deeply embedded invisible region, a company culture gains its strength.   Employees no longer just do what they’re supposed to do but want to do what they do because they believe it is the right thing.   Embedded values become the heart and soul of a business. It’s like the autonomic nervous system of your body. Human beings don’t have to tell their hearts to beat, lungs to breathe, and eyelids to blink. Enduring businesses don’t have to remind their employees to deliver exceptional customer service, get results, or think innovatively.  Behaviors emanating from a strong culture are second nature. They occur simultaneously and spontaneously. Organizational members don’t have to think about doing the right thing, they just do it.

Unfortunately most organizational cultures never develop these deep roots that penetrate much below the surface. Management often talks about culture, but walks strategy.  Only the most successful and sustainable businesses can lay claim to strategies that are seamlessly linked with deeply embedded value systems.

You hopefully can begin to see how a culture can shape – or disrupt- the best planned strategy as well as how a powerful strategy could be to create an enduring culture. 

But, don't be fooled. Defining the desired culture for an organization sounds easier than it really is. Getting leaders together to discuss whether it is more important to follow rules or act quickly can be a touchy conversation. Since culture is an outgrowth to a large extent of leadership, much of the culture is shaped by individual leaders' styles and work preferences. If a leader is generally hesitant to make decisions and stick to them, you may end up with an organization that talks about the same issue week after week in meetings but never lands on "what are we going to do about it?"

Declare an 'Art of War'

To find a source of wisdom about dealing with difficult situations and difficult times, all you need to do is go back 2500 years.  Time and space may have changed but the solution may be the same. The Art of War, written by Sun Tzu in the 6th century BC, offers a rich, interconnected group of strategies and tactics that focuses on how to take more effective action and accomplish goals when things get really tough.  Two of the most prominent strategies are called “forming and transforming.”

Forming and transforming is not merely a military strategy or an ancient, mystical practice, but rather a way of being in the world.  It melds culture and strategy.

Sun Tzu viewed the world as an interconnected whole. Nothing exists in isolation.  We can focus on and work with discrete parts of the whole but that is only effective when we realize that all parts are interconnected and form a whole.

The central teaching of the Art of War is called shih.  It concerns how to act dynamically and effectively within the interconnected world we’re part of.  Shih is not a mystical force.  To use a natural world analogy, it is like a system of mountain streams, creeks, and waterfalls that come together to form a large and powerful river.  The Art of War gives us rich images and analogies to teach us about the power of shih, such as “the rush of water, to the point of tossing rocks about” or “rolling around rocks from a mile-high mountain.”   In this way, the Art of War encourages us to observe closely how power and energy collects, builds momentum, and is released in a moment.  It asks us to pay fine attention to the terrain we find ourselves operating in and how others will operate in that terrain.  It asks us to transcend a limited vantage point and operate from the largest perspective we can find. 

Forming is the shape we give to ourselves and our world.  Forming is to culture as transforming is to strategy. Transforming is the way that we shape changes in relations to the conditions in the world, and most particularly in relation to our objective and the obstacles that lie in our path. Simply put, when we remember that everything is interconnected, we realize that how we are and how we act affects everything around us.

The Act of War makes it clear that we start the process of forming by recognizing how we conduct ourselves and the enormous impact our actions have on the others around us.  Forming takes place with the simplest gesture:  the orderliness of your desk, the chair you sit in when leading a meeting, what food and drinks you serve, the air and the lighting, how you initiate a conversation or communicate news – all these have an impact. On more strategic issues these small forming gestures contribute to creating victorious environments. 

At our best, an individual or an organization that can absorb the energy around him, integrate into his own perspective, and hold it together while others might be freaking out communicates confidence and strength. But regardless how brilliant the strategy that got you where you are, holding on to it can become a liability if it doesn’t continue to reflect reality as the ground changes.  Loosening the grip on a specific, known solution allows space for transforming. 

The Art of War tells us that transforming renders us “spirit-like” – untouchable, not graspable or solid, and thus not able to be attacked.  By holding firmly yet loosely to the aim, we give chaos and uncertainty the space to sort themselves out.

May the force be with you.

Sidebar #1

Some think it's too hard to change culture; that we can't change it even if we know what gaps we have between our current state and our desired culture. Not true. There are real, tactical activities and leadership actions that can shape a new culture.

If your organization is too cautious and can't move quickly enough to respond to new demands, encourage teams to make decisions faster and try new things. Then throw a big party the first time a team fails, as a visible demonstration that you appreciate and value risk-taking and new ideas.

If the organization lacks the needed focus on customers, then insist that every manager and above spend at least one day a quarter out in the field with customers.

Or if your organization makes decisions on the fly in the absence of adequate data, insist all projects are measured.  As Lewis Carroll wrote in Alice in Wonderland, “if you don't know where you are going, any road will take you there.”

There are lots of ways to measure culture these days. Just spend a few minutes on Google or Yahoo! and you will be overwhelmed with a plethora of standardized tools, customizable assessments and consultants you'll find willing to help.  Pick one.  Thinking about which one to choose won’t help!

While measuring and assessing an organization's culture at a given point in time is illuminating, defining what the strategically appropriate culture is for an organization is the goal, not measurement.  Once an organization has a desired culture in mind, and a picture of the current culture, then assessing the gaps and developing plans to close those gaps is all that it takes.

If you really want to make strategy happen, you can't ignore your organization's culture. And if that culture is not the right one to make the strategy happen, then you have a strategic mandate to change the culture.

Sidebar #2

There are several continuums that help define an organization's culture – adaptability and focus. Is the organization driven by results and achievement, or relationships and people? Does the organization have an internal focus, or an external focus? The intersection of these two continuums creates four categories of culture: adaptability, achievement, clan, and bureaucratic.

Each of the four cultures can be successful.  No one culture is better than the other. The emphasis on the different value categories depends on the organization’s strategic focus and on the needs of the external environment. An organization may have cultural values that fall into more than one category but research shows that the successful organization will lean more toward one particular category. 

The right choice should not fall to which one has the best marketing appeal.  Creating a culture that is aligned with strategy is not as simple as taking a few values from column A and others from column B. Culture creation is not an exercise in public relations.  It’s a strategic imperative.

About the author

As president of Success Performance Solutions, Ira S Wolfe helps organizations find and hire the right employees and identify high-potential leaders. He speaks nationwide on hiring, workforce trends, managing the generations in a presentation titled Geeks, Geezers, and Googlization.