Culture versus Strategy

Richard Joseph
Caribbean Business Services Limited

“Culture will eat Strategy for breakfast ANY DAY,” remarked Gurcan Kocdag, President, Doepker Industries Limited at the Workshop on Developing Global Competitiveness hosted by CARIRI last month. This resonated with me as I had read excerpts from Henry Mintzberg’s book on the “Rise and Fall of Strategic Planning” published in 1994, and was aware that our current enthusiasm with the strategic planning process was not shared by everyone. My follow up triggered a couple Google searches that turned up a podcast by Jeff De Cagna of Associations Unorthodox on “the Death of Strategic Planning.” Mr. De Cagna’s thought provoking position was based in the four following observations.

First, there is the lack of a stable, predictable environment. Change is moving at such a pace that new products that were never imagined before replace existing products in the blink of an eye. There is now so much overlap between goods and services, buyers and sellers, workplace and home that some commentators have described our environment as one of blur.

Second, strategic planning attempts an inappropriate combination of two different types of thinking into a single process. If strategy is to be innovative, it needs to be unfettered, while the planning process seeks to tie things down and eliminate variation. The internal logic of the processes is different.

Third, strategic planning is an instrument of control by the Chief Executive Officer and the Board of Directors. It attempts to keep the organisation on track in an environment of multiple alternatives and a rapid change.

Fourth, the strategic planning process is normally driven by an elite team of senior executives and the Board of Directors. He challenges whether such a usually homogenous group that is not close to the day to day activities of the organisation can come up with innovations that can exploit previously unknown opportunities. Some of the best insights as to how to fix the things that are not working in a company can come from those actually carrying out the work.

As a practitioner in the field I have struggled many times with the constraints associated with those observations, and often wondered if it was all a waste of time. Even though targets were usually met or exceeded, the means by which they were met were often quite different from what was envisaged in the plan.

Mr. Kocdag’s presentation did not set out the elements of the “culture” that he referred to as beating “strategy”, but from what he said, the elements of a desired culture could be discerned. These elements include a customer focus, open communication, decisions based on objective criteria and a ‘no blame” environment. Of these the last, “no blame” environment, was the only one that offered what may be a fresh insight for business activity in Trinidad and Tobago. To a significant extent, our society still uses models based on authority underpinned by coercion. When you do something wrong you get punished. In the current environment in which organisations operate, when employees do something wrong it reveals as much about the organisation as it does about the individual. In addition, a blame culture could cause employees to cover up their mistakes which could lead much more damaging consequences than if they were acknowledged and dealt with promptly.

After some reflection I believe that as with many things, truth lies somewhere in between. To go forward in business we must have clearly defined targets and expectations. With these in mind, we must determine the resources that we need and how we will go about acquiring them if we do not have them already. We must have a feedback and measurement system that will tell if we are heading in the right direction. Through communication, we should seek alignment and co-ordination of all of the components necessary to take us where we want to go. The larger the organisation and the more dispersed its operations, the more formal this process must be.

Implementation of strategy however, should be flexible. This is where the capacity to respond quickly to change will make the difference between maintaining momentum or being trampled by events. Culture equips the organisation with its capability to sense and respond to the environment around it. Culture is based on employees who are empowered through participation. They feel a sense of ownership in the implementation of strategy and know that they can make mistakes once they act in good faith, and learn from them. Leaders have to pay as much attention to developing a supportive culture as to developing strategy.

It seems then that strategy without a supporting culture is just a wish list, words on pieces of paper. However strategy is essential for direction and purpose. Culture, therefore does not beat strategy, both are essential elements of success.