Culture eats strategy for breakfast

mariodoennebrink
Feb 15, 2024
13 min read

It is the intangible but omnipresent network of values, norms and paradigms that shapes a company - its culture.

Peter Drucker, a pioneer of modern management theory, once coined the words:

“Culture eats strategy for breakfast”

This powerful statement anchors corporate culture as the foundation upon which every strategy, goal and vision is built and realized.

During my time as an executive at a leading software company, I saw firsthand how cultural currents could make or break the implementation of a people-centered reorganization and cloud transformation.

It was the narratives, the heroes of everyday life, a consciously chosen language and behavior, as well as a culture of guided self-organization based on the promotion of personal responsibility that not only supported the change, but made it possible in the first place. They became the tools in my daily work to not only initiate change, but to anchor it in the core of the company's soul, because the best plans and most innovative ideas do not come to fruition if they are not in line with the culture within a company prevails. They form the guardrails within which innovation and growth can unfold.

The culture of a company is much more than an appendage or a nice addition. It is the essence that permeates everything else.

What I learned is that culture is not to be dictated, it has to be cultivated. It arises where managers not only set directions, but above all also practice listening, empathy and a clear understanding of values. This blog post is an invitation to think about the invisible forces at work in every company. It is a plea not to take corporate culture for granted, but rather as something that you have to work on every day. As a strategic imperative that requires leadership – values-based leadership.

The relationship between culture and strategy

Implementing strategies in a company is often like navigating a ship through stormy seas. The complexity and volatility of today's markets require an agile corporate structure that is able to react quickly and efficiently to changes. Actually, you need a lot of sturdy speedboats with the same goal - a maneuverable fleet - instead of a giant tanker. But without a solid foundation – a culture that supports and sustains the strategy – the fleet can easily veer off course.

The need for compatibility between strategy and culture cannot be overemphasized. A strategy that is in harmony with the corporate culture and therefore falls on fertile ground is not only more easily accepted by employees, but can also be implemented more sustainably. The reverse is also true: cultures that are too rigid to adapt to new strategic directions can inhibit or even prevent a company's progress.

In practice, this means that any strategy that is developed must take into account not only the current market landscape, but also the internal landscape of the company. The strategy must be expressed through the measures implemented by the company - ideally even reflected in the company's structures - and can be experienced by all employees and managers. It is an interaction that requires fine coordination so that strategy and culture reinforce each other.

My own experience implementing OKRs (Objectives and Key Results) has underscored the importance of this connection. OKRs are not only a tool for goal setting, but can also serve as a lever for cultural change. When introducing OKRs in said software company, I found that they only reach their full potential when the culture is ready to absorb them. On the other hand, they offer very concrete, operational starting points for initiating cultural change through the use of cultural tools, which I will come to later. An exciting interaction in my opinion.

These experiences have shown me that successful strategy implementation is much more than just achieving quarterly goals. It's about creating an environment in which employees identify with the company's goals and see them as their own. An environment where strategy doesn't just exist on paper, but lives in people's minds and hearts. Only then can a strategy truly come to life and move the company forward.

Value-oriented leadership and its immense importance for companies

Values-based leadership is the backbone of any strong corporate culture. It goes beyond simply setting goals and is based on the intrinsic motivations and moral foundation on which a company stands. Responsibility, passion, performance, customer orientation, innovation, teamwork and trust are not just words, but embody the character traits and behaviors that collectively form the heart of a company. They represent a moral compass that shows direction - in both stormy and successful times.

A values-oriented leader sees himself not only as a manager of resources, but also as a cultivator of values. Through her actions – and just as importantly, her inaction – she shapes the norms and expectations within the company. When managers exemplify the values they expect from their teams, the corporate culture becomes a living, breathable space in which employees can develop and grow. The implementation of values-oriented leadership therefore ideally starts at the top. When managers exemplify values, they set standards for the entire company. At Intel, for example, former CEO Andrew Grove exemplified Intel's highest cultural standards, which helped create a strong, consistent corporate culture. Grove's nickname at Intel was Mr. Clean, where he exemplified a corporate culture characterized by a focus on detail, an avoidance of status symbols, and a willingness to experiment without fear of making mistakes. This role model at the top allowed these values to be integrated into all aspects of the company.

The shaping of corporate culture through value-oriented leadership can be both subtle and explicit. An example of this is promoting an open error culture in which employees are encouraged to take risks and learn from mistakes instead of hiding them. This requires leaders to show vulnerability and admit their mistakes - a powerful signal that promotes trust and innovation.

Another example is encouraging teamwork and collaboration rather than competition for status and titles. This creates an atmosphere of support and shared pursuit of a goal, rather than one in which employees work against each other. Values-based leadership recognizes that the success of the individual is inextricably linked to the success of the team.

In my professional career, I have seen how a corporate culture based on strong values can not only improve employee satisfaction and retention, but also have a direct impact on technological transformation, sales success, customer service and the company's bottom line. In times when business strategies must change quickly, a solid foundation of values provides the consistency and stability that allows employees to adapt and thrive.

This type of leadership has the potential to profoundly shape company culture. An employee of integrity who adheres to the values of a company culture will always behave the same way under similar conditions, which means for managers that they do not have to suffer from the inefficiencies that can arise from formal rules, procedures and regulations. This creates an environment of trust in which employees feel empowered to take initiatives and contribute to the shared success of the company.

This is how I was able to determine that the strongest and most lasting changes within a company take place when they are supported by a deeply rooted value system. This enables employees to identify not only with the 'what' and the 'how', but above all with the 'why' behind their tasks. Such anchoring in company values creates a resilient culture that is able to adapt to constant change without losing its identity.

In summary, values-based leadership is not a luxury, but a necessity for modern companies that want to survive in a rapidly changing world. It creates a culture that is strong enough to sustain change and flexible enough to make short-term and necessary adjustments.

Cultural elements as tools

Cultural elements as leadership tools are the link between a company's past and its future. Legends, stories and heroes are more than just folklore - they are the narrative fabric that shapes a company's collective memory. They convey values and norms, illustrate what is valued and what is not, and thus define the culture of a company. They are the vehicles that not only transport values and norms, but also bring them to life in everyday actions.

Using legends and stories can create a deeper level of engagement and identification with the company. A good example of this is the legendary story of an employee who had a groundbreaking idea and was supported by the company despite initial skepticism, which ultimately led to one of the company's greatest successes. Such stories are often repeated and become part of the company's DNA, showing that innovation and risk-taking are valued.

Similarly, “heroes” – employees who are recognized for their exceptional contributions – can serve as role models. They personify the company's values and provide a concrete model of what success looks like in the context of those values. By highlighting these heroes and telling their stories, they become living examples of company values.

Language and behavior are also powerful tools for shaping corporate culture. The way challenges, failures, and successes are discussed can promote a culture of openness and learning or a culture of blame and punishment. A leadership style based on open communication, recognition of performance and constructive feedback can create a culture of trust and continuous improvement.

Other effective tools for cultural leadership include regular, value-related employee discussions, appreciative and value-related feedback systems and the targeted promotion of employees who live the company values in an exemplary manner. Another tool can be the design of spaces that promote transparency and openness and thus reflect the company's core values.

A personal example from my management experience shows how cultural tools can be used: In various change projects, we consciously identified and promoted "change champions" (name changed). These key people were, without ever saying so literally, “heroes” of the transformation who acted as multipliers of the new culture. Their stories and experiences were shared in internal conversations to inspire others and accelerate desired culture change.

In conclusion, it can be said that cultural elements in values-based leadership should not be seen as a nice addition, but rather as essential components that form the backbone of any strong corporate culture. They are the tools that enable leaders to communicate, reinforce and live values.

Current trends and their meaning

In a rapidly changing (working) world, current trends have a significant impact on the development of corporate cultures. These developments are not only reactions to global changes, but also drivers for a new type of leadership and collaboration. The most important trends that influence corporate culture include diversity and inclusion, sustainability and environmental, social and corporate governance (ESG), remote work, new benefits for employee retention as well as an open error culture and feedback systems.

Diversity and inclusion in the workplace

Today, diversity and inclusion are much more than just buzzwords; they are essential to creating an innovative and resilient work environment. The increasing recognition of diversity and inclusion in the workplace is reflected in a cultural shift towards greater diversity and equality. Companies that foster an inclusive environment where every person feels valued regardless of gender, ethnicity, sexual orientation or disability report increased creativity, innovation and performance. Such a culture attracts and retains talent by creating an environment in which differences are welcomed and seen as added value.

Sustainability and Environmental, Social and Corporate Governance (ESG)

Sustainability and ESG have become critical factors for the long-term success and legitimacy of companies. Customers and employees are increasingly demanding that companies think beyond their own profits and make a positive contribution to society.

This includes environmentally friendly practices, social commitment and ethical actions. Companies that incorporate these values into their culture not only build a strong brand image, but also motivate their workforce by instilling a deeper meaning in their work. In this way, identification with the company can be strengthened, which can lead to greater loyalty.

Remote work and its impact on corporate culture

The pandemic has accelerated the trend toward mobile or remote working, where employees move between the office, home office and other locations. This trend requires adapting corporate culture to encourage collaboration and communication across physical boundaries. Companies need to find ways to strengthen feelings of belonging and community while supporting flexibility and autonomy.

It has been shown that certain creative processes work better in onsite meetings than online. In human communication, in addition to codified knowledge, non-codified content is also passed on in the form of gestures and facial expressions - largely unconsciously. These promote understanding and therefore creative processes and they support important elements of communication within the corporate culture. My experience has been that mobile working creates a better work/life balance and considerable freedom, which massively supports productivity, but occasional on-site meetings are essential, especially for meetings that require creativity. The combination of both makes companies more productive while meeting the needs of employees.

New benefits and employee loyalty in the modern working world

In the modern working world, traditional benefits such as salary increases or insurance packages alone are no longer enough to retain employees in the long term. Instead, companies rely on personalized, meaningful and creative solutions such as flexible working time models, further training and development opportunities, health and wellness programs and measures to promote work-life balance. Measures that promote social group cohesion, such as sporting or leisure activities outside of working hours, should not be underestimated in this context. A craft beer and a few blaring speakers after “fuck-up night,” or a soccer tournament against the neighboring insurance company are just a few examples of activities that work in certain corporate cultures. These new benefits reflect a cultural shift toward a holistic approach to employee satisfaction and engagement.

Error culture and feedback systems

An open error culture and effective feedback systems are crucial for learning processes and innovations. Companies that foster a culture of trust and continuous improvement, where mistakes are seen as learning opportunities, create an environment where employees feel safe to try new ideas and give and receive feedback. This culture not only supports the personal growth of employees, but also drives company development. The further development of products and services in the form of iterations represents an extremely successful, customer-centered strategy. The targeted generation of direct customer feedback ensures that products and services are developed and further developed in an extremely market-compliant manner. This approach almost eliminates any development “bypassing the market”. In such a culture, mistakes are not only tolerated, but almost celebrated, because with every mistake you find you learn and get better, which benefits the customers and thus makes the product/service better. A company that uses this will always be adaptable and flexible, and will generate many more new ideas and approaches to improvement than companies that only deal critically with errors. Who makes a second suggestion in a company if the first one has failed - for whatever reason - and you have subsequently experienced some kind of repression, even if it is just a critical look without any form of recognition?

These trends demonstrate that corporate culture must be a dynamic and adaptable force in an ever-changing world. The successful integration of these trends into the corporate culture can help companies to be successful not only in today's but also in the future working world - especially against the background of demographic developments.

They require flexible, adaptive leadership and a culture that emphasizes diversity, sustainability, flexibility, employee engagement and continuous learning.

Experiences from practice

As an executive at a technology company, I was faced with the challenge of executing a people-centered reorganization and comprehensive cloud transformation. The projects overlapped in time. The experiences I gained not only gave me deep insights into the complexity of change processes, but also underlined the indispensable role of corporate culture as the foundation for any change.

The new or reorganization aimed to make our structures more flexible and adaptable as well as to focus more on the need of our employees for meaning and the ability to influence. The sociocratic model developed was based on the fact that complexity, in contrast to complexity, cannot be controlled and that the greatest possible adaptability should be created through decentralized decision-making structures and a higher degree of personal responsibility.

For the cloud transformation - both a technical milestone and a milestone in terms of the business model - the agility of the teams, the technical know-how for the new form of delivery and the efficiency of our operational processes should, among other things, be increased.

Both initiatives required a profound change in the way our teams work and think.

A key insight was that technological change without cultural adaptation is doomed to failure. Technology was the easy element; the real challenge was creating a culture that encouraged openness to change, continuous learning, and an error-friendly attitude.

The application of cultural leadership tools

In order to bring about this cultural change, we rely on various cultural leadership tools. These included, for example, regular town hall meetings at which visions and goals were made transparent and discussed, mentoring programs that promoted exchange and personal development, and workshops that were specifically aimed at promoting the principles of agile work and to convey personal responsibility.

A key element was the example of the new values by top management. Every manager was encouraged to be a role model not just in words, but above all through actions. This meant being open to feedback, admitting your mistakes and showing a continuous willingness to learn.

Another element was to simply hold back as a manager in certain processes of gaining knowledge in order to give employees the important experience of having worked out and developed things themselves. What has been experienced always has a stronger effect than what was “pre-chewed” or merely transported, because it has really been internalized.

The importance of setting an example and role model function of managers

Management modeling the desired culture had an immense impact on the entire organization. It created a basis of trust and encouraged everyone to actively participate in shaping the change processes. The leaders became catalysts of change by showing that they themselves were willing to learn new things and step out of their comfort zone.

Looking back, I can say that these profound changes would not have been possible without a strong and adaptive corporate culture. It was the culture that enabled us to navigate uncertainty together, overcome resistance, and ultimately realize a successful transformation.

Experience taught me that value-oriented leadership and consciously shaping corporate culture are not optional "nice-to-haves", but rather crucial factors for success in changing markets. They form the foundation on which technological and organizational change becomes possible.

Summary

In a world where young, purpose-driven talent no longer simply work to make a living but expect their work to be meaningful and produce tangible improvement, corporate culture must evolve. It must be sustainable and flexible at the same time. She must not only tolerate mistakes, but celebrate and learn from them. The goal is a culture that not only supports strategies, but brings them to life. Values-oriented leadership is at the center of this cultural transformation, as a guide, moderator and source of inspiration. As I have learned in my own professional journey so far, it is the cultural nuances - the stories, the "heroes", the language - that bring a strategy to life and ensure that the breakfast at which the culture eats the strategy becomes a feast of success.

Over the course of this blog post, I have examined the deep connection between values-based leadership and corporate culture, examined current trends that shape corporate culture, and illustrated the application of these principles in practice through personal experiences. The core message is clear: A company's culture is not just a soft factor in management, but a central driver for the sustainable success of a company.

The trends presented - from diversity and inclusion to sustainability and ESG to remote working models, feedback culture and new benefits - show that corporate culture is in constant evolution. It must adapt to the changing expectations of employees, customers and society.

The conclusion we can draw from this is that a strong, values-driven corporate culture is an indispensable foundation for every company. It not only promotes employee satisfaction and commitment, but also increases innovative strength and competitiveness.

Therefore, my call to action is clear: reflect on the culture of your company. Is it really aligned with the values that are important to you? Does it support your strategic goals? And above all: as a manager, do you live this culture? Investing in cultivating a strong, values-driven culture is an investment in the future of the company.

And as always: If you need support, advice or action:

I like to do that. 😉