12 reasons culture eats strategy for lunch joe tye, ceo and head coach values coach inc....
TRANSCRIPT
12 Reasons Culture
Eats Strategy for
Lunch
Joe Tye, CEO and Head CoachValues Coach Inc.
Copyright © 2013, Values Coach
Inc.
Adapted from the Values
Coach Cultural Blueprinting
Toolkit www.CulturalBlueprint.com
We’ve all heard, and many of us have
affirmed, that culture eats strategy for
lunch (first attributed to Peter
Drucker). Of course, the reality is that
culture and strategy interact, and in
the ideal case they are mutually
reinforcing.
This presentation shares 12 reasons
why culture really does eat strategy for
lunch, each illustrated with real world
examples.
- Joe Tye
Each of the 12 reasons is
coupled with a question
that can help you focus
on building a stronger
culture in your
organization.
Reason #1
People are loyal
to culture, not
to strategy
Southwest
Airlines didn’t
earn the highest
loyalty in the
industry with its
bags fly free and
fuel price
hedging
strategies
Be loyal to earn
loyalty.
“We’ve made a commitment to
our staff that there will be no
layoffs related to this [lean]
work.”
J. Michael Rona, (then) President
Virginia Mason Medical Center
Question #1
How is bilateral loyalty
expected and reflected
in your culture – and
what can you do to
enhance that loyalty?
Reason #2
Culture
provides
resilience in
tough times
A resilient culture was more
important than new
strategies in saving
Starbucks
That which will kill an
organization with a
weak culture will make
an organization with a
great culture even
stronger.
With apologies to Nietzsche
The mortal struggle to
bust the AT&T
monopoly forged a
resilient culture at MCI –
and the company
literally changed our
world forever.
The corrupt culture of
WorldCom caused the
company to collapse
under its own weight
when the pressure was
on.
Question #2
How tough and
resilient is your
culture? Would people
be with you in
a crisis the way the
Starbucks baristas
were?
Reason #3
Culture is more
efficient than
strategy
During the fuel price crisis of 1991,
Southwest Airlines didn’t have to
execute a strategy of pay cuts –
employees volunteered for it.
Nordstrom people don’t go
above and beyond the call
of duty because it’s in a
policy…
This is the Nordstrom
policy manual in its
entirety…
Question #3
How can you foster a
higher level of
alignment with your
operational and
customer service
strategies?
Reason #4
Culture creates
competitive
differentiation
Les Schwab sells the same tires
you can buy anywhere else – but no
one can compete with their culture
“Advertising is a tax
you pay on having an
unremarkable culture.”
Robert Stephens, Founder of Geek
Squad
Your culture is
your brand!- Tony Hsieh
Question #4
What one sentence
would your people use
in response to the
question: “What is the
cultural brand of your
place?”
Reason #5
Culture can
spark a
contrarian
business
strategy
When I was an MBA student at the
Stanford Graduate School of
Business, if I’d written a paper
proposing a business that gave
away one pair of shoes for every
one we sold, I would have flunked
out!
Blake Mycoskie, Founder
of Toms Shoes
Toms Shoes has
become a cultural icon
– creating a level of
success that could
never be attained by
strategy alone.
From a Glamour magazine article – NOT a paid ad!
“Celebrities from Kristen Bell to the
Jonas Brothers to Heather Graham
have all pledged to go barefoot
tomorrow -- will you embrace your
inner hippie for a truly worthy cause,
too?”
You cannot buy
publicity like that at
any price – you earn it
with a great mission
and a powerful culture.
Question #5
How can you inspire
your culture to get
behind something that
no one else is doing?
Reason #6
A brittle culture
can doom even a
great
organization (or
product)
As witnessed by one
of the most highly
publicized funerals
of our time…
The fingers are all
pointing in the
wrong direction
What really killed
Hostess was a culture
of labor-management
hostility.
A complacent culture can blind
an organization to external
threats
These dedicated, hardworking
people might be more dangerous to
the future of USPS than email is.
Question #6
What is your greatest
cultural vulnerability?
Reason #7
When strategy
and culture
collide, culture
will win
Nardelli’s hard-fisted GE
strategies increased
sales, profits, and stock
price…
At the cost of violating its
people-centric values and
ability to compete for the
best talent.
He got booted for
trashing a great culture*
* Which might have
been his strategy
all along, since he
got paid a quarter
billion dollars just
to go away…
Question #7
What is the greatest
cultural resistance you
can expect to your
business strategies?
Reason #8
Cultural miscues
are more
damaging than
strategic ones
Not fixing Dave Carroll’s
guitar cost United $millions
Not to mention the damage
to the company’s already
bad reputation for
customer service…
And the airline’s already
troubled employee
relations (they are the ones
taking the brunt of
customer ire).
Within four days of the
video being posted more
than a million people
viewed it and United’s
stock price dropped 10%,
costing shareholders $180
million.
Dave has since done two
more United Breaks Guitars
videos* and written a book.
* Now with more than
20 million views
In his book Dave asks
a great question…
“Why is so much time and
energy being invested in
showing product differentiation
instead of sharing who the
company is and their unique
story? To me that defines an
opportunity lost.”
Dave Carroll: United Breaks Guitars
Question #8
If (when!!!) you have a
social media crisis will
your people come to
your defense or join in
the attack?
Reason #9
Strategies can be
copied but no one
can copy your
culture
All the major air carriers
copied the Southwest
business model: but they
all failed the culture test.
Hundreds of people tour
Zappos every week but no
one can copy the Zappos
culture
Getting a job at the Zappos
call center is more
competitive than gaining
admission to Harvard
That’s why a great culture
is the ultimate recruiting
tool
People don’t go to work
for Patagonia because
they love stuffing down
coats into boxes!
Question #9
How does your culture
enable you to create
competitive distinction
(and related benefits
like premium pricing)?
Reason #10
Culture
provides
greater
discipline than
disciplinary
action does
We don’t need
to tell people
they can’t
smoke in our
buildings or
discipline them
when they do –
coworkers will
take care of that
People too young to remember
these days hardly believe it when
you tell them about it.
Question #10
How does your culture
enforce attitude and
behavioral
expectations?
Reason #11
Culture provides a
level of risk prevention
that cannot be
attained with strategy
alone.
Wal-Mart’s culture of
low price at any cost
has come at a huge
cost to the company.
Wal-Mart has spent
over $100 million on
the investigation of
these ethical
scandals.
And become the butt
of cartoonist jokes
everywhere…
Sam Walton would
be rolling over in his
grave!
Question #11
Would the founder of
your organization be
cheering on the
sidelines or rolling
over in his or her
grave?
Reason #12
Culture will have a
significant impact on
your future bottom
line.
Your bottom line next year
will largely be determined
by your current strategies;
your bottom line in the
following years will be
more influenced by your
current culture.
“Every organization has a
culture. Unfortunately,
many, if not most,
cultures develop by
happenstance...”
Pamela Bilbrey and Brian Jones: Ordinary
Greatness: It’s Where You Least Expect It...
Everywhere
Question #12
How can you enhance
the economic impact of
your culture?
Your organization has
a strategic plan – but
do you have a culture
plan?
The Cultural Blueprinting Toolkit
features 6 one-hour webinars and a 180-
page workbook that will help you create
a blueprint for the Invisible
Architecture™ of your organization (the
Blueprint Behind the Blueprint™). www.CulturalBlueprint.com