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12 Reasons Culture Eats Strategy for Lunch

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Twelve reasons why the saying that "culture eats strategy for lunch" originally attributed to Peter Drucker is valid, each illustrated with a real world example and a question for your organization. …

Twelve reasons why the saying that "culture eats strategy for lunch" originally attributed to Peter Drucker is valid, each illustrated with a real world example and a question for your organization. Adapted from the Values Coach "Cultural Blueprinting Toolkit" (www.CulturalBlueprint.com).

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  • 1. 12 Reasons Culture Eats Strategy for Lunch Joe Tye, CEO and Head Coach Values Coach Inc. Joe@JoeTye.com Copyright © 2013, Values Coach Inc.
  • 2. Adapted from the Values Coach Cultural Blueprinting Toolkit www.CulturalBlueprint.com
  • 3. 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
  • 4. Each of the 12 reasons is coupled with a question that can help you focus on building a stronger culture in your organization.
  • 5. Reason #1 People are loyal to culture, not to strategy
  • 6. Southwest Airlines didn’t earn the highest loyalty in the industry with its bags fly free and fuel price hedging strategies
  • 7. 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
  • 8. Question #1 How is bilateral loyalty expected and reflected in your culture – and what can you do to enhance that loyalty?
  • 9. Reason #2 Culture provides resilience in tough times
  • 10. A resilient culture was more important than new strategies in saving Starbucks
  • 11. That which will kill an organization with a weak culture will make an organization with a great culture even stronger. With apologies to Nietzsche
  • 12. The mortal struggle to bust the AT&T monopoly forged a resilient culture at MCI – and the company literally changed our world forever.
  • 13. The corrupt culture of WorldCom caused the company to collapse under its own weight when the pressure was on.
  • 14. Question #2 How tough and resilient is your culture? Would people be with you in a crisis the way the Starbucks baristas were?
  • 15. Reason #3 Culture is more efficient than strategy
  • 16. During the fuel price crisis of 1991, Southwest Airlines didn’t have to execute a strategy of pay cuts – employees volunteered for it.
  • 17. Nordstrom people don’t go above and beyond the call of duty because it’s in a policy…
  • 18. This is the Nordstrom policy manual in its entirety…
  • 19. Question #3 How can you foster a higher level of alignment with your operational and customer service strategies?
  • 20. Reason #4 Culture creates competitive differentiation
  • 21. Les Schwab sells the same tires you can buy anywhere else – but no one can compete with their culture
  • 22. “Advertising is a tax you pay on having an unremarkable culture.” Robert Stephens, Founder of Geek Squad
  • 23. Your culture is your brand! - Tony Hsieh
  • 24. Question #4 What one sentence would your people use in response to the question: “What is the cultural brand of your place?”
  • 25. Reason #5 Culture can spark a contrarian business strategy
  • 26. 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
  • 27. Toms Shoes has become a cultural icon – creating a level of success that could never be attained by strategy alone.
  • 28. 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?”
  • 29. You cannot buy publicity like that at any price – you earn it with a great mission and a powerful culture.
  • 30. Question #5 How can you inspire your culture to get behind something that no one else is doing?
  • 31. Reason #6 A brittle culture can doom even a great organization (or product)
  • 32. As witnessed by one of the most highly publicized funerals of our time…
  • 33. The fingers are all pointing in the wrong direction
  • 34. What really killed Hostess was a culture of labor- management hostility.
  • 35. A complacent culture can blind an organization to external threats
  • 36. These dedicated, hardworking people might be more dangerous to the future of USPS than email is.
  • 37. Question #6 What is your greatest cultural vulnerability?
  • 38. Reason #7 When strategy and culture collide, culture will win
  • 39. Nardelli’s hard-fisted GE strategies increased sales, profits, and stock price…
  • 40. At the cost of violating its people-centric values and ability to compete for the best talent.
  • 41. 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…
  • 42. Question #7 What is the greatest cultural resistance you can expect to your business strategies?
  • 43. Reason #8 Cultural miscues are more damaging than strategic ones
  • 44. Not fixing Dave Carroll’s guitar cost United $millions
  • 45. Not to mention the damage to the company’s already bad reputation for customer service…
  • 46. And the airline’s already troubled employee relations (they are the ones taking the brunt of customer ire).
  • 47. 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.
  • 48. Dave has since done two more United Breaks Guitars videos* and written a book. * Now with more than 20 million views
  • 49. In his book Dave asks a great question…
  • 50. “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
  • 51. Question #8 If (when!!!) you have a social media crisis will your people come to your defense or join in the attack?
  • 52. Reason #9 Strategies can be copied but no one can copy your culture
  • 53. All the major air carriers copied the Southwest business model: but they all failed the culture test.
  • 54. Hundreds of people tour Zappos every week but no one can copy the Zappos culture
  • 55. Getting a job at the Zappos call center is more competitive than gaining admission to Harvard
  • 56. 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!
  • 57. Question #9 How does your culture enable you to create competitive distinction (and related benefits like premium pricing)?
  • 58. Reason #10 Culture provides greater discipline than disciplinary action does
  • 59. 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
  • 60. People too young to remember these days hardly believe it when you tell them about it.
  • 61. Question #10 How does your culture enforce attitude and behavioral expectations?
  • 62. Reason #11 Culture provides a level of risk prevention that cannot be attained with strategy alone.
  • 63. Wal-Mart’s culture of low price at any cost has come at a huge cost to the company.
  • 64. Wal-Mart has spent over $100 million on the investigation of these ethical scandals.
  • 65. And become the butt of cartoonist jokes everywhere…
  • 66. Sam Walton would be rolling over in his grave!
  • 67. Question #11 Would the founder of your organization be cheering on the sidelines or rolling over in his or her grave?
  • 68. Reason #12 Culture will have a significant impact on your future bottom line.
  • 69. 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.
  • 70. “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
  • 71. Question #12 How can you enhance the economic impact of your culture?
  • 72. Your organization has a strategic plan – but do you have a culture plan?
  • 73. 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

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