Why Culture Eats Strategy for Lunch: Insights from Successful Organizations

Culture vs. Strategy

Culture is the embodiment of an organization’s values, beliefs, and customs. It defines how employees interact with each other, customers, and the outside world. In contrast, strategy is a plan for achieving a specific goal. Although both are essential, experts argue that culture is more crucial to an organization’s success than strategy.

Why Culture Eats Strategy for Lunch?

A study by Kotter and Heskett found that companies with strong cultures outperformed those without by a significant margin. These companies showed increased profitability, customer satisfaction, and employee engagement and retention. In contrast, companies that prioritized strategy over culture had low morale, high employee turnover rates, and reduced financial performance.

Why is that so? Culture sets the foundation for an organization’s success. It influences how employees approach their work, how they interact with customers, and how they deal with challenges. In contrast, strategy is a plan that is vulnerable to changes based on external factors. A well-established culture, on the other hand, helps an organization navigate changes with agility while staying true to its core values.

Insights from Successful Organizations

Numerous organizations recognize culture as a critical component for success. Here are a few successful companies that prioritize culture:

Zappos

Zappos, an online shoe retailer, is an excellent example of how culture impacts an organization’s bottom line. Zappos’s culture emphasizes customer service and employee satisfaction. The company’s customer service is legendary, with employees going above and beyond to help customers. Such emphasis on customer service has helped the company achieve significant growth, with over $2 billion in revenue in 2018.

Netflix

Netflix, the streaming media giant, has a culture that prioritizes innovation and flexibility. The company has a data-driven approach to decision-making, which helps it stay ahead of the competition. Employees are free to make decisions and challenge the status quo. Such flexibility has helped Netflix achieve significant growth, with over 200 million subscribers worldwide.

Conclusion

Organizations that prioritize culture create a working environment that fosters growth and success. A strong culture helps an organization navigate changes with ease, stay true to its core values, and achieve better financial performance. In contrast, companies that overlook culture have low morale, high employee turnover rates, and reduced financial performance. Therefore, culture is essential, and organizations that prioritize it are sure to achieve success in the long run.