'Culture Eats Strategy for Lunch'

In this exclusive excerpt from their forthcoming book, the authors discuss how a rich corporate culture provides a fertile environment for engagement and growth

Cultures are fluid. They evolve in direct relationship to the people who join, the people who stay and those who leave.

Relationships and belonging are at the very heart of culture. The definition of a culture seems to lie in the relationship of the people within it.

Our cultures are overlapping circles of relationships; each culture is defined by our membership or attraction to the circle or group. We are fathers, sons and brothers, and at the same time we are Presbyterian, American and Hispanic.

Every person is similarly “multi-cultural,” and peeling back the layers within reveals other subcultures which may be surprising or unique. Our relationship to one group may be highly relevant or (almost) completely irrelevant to another. To the extent that these overlapping cultures are highly interrelated, their alignment is of importance. When interrelated groups are in synch with one another, our world is copacetic. The rules we live by align, our relationships are simpatico and we are able to exist in the intermingling circles without angst.

The Drive to Belong

Unlike gravity, a culture’s “pull” on us is directly dependent upon the extent to which our belonging is important to us. If we seek and avow membership, the culture’s influence is the strongest and we are deeply affected by its evolution (or deterioration, based on our view).

The drive to belong binds the person to the culture and makes that culture – and everything within it – really matter. That is precisely why rabid sports fans always know the intricate details of their teams and follow associated news stories so closely. They are intensely interested in everything related to the team’s “culture” – through thick or thin, win or lose.

In terms of organizational culture, we can only imagine the joy in the boardroom if our customers demonstrated this level of affinity to our culture regardless of our product’s performance. Instead, many organizations face an increasing challenge in making their cultures really matter to their paid associates. 

And that serves to underscore the real pull of culture. Even when we pay people to show up, many still never really belong, and thus the culture has very limited influence.

The key, of course, is belonging – and that is always individual.

The Disconnect

When our nearest and dearest cultures start to change, it rocks our world. That’s why organizational change is so difficult for the people within – they’re not in control, and the change is taking place in the “nest” where they spend the majority of their time. It’s no wonder that the reaction is often far more emotional than rational.

There are essentially three ways that people “disconnect” from an organizational culture: 1) We can be terminated; 2) We can quit and leave; or 3) We can quit and stay. Each of these leaves its mark on the individual and the culture.

Termination. When individuals are “dismissed” from a culture they continue to cherish, they display all kinds of stress associated with that loss. We have seen dramatic, even violent, reactions that are a reflection of the culture’s importance to people. 

Quit and Leave. There are multiple ways to quit and leave, and the emotional baggage is dependent upon the circumstances. Some people are drawn to a better opportunity and others to escape a culture or situation that no longer works for them. When we disassociate ourselves with a culture (by our choice) it may continue to exert some influence. We may feel relieved at first, but later we come to think about our former employer with some fondness. 

Quit and Stay. The final way we disconnect from a culture is the most common of the three. We stay inside the formal lines, but the culture has lost its power to motivate, inspire and create belonging or growth within us. Examples:

• We live in the neighborhood, but don’t join the pot-lucks and shut the garage door before we get out of our cars
• We pay our dues, but don’t attend the meetings or functions, never help with the goals or share in the purpose
• We come to work from 9 to 5, do the minimum to get paid and save our passion for 5 to 9 and weekends.

Carnivores vs. Herbivores

All organizations must grow to survive. But the distinguishing characteristic of high performing organizations lies in the cultural tenets that shape that growth. High performance cultures keep driving sustainable and lasting growth, not the frenetic, short-term focus of the past few decades.

Organizations that buy growth through acquisitions have had a rocky road. Why? The expected outcomes often produced less than the sum of its parts. A number of studies over the past decades suggest our strategy to build growth through acquisition typically results in a net loss in the years that follow. Organizational revenues do not increase commensurately when two or more organizations merge. Much of the blame goes to culture.

At first glance, combining the strengths of two cultures would appear to be manageable, particularly since the survivors in both organizations would seemingly have a real incentive to cooperate. It stands to reason that when the goals are shared parties can more objectively partner together to achieve them.

Not so in practice. One leader shared her reflections on a recent merger between two very distinct organizations, one of which was described as “brutally competitive” and the other as “highly collaborative.”

Shortly after the merger was announced, over 600 consultants across the globe were called together on a teleconference where “Jay” the new President and “Del” the CEO would describe the vision for the combined organizations and calm the troops. As usual, at the end of the call they said they’d open the line for questions, and one courageous (and somewhat sarcastic) consultant spoke up:
“Yes, I have a question. How do you think the carnivores will do with the herbivores?”
Laughter was followed by a pause that turned into a few seconds of uncomfortable silence, and then both parties went “back to the script.”

The names change, but the story is as old as the “hunters and the gatherers.” The inevitable clash of two cultures begins to zap the energy of the newly-merged entity as people struggle to find their new place in an organization that has two separate and distinct histories, operating philosophies and people strategies. 

Loss of Momentum

Independent research suggests that organizations find it exceedingly difficult to make their cultures synch up after a merger, and the loss of energy and momentum affects them into the future.

Simply combining two organizations does not create a mutual culture. Often, it incites as much dogmatism around each culture’s “way” as any other outside threat might. As each separate culture struggles to hold on to their way, their people and their view, the game of trade-off begins in earnest. Performance is not its focus; instead it becomes a case of “you keep your sales guy, but we get to keep our marketing rep; we’ll use your operations plan, but our budgeting process.” 

Savvy leaders have long-recognized the importance of culture in the process of trying to acquire growth through acquisition. Ken Freeman, former CEO of Quest Diagnostics, reported that in every acquisition, the very first company attribute he reviewed (even prior to financial statements) was the culture. Did it match up to the current Quest Diagnostics’ culture? Would there be challenges? And where would complementary partnerships exist?

Cellular Level Growth

What are the defining characteristics of a culture built for long-term growth and sustainability? Answer: The growth is happening at a cellular level:

• The people within it are growing and developing
• There’s a shared confidence and optimism – a “can do” attitude
• Innovation is alive (spontaneously occurring) within work units and individuals.

This means that products and service to customers are seen and presented as significant enhancements to helping them become even more successful. In turn, market share and customer loyalty are deepening and lengthening.

Cellular level growth recharges the energy of the organization and promotes sustainability and future growth, because the people themselves are aware of and consciously connected to its customers and agenda.

Growth that occurs at the expense of the cellular level is short term and non-sustainable and signals the top of the curve is near. Why? Because when the people become a commodity to be “used up,” the organization’s energy is depleted.  But when they’re treated like an asset to be enriched, strengthened and developed, that energy source is continually renewed.

Cumulative and Sustainable Value

Organic growth isn’t sexy, but it is essential to survival. Depending upon leadership to deliver growth from the top is like pushing string; it’s very unlikely to deliver your intended results. Organic growth reflects incremental steps taken throughout the organization at every level that creates a cumulative and sustainable value to the customer.

There are three critical questions you need to ask in order to continually stimulate your organizational culture and growth:

• Can you afford to not assess culture to determine key enablers of success or significant consequences?
• Are managers/supervisors well equipped to address the individual (“what does this mean for me”) to prevent loss of performance?
• Are you really willing to integrate leaders and other influencers into the formal process?

New York Times bestselling author Curt Coffman currently serves as a Senior Partner of The Coffman Organization. Mr. Coffman spent over 22 years at The Gallup Organization and was the Global Practice Leader for employee and customer engagement consulting. He is the coauthor of First, Break All the Rules: What the World’s Greatest Managers Do Differently (Simon & Schuster, 1999) and Follow This Path: How the World’s Greatest Organizations Drive Growth by Unleashing Human Potential (Warner Books, 2002). Dr. Kathleen Sorensen, Principle Partner of The Coffman Organization, was the Global Practice Leader for The Gallup Organization in the area of talent selection and development. She specializes in leader/manager development, selection and performance improvement. For more information on The Coffman Organization, go to http://coffmanorganization.com

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