Culture Is the Way

"Culture eats strategy for breakfast." This famous quote by Peter Drucker encapsulates the essence of why creating a meaningful and engaging organizational culture is the key to long-term success.

1. Culture as the DNA of the Organization

Culture is comparable to DNA in a living organism – it shapes the entire structure and functioning of an organization. It determines how people collaborate, solve problems, and view success.

Most companies operate with a culture, whether intentionally developed or not. A thriving culture drives employee satisfaction, facilitates innovation, and improves performance metrics. However, when neglected, toxic cultures can stifle growth and exacerbate employee disengagement. Leaders must actively shape their company’s culture to steer it toward positivity.

Companies that deliberately design and foster strong cultures consistently outperform others. These organizations align their culture with their business objectives, ensuring synergy between internal values and external goals. Culture is not static; it evolves and adapts as businesses grow, making it necessary for leaders to continuously monitor and refine it.

Examples

• Google has an open, collaborative atmosphere focusing on innovation and creativity, directly influencing its industry dominance.
• Zappos emphasizes customer service and employee happiness, which contributes to its strong brand recognition.
• On the flip side, companies like Uber faced criticism for toxic workplace culture, which hampered their reputation.

2. The Hard Work of Changing Culture

Shaping a culture requires deliberate action and long-term focus. Unlike launching a new product or sales initiative, cultural change doesn’t yield immediate results, making it a challenging but essential effort.

Organizations often fail to address culture because the changes necessary aren’t as immediately tangible as financial metrics. Leaders must understand that these “invisible” changes are essential for sustainable growth. Once a strong culture is in place, its benefits ripple through virtually every aspect of operations.

To begin shifting culture, leaders must treat it with the same level of priority as other financial or strategic goals. They should balance new initiatives with the necessary structural changes to ensure culture doesn’t remain an afterthought. Finally, they need clarity on the purpose and outcomes they’re striving to achieve.

Examples

• Netflix underwent a cultural overhaul by clearly defining employee freedom and responsibility as part of its workplace philosophy.
• Starbucks revitalized its connection to employees by emphasizing its core mission, leading to enhanced employee engagement and customer satisfaction.
• Kodak’s inability to adapt its culture to a digital-first strategy contributed to its gradual decline.

3. Defining Your Organization’s Cultural Purpose

The first step in fostering a productive culture is clearly articulating its purpose. This involves identifying shared values, goals, and how these principles should shape the daily behaviors of employees.

A strong cultural purpose statement acts as the guiding light for employees at all levels, clarifying what the organization stands for. When everyone operates with a shared understanding of the culture, it creates alignment and a unified sense of purpose.

Cultural success stories show that defining and living by a coherent set of values encourages buy-in from everyone in the organization. Building this shared agreement requires collaboration between leadership and employees to ensure relevance across all levels of the workforce.

Examples

• Patagonia’s commitment to environmental sustainability is central to its cultural identity, influencing every strategic decision they make.
• IKEA builds its culture around inclusion, simplicity, and positive impact, which resonates with both staff and customers worldwide.
• Microsoft redefined its cultural purpose under CEO Satya Nadella, emphasizing innovation and empathy, which revived its corporate trajectory.

4. Collaboration Brings Culture to Life

Organizational culture isn’t created in isolation. It requires the involvement and feedback of all employees, from senior executives to entry-level workers.

By fostering collaboration, leaders ensure the culture genuinely reflects the shared values and aspirations of the workforce. This inclusive process drives a sense of ownership, motivating employees to actively contribute to the cultural vision.

Workshops, surveys, and meetings designed to gather input from employees can be game changers. Engaged employees are more likely to feel heard and align their daily practices with organizational objectives.

Examples

• After significant backlash regarding its work environment, Amazon launched internal surveys to gather feedback and drive cultural reform.
• Walt Disney promotes collaboration across all levels to continuously deliver on its promise of “magic” to customers.
• General Electric’s internal “Work-Out” program empowered employees to create solutions to operational inefficiencies.

5. Leadership’s Role in Living the Culture

Leadership plays a central role in setting, evolving, and embodying organizational culture. Strong leaders model the behavior they expect from others, aligning words with actions.

When leaders visibly reflect cultural values, they set the standard for employees and assure cohesion between company messaging and behavior. Leadership ensures that culture becomes a lived experience rather than mere rhetoric documented in employee handbooks.

A company’s culture lives and dies by the example that leadership sets. Employees take their cues from those at the top, which makes authentic leadership paramount.

Examples

• Satya Nadella’s focus on collaboration and empathy transformed Microsoft into a leading innovator once again.
• Alan Mulally, as CEO of Ford, developed a trusting and unified culture to rescue the company from financial losses.
• Tony Hsieh famously built Zappos’ culture around employee happiness, directly contributing to its sustained success.

6. Embedding Culture Through Practice

Articulating culture is only the beginning. To create meaningful impact, culture must be infused into activities and decisions at every organizational level.

Embedding culture involves updating systems, policies, and practices to reflect values. Constant reinforcement ensures culture isn’t static but part of the organization’s ongoing reality.

Companies with ingrained cultural values tend to attract and retain top talent. Additionally, these organizations find it easier to navigate challenges as employees rally around shared objectives.

Examples

• Google’s emphasis on creativity is ingrained through flexible work environments and daily brainstorming sessions.
• Southwest Airlines encourages a family-first philosophy by prioritizing employee welfare in scheduling and decision-making.
• Toyota embeds its culture of excellence and efficiency through its production system known as “Kaizen.”

7. The Chief Culture Driver

Culture transformation requires someone at the helm to continuously guide its development – a role referred to here as Chief Culture Driver.

This responsibility is not confined to CEOs; anyone can take on this role by championing cultural values through everyday actions. Leadership at any level can act as the gardener tending this aspect of the company.

Being proactive, observant, and purposeful in day-to-day interactions helps cultivate a positive work environment consistently.

Examples

• At Salesforce, Marc Benioff actively promotes equality and philanthropy as part of the company’s core culture.
• Arianna Huffington’s leadership brought mindfulness initiatives to Thrive Global.
• Terry Brick transformed his company late in his career by taking small, purposeful actions daily.

8. The Impact of Strong Leadership

Exceptional leadership is often the defining factor between success and stagnation. Leaders create a culture when they set examples and earn trust.

Unaligned or disengaged leadership affects employee morale and productivity. Conversely, leaders who inspire their teams build companies that thrive and sustain progress over time.

This can be seen when companies undergoing transitions like mergers or expansion achieve seamless adaptation due to competent leaders.

Examples

• Apple flourished under Steve Jobs thanks to his visionary leadership and obsession with quality.
• GE achieved immense growth through Jack Welch’s focus on leadership training and culture.
• Uber’s leadership turnover provided an opportunity to recalibrate its values based on customer and employee input.

9. Leadership as a Shared Responsibility

Creating a leadership factory where every employee thinks like a leader fosters an entrepreneurial, empowered culture.

Leadership isn’t about titles; it’s about taking responsibility for creating change and positively affecting the team. By empowering employees to be leaders, companies amplify innovation and inclusivity.

Organizations grow when all individuals align their personal and professional goals with the broader mission.

Examples

• Netflix encourages managers to foster leadership qualities at every level.
• Nordstrom empowers employees with decision-making freedoms to fix mistakes themselves.
• At WL Gore & Associates, leadership by influence rather than titles drives team decisions.

Takeaways

1. Develop a cultural purpose statement that reflects your company’s values and share it with all employees.
2. Actively involve all team members in shaping and refining your workplace culture through feedback and collaboration.
3. Commit to small, consistent actions every day as a leader to make cultural values a lived reality for your organization.