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“Culture eats strategy for breakfast”

It’s the culture, not the people, that prevails in organizations. Culture happens in every organization no matter what. You can be active and create the “team operating system” you want, or passive and let random actions define it for you. Building it the way you want depends on being intentional. Decades of research on the power of being intentional when it comes to creating functional teams reveal that, as Peter Drucker famously said: “Culture eats strategy for breakfast”. This is true for teams, companies and even countries.

By Lab Agents, JC Velten and Kristine Moe Sirnes, Innovation Lab

Mindful organizations create amazing team operating systems where respect and diversity lead to innovation, while mindless organizations create the obstacles of their own demise by assuming that culture ‘just happens.’ It is the little things that matter, much more than the people you hire when it comes to the operating system of any group of people.

It’s the little things that count

Looking at our own home environment, many of us might recognise that the difference between a cosy family event, and an evening with loud kids and a frustrated spouse is the state you are in when you arrive home from work. The same goes for our workplace. Like being a parent guiding by doing and not saying, a company’s leadership can build an environment by acting, not talking

Harvard Business Review recently published an article on the X-Factor of great corporate culture. The article argues that quiddity, explained as “the inherent nature or essence of someone or something” might be useful when defining what company culture to cultivate. Does your founding story resonate with your employees and customers? Is the founder or CEO someone people want to connect with? Or be associated with? And what about your brand story, is it emotional and compelling in a way that it makes your stakeholders love you, and wanting to do business with you?

Furthermore, in his book, Trailblazer, Marc Benioff tells the Salesforce founding story of “how its core values are the company’s competitive advantage and the most powerful engine of its success”. 45.000 employees are connected through a common purpose of wanting to contribute to a better world. The company is younger than 20 years and has grown to become the biggest employer in San Francisco, and over the years it has handed out more than 300 million dollars and worked more than 4 million hours for free, for causes the employees are engaged in. This is culture.

Focusing on the wrong issue

On the other hand, there are countless stories of how great companies have lost their track related to lack of purpose, or a failed strategy due to wrong or insufficient priorities. 

When Satya Nadella took over as Microsoft’s CEO in 2014, his predecessor had grown revenues, but the company had faced countless struggles in the 2010 decade and the stock price had remained pretty much stagnant. People hated working there, and theirs was an aggressive ‘dog-eat-dog’ workplace. Microsoft was not a fun place to be at. After five years with Nadella, the stock price saw an increase of 245 %! He re-made company culture and building a cohesive team with a shared world view his number one priority. He recruited leaders who were triggered by creating the right culture, rather than by power. In 2018 Microsoft was rated as number 2 on Forbes list of the worlds best employers and the incredible increase of the stock price proves how the outside perception of the company has changed. 

Extreme research: The Stanford Prison Experiment

“What happens when you put good people in an evil place? Does humanity win over evil, or does evil triumph? These are some of the questions we posed in this dramatic simulation of prison life conducted in 1971 at Stanford University.”

This is how Stanford describes the thesis of a landmark – and shocking experiment on culture done in the early 1970s (https://www.prisonexp.org). It started as a simple experiment and had to be cancelled because culture took over people. Literally.

Long story short: Stanford researchers recruited students to participate in a ‘fake prison’ experiment. At random, half of them were assigned the roles of guards and half the roles of prisoners. They would come every day and get on their role for a few hours. A basement at the university was used for this fake prison, and volunteers were given uniforms or inmate suits, depending on their role. Many little details (culture) were carefully designed to recreate as much as feasible a real prison environment. After a very short time, the experiment had to be cancelled: because of the little things that researchers did to create a prison culture, guards became sadistic and violent, and prisoners became willing victims of abuse. Culture had taken over, and good people became evil or passive, depending on their fake role assigned at random.

Culture will take over, no matter what

Just like the researches in the Stanford experiment, the leadership of a company has the power to design the ‘little things’ that make up the culture – from having meetings start on time to a culture of giving back like the Salesforce example above. The company culture will evolve from these small things, no matter what… and no matter the kind of people who are hired.

There are indicators showing changes and shifts to where people are looking for trust. Edelman’s most recent Trust Barometer shows that we are losing faith in authorities and media,  and the report points out that this might be a great business opportunity for companies who want to play a role in the lives of its employees and stakeholders, by aligning its values to a greater cause.

The mindful (intentional) organization

Check out this link where Marc Benioff, presents himself as a CEO-activist and how he is “using the power of business as a platform for change”.

Closing thoughts: get going!

Gallup’s State of the global workplace report from 2017 states that only 10 % of the workforce in western Europe is engaged in their work. 90 % of the workforce’s lack of engagement is likely to represent a significant loss of value worth to its company. This is not only sand for individuals who spent a good chunk of their day in an office but unproductive for companies.

By putting culture first and building a mindful, intentional and resilient organization, the remaining 90 % of untapped potential can be realized. The good thing is that these operating systems that constitute the culture of your organization can change when teams and leaders become intentional in the little things – which, lines of code in computer programs – add up to create an operating system we call culture. Give it a try.

Kilde Innovation Lab