The Weird but Important Link Between Strategic Planning and Culture...

AUGUST 18, 2016

Peter Drucker once famously quoted that "culture eats strategy for lunch!" I could not agree more strongly. This clever comment actually points to a significant and important connection between strategy and culture that may not always be obvious.

On the surface Drucker seems to be implying that culture is more important that strategy. That gets the strategists up in arms. However, I think Drucker is alluding to the fact that misalignment between strategy and culture will end up with culture subjugating strategy.

Why is this point important?

When we plan for the future in our business, envision new opportunities, dream about future outcomes, etc... we need to be aware of our human incentive systems. Those unspoken and often unconscious elements that drive the behavior of the people in our organizations. When we make plans that are not naturally supported by the reward systems in our business we are destined to see them come into conflict.

A classic example is when compensation is used to motivate a sales team to sell a new product. If the product is new, the sales cycle is different, or there is risk involved in promoting the product to existing clients it is almost axiomatic that the sales team will fail to effectively rise up to the economic incentive. Sales leaders are baffled. After all, aren't salespeople reward motivated players?

The failure here is that the social pressure to NOT FAIL almost always trumps the value of economic rewards. We know this is true because we live in a world where people continuously and consistently fail to take necessary actions to succeed, even in the face of overwhelming evidence. We don't make cold calls even though cold calls lead to opportunity. Rather, we avoid the pain of rejection and rationalize our behavior.

This misalignment of incentives and culture will crush the best plans on paper.

Want to succeed where others fail? Figure out what really, deeply, and emotionally drives your team. And then setup your processes and plans to take advantage of that natural wiring. It isn't easy to do, but when it's done, it's magic.