Culture and Strategy: The Bike Ride

By Daniel Forrester, CEO

We are big fans of HBR and are delighted that the cover story this month features the headline “You can’t fix culture.” Examining several mergers as examples, the article argues that culture comes along after leaders get their big ideas right and strategies come to life.

The article’s introduction explains, “in every case, when the leaders used tools such as decision rights, performance measurement, and reward systems to address their particular business challenges, organizational culture evolved in interesting ways as a result, reinforcing the new direction.” In essence, this is another way of looking at the intersection of strategy and culture (THRUUE’s passion), but this time culture is the lagging rather than leading indicator of success.

Personally, I love that the three-legged stool (decision rights, performance measurement, and rewards systems) was the lens through which these CEOs viewed and drove successful change. Cliff Smith, Jerry Zimmerman, and Jim Brinkley from the William E. Simon Graduate School of Business at the University of Rochester (where I proudly earned my MBA) designed this model in the 1980s. It is a timeless framework and I continue to use it in almost every conversation I have with boards and CEOs nearly seventeen years after learning it.

While useful, this model does not factor in that culture can be affected before, during, and after changes are made to the three legs of the stool. Culture lives in the consciousness of people (employees) and is formed by the values and behaviors that they see or want to see brought to life by leadership. Culture is “the way things are done around here.” As such, it cannot be so easily divorced from the strategic levers CEOs pull to drive change.

If THRUUE were to rewrite the article introduction, we would say, “Culture can’t fix everything, but leaders can and must measure it while also focusing on the three legs of the stool as a way to drive long-term performance and change.”

What is most heartening about this article and so much of what HBR has published this past year is the concept that culture is a constant companion to strategy. Every time CEOs look at one, they impact the other. Strategy is the front wheel and handle bars of the bike, and culture is the chain, cogs, and back wheel. Only when the rider (leadership) allows the two halves to work together will she/he win the race.

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