BY: Peter Cheel; Business Coach Sydney, 20 February 2025

Introduction

Peter Drucker (management consultant and author) is purported to have said, ‘Culture eats strategy for breakfast’. However, the Drucker Institute is quoted as saying that Drucker never actually said this. He said that “culture—no matter how defined—is singularly persistent” (1991 article, Wall Street Journal). I think this quote is important because if a company has a positive, enduring culture, it is more likely to lead to sustainable success over time and, therefore, may ultimately trump strategy.

A well-defined, developed, and executed holistic strategy is as important to organisational success as a healthy culture. Some may vehemently disagree with this statement, so let’s explore this further.

Many company strategies heavily focus on financials (growth, profitability, margins, investment, R&D), marketing, sales, operations, infrastructure, and sometimes IT. Organisation Culture is often reduced to a few motherhood statements (e.g. ‘people are our greatest asset’) rather than a robust strategy that defines the (aspirational) culture and outlines leadership development plans and core company practices that will serve to undergird and support the desired culture. When such a strategy is absent or is not executed with the leadership team’s commitment, the desired culture splutters and eventually dissipates. People then become disillusioned.

A First Case in Point

I recently read an article that surprised me. It was about companies that provide their people with, yes, wait for it, ‘unlimited time off with pay’ or UPTO (unlimited paid time off)! According to human resources group  SHRM, 7% of U.S. employees are eligible for this benefit. That’s not to be underestimated due to the population of the U.S. workforce. On average, workers with this benefit take 16 days a year, while employees on defined leave benefits take 14. Interesting.

They cited some challenges with this benefit:

• Given the pressures on cost-cutting and efficiencies in certain places, people may be reluctant to take longer time off. They may take 3-4 weeks when they see executives taking that time off.
• Working in a pressured work environment, one worker felt he could not take his leave, let alone unlimited paid leave.
• Some people perceive that their co-workers judge them if they take extra leave.
• Taking leave is naturally subject to the manager’s approval. However, problems arise without fair and consistent application throughout an organisation. One leader said it was difficult to reject leave as there were no company guidelines regarding the basis for approval/rejection.
• Some people felt stressed about having to discern and define what would constitute reasonable UPTO.

The examples cited in this scenario demonstrate a disconnect between espoused culture and sound company practices. It’s probably fair to assume that these companies wanted to create an attractive workplace where people were well-supported and provided generous benefits. No issue with that. The failure was not to have developed fair and workable company guidelines and practices, (which would have helped ensure the success of the benefit). Instead, the benefit creates a propensity to demotivate, confuse and stress out employees. Not a good outcome. I’m curious to know whether managers at these places of work received any training on the purpose and application of this generous benefit.

This brings me back to the importance and value of a well-defined and executable holistic strategy that serves and supports an organisation’s culture to flourish. It could have served the culture well had these companies defined the ‘why’ of this benefit, how it was going to support their culture, how they would equip managers to apply it fairly and consistently, and how they would communicate it and review it.

A Second Case in Point

 I had the privilege of working for a rapidly growing international organisation in the start-up phase. We used to say it was a ‘greenfields’ site! Much research went into defining the aspirational culture that would support the achievement of this new enterprise’s strategy and vision. One of the core values was trust, and another was empowerment with accountability.

The company established a benefit of unlimited sick leave. All employees underwent a very comprehensive Induction program, during which quality time was spent discussing the importance of the company’s culture, values, and overall ethos. Company practices and benefits were explained, outlining how they supported and were integral to the culture.

Managers participated in a different induction program focused on the importance of leadership and their role in ‘leading by example’ concerning the culture and the espoused values. These leaders were supported with coaching in their leadership to ensure their behaviour was consistent with the aspirational culture.

The unlimited sick leave policy was established on the principles of needs and trust. Employees were expected to use additional sick leave only when genuinely needed, with the understanding that their time off was legitimate.  Staff were informed that this benefit required maturity and responsibility, and any misuse would prompt company action. Overall, the policy was effective, albeit a few instances of abuse were addressed as needed.

In this second example, the desired company culture was an integral component of the company’s strategy and strategic plan. Developing and supporting leaders helped ensure that their leadership was consistent with the strategy.

Concluding Comments

You can have a brilliant strategy that covers all the success drivers, but a culture that undermines the strategy. Equally, you can have a culture coveted by other companies but without an executable strategy. That’s not to say that companies that fit into these two divergent examples won’t be successful….but at what cost, and how much better could they be if they had an aligned strategy, culture and practice?