Peter Drucker, the management consultant, educator, and author, came up with the phrase culture eats strategy for breakfast, but what does it mean?
In a nutshell, no matter how great your business strategy is, your plan will fail without a company culture that encourages people to implement it.
What does good company culture mean?
Good company culture is often confused with how the early tech giants dressed their offices with beer fridges, foosball tables and beanbags. This stuff may be a tiny part of creating a good company culture, but culture is about how employees behave in critical situations.
Great company culture is when the majority of employees and their managers can deal with pressure, respond creatively and positively to any challenges, and treat each other and their clients with respect and integrity.
Solid and healthy cultures emerge when people at every level of the organisation feel a true purpose in their work. They don’t feel burdened by their work; they feel energised and engaged. When a problem arises, they can work as a team to solve the issue and then celebrate the success.
This is why, no matter how brilliant your company’s strategy is, the plan will be difficult or impossible to implement without a healthy culture.
Let’s look at an example of how culture eats strategy for breakfast.
An example of how culture eats strategy for breakfast
When 60 former staff at the Scottish brewer and pub chain Brewdog published a letter on Twitter claiming that the business was run on a “culture of fear” and “toxic attitudes”, the CEO and senior managers were left reeling.
The letter, posted on Twitter, alleged that Brewdog fostered a culture where employees were afraid to tell their bosses when they had concerns.
Addressing James Watt (the CEO), the letter said: “You spent years claiming you wanted to be the best employer in the world, presumably to help you to recruit top talent, but ask former staff what they think of those claims, and you’ll most likely be laughed at. Being treated like a human being was sadly not always a given for those working at Brewdog.”
Watt responded by saying: “It is fair to say that this type of fast-paced and intense environment is definitely not for everyone, but many of our fantastic long-term team members have thrived in our culture. Our culture is built on rewarding and developing great people and focussing on growing our business.”
If Watt thought that was a good response, he was wrong. The group of former staff responded by saying: “Many of our signatories worked for Brewdog for years and were extremely high-performing. To suggest that those who apparently couldn’t hack it are somehow less worthy in your eyes is grotesque; we believe this shows your true feelings of disregard for your staff, both former and current.”
The accusations of a toxic culture, led from the top, were highly damaging to the Brewdog brand.
There were countless stories and features published in media outlets worldwide. The brand became associated with a ‘toxic culture’. The proposed IPO was delayed as the firm tried to tackle the damage done by the furore.
The company says it will go ahead with an IPO in 2022. Investors now take ESG (environmental, social and governance) very seriously, so it will be interesting to see how they react to Brewdog’s flotation.
As an example of how culture eats strategy for breakfast, what happened at Brewdog is a definitive case study.
In summary – What does ‘Culture eats strategy’ mean?
The quote culture eats strategy for breakfast means that no matter how well-designed your strategic plan is, it will fall flat unless your team shares the appropriate culture.
At the end of the day, the people who implement the plan matter.
Unless your employees are enthusiastic about your company’s vision, they won’t put much effort into executing your strategy.
A company’s culture is created primarily by the actions of its founders and executives, and it is the role of the board to monitor the culture. Most of it is created unknowingly by the founders. Whether you work on your company’s culture or not, it will still develop.
An effective board understands a company’s behaviour and challenges the areas where values aren’t aligned or understood.
Boards should invest time and resources into assessing their company culture and consider how they report on it because culture does indeed eat strategy for breakfast.
Watch Catherine Smith McKiernan discuss people and corporate culture and explain why the S in ESG is now a business imperative and not a nice-to-have.