Strategy vs. Culture in the Small Business

In a newsletter of March 17, 2011, Graham Mitchell, writing in ActionSTEPS, a publication of ActionCOACH, says that “culture eats strategy for breakfast”. He went on to elaborate that many times the quest to change a company’s strategy is frustrated by the company’s culture. There is much truth in that. Indeed, it is one of the reasons that very serious managers of change, especially those coming into an organization to implement change, will remove many older employees because they know that the required changes will be resisted.

But I do have an issue with the position. Because I think that strategy should be influencing and determning culture. In starting from a clean slate, building the business’ strategic plan, there is a vision statement, a mission statement, and a values or culture statement. The latter frequently is loaded with the founder(s)’ personality but depending on how much of zest is brought to the project, and also how involved and engaging the statement is, the values or culture statement might have to be signed off once the full plan is completed.

Why wait? Because the business is set up to achieve its mission. The mission is going to be approached, if the culture/value statement is to be believed, with some values that are going to be in alignment with the business’ realities. For example, if the business will be making guarantees about strict timeliness of their services (as in the case of a courier company, for example) then the firm will act in that way, making sure that employees have a culture of ‘going the extra mile”. Hence it will evolve a culture of no blames and excuses.

Consider therefore, the manager who has a group of people who thrive on excuses and trying to develop effective strategy for a courier business. He will have the experience of “culture having strategy for breakfast” because the strategy was not infused with the right culture or values in the first place. The task will be herculean.

And, contrary to some views, the small business needs effective strategy. It is with effective strategy that growth takes place and necessary innovation occurs. So, entrepreneurs need to hone strategy that will evolve the appropriate culture that will ensure optimization of resources as the firm grows.

In the small business, the culture is often lead by the founder(s) through what they do and what they allow. This causes a culture to evolve and even in times of growth, as the business matures it gets to face realities that starts to call out for a culture that inspires and ensures continued success and by that time it is too late.

This is when the problem starts to show up in profits, motivation, and lack of enterprise. The firm then starts to make changes – in personnel, technology, management, equipment and training – trying to reverse the tide and by this time the culture is too pervasive and it eats into scarce resources in an attempt to introduce strategy.

So, define and operate in ways to evolve a culture early, via strategy. It should be guided by the real business you are in.