In a large manufacturing company formed by multiple mergers, culture plays a critical role in the success or failure of strategic initiatives. Peter Drucker's adage, "culture eats strategy for breakfast," is illustrated by the challenge of merging distinct corporate cultures. The article identifies three types of culture that often clash in such scenarios:
- Visible Culture: The branded, outward-facing culture that has little impact on daily operations.
- Invisible Culture: The underlying, evolving culture shaped by leadership and daily practices.
- Fragmented Culture: A mix of individual, team, and national cultures that may conflict with each other.
The key to successful cultural integration lies in focusing on the invisible culture, which drives real behavior and outcomes. The article outlines a case study where a company used cultural profiling tools to identify and address cultural gaps, focusing on those that were most disruptive. This approach allowed them to harness diversity of thought, drive innovation, and create a more cohesive and effective organization. The company found that embracing and managing cultural differences, rather than trying to eliminate them, led to better business outcomes and stronger engagement from employees.
If culture eats strategy for breakfast, what’s for lunch? Making a change program stick
For the past few years, I’ve been working with a large manufacturing company formed from the merger of two sizable firms, each itself a merger of several smaller companies. This process resembles the reverse of cell division, combining distinct entities with unique characteristics, motivations, and goals into one large organism, united only by their broadly similar products.
A dangerous clash of cultures
Peter Drucker famously said, “culture eats strategy for breakfast.” This highlights that while strategy is crucial, culture determines whether that strategy is embraced and executed. If the culture is wrong, the strategy will fail. In a merger, cultures don’t so much clash as explode in a big bang similar to the creation of the universe. There are at least three unreconcilable cultural groupings.
- Visible Culture: The outward-facing, branded culture designed by branding teams, often influenced by surveys and focus groups, but with minimal impact on daily operations.
- Invisible Culture: The actual culture that evolves over time, shaped by decisions, leadership examples, and what is rewarded in the organization, often conflicting with the visible culture.
- Fragmented Culture: The mix of team, national, and informal group cultures down to individual preferences, as inconsistent as human nature.
A change consultant might suggest designing a new visible culture, but this rarely affects productivity and performance. Instead, think of culture like an iceberg or a hippo—most of it is beneath the surface, influencing daily operations and attitudes. Organizations need to focus on the invisible culture to foster collaboration, cooperation, and creativity, which drive growth and profitability.
A Change Case Study
The organization I mentioned succeeded by following these steps:
1. Identifying Invisible Cultures
They used a cultural profiling tool, Worldprism, to uncover the shared unwritten rules that define a group. This tool provided an objective snapshot of how employees viewed relationships, hierarchy, creative tasks, and time management.
Culture underpins everything else
Culture is the way a group does things and communicates internally and externally. It determines what is good, bad, and acceptable; what is normal or abnormal; what is aspirational and what is rejected. This means that it is the ‘why’ behind our default reactions and behaviors – the things we do, think, and say when we’re not actively conforming. Culture determines whether we stay an extra 15 minutes at the desk to make sure a document is brilliant, rather than just good enough; it influences whether we give constructive feedback or just yell at someone when things go wrong; it is behind whether I go out of my way to add value, or whether I coast along marking time until a better paid job comes along.
Because it’s so tied up in our core values, you can’t just ask someone to describe team or organizational culture. People are rarely honest about themselves when it reflects poorly on them, even when their answers are anonymous.
Creating a cultural snapshot
Using a cultural profiling tool, such as Worldprism, is useless for the branding team or for marketing publications; but it gives your people an objective, unjudgmental way to tell you how they approach their work interactions, processes, and challenges. It will give you a real snapshot of how your people view relationships with their colleagues, what their attitude to hierarchy is, how they approach creative tasks and how they manage their time.
Just as importantly you can look at the range of difference – and from two perspectives.
- Do you have enough diversity of thinking when it comes to problem solving? Are you missing significant perspectives when you make decisions?
- Is there a cohesive approach to leadership and communication.
2. Analyzing Interactions and Impact
The leadership team of each division, with the support of an incredibly engaged HR Business Partner team, examined how these invisible cultures interacted, identifying differences as headwinds that blocked and tailwinds which enabled. They focused on disruptive cultural gaps rather than attempting to fix everything.
Why change fails
In a 2022 report, Gartner stated that many change programs fail, not because leadership teams failed to address cultural gaps, but because they tried to fix all of them, rather than focusing on disruptive cultural gaps.
For example, our client focused on addressing a significant difference in the expectation of leadership. A large part of the newly merged company was based on a command-and-control hierarchy, where a few technical leaders micromanaged a large workforce who were expected to execute, not respond. Part of the change program was to bring in modern leadership that empowered workers and encouraged them to experiment – a program that had worked very well for one of the pre-merger business units.
Be patient with the initial chaos
When they initially mixed the two units together, there was chaos. Half the workforce sat waiting for instructions, the other half spent their time either in grievances or disciplinary processes for exceeding what their more traditional managers considered appropriate.
Identifying that cultural difference meant they could step in quickly and effectively, rather than wasting time and effort, spreading themselves very thin dealing with every cultural gap found. This one was a significant one that was causing problems, and they addressed it quickly and decisively.
The power of difference
They also saw in the same team that different approaches to resolving problems meant that they were developing more effective and innovative solutions. It was taking a bit more time, but the results were much better and more sustainable. It wasn’t without a little conflict, but once the team learned to communicate respectfully and disagree constructively, it became a model for other parts of the business.
When you change culture, it’s often tempting to reject what was there already. You want a fresh start, so you think everything needs to change. This is a risky approach. Not only do you risk alienating more people and making acceptance of change more difficult, but you also remove those parts of the old culture that added value.
When you change culture, many people will find that they are no longer aligned. They can find incentive to change when they see that the bits that worked are not too different and that the new bits are an improvement. In a merger, there will always be people who start each sentence, ‘But in the old company we did it differently…’ And they’re important people because they have loyalty and were engaged. If you can convince them to transfer their loyalty and engagement to the merged entity, then you have retained their value and strengthened the emergent culture.
Nudges and influence
Our client ran workshops with a huge number of people that nudged rather than pushed, influenced rather than forced the workforce towards the desired culture. And because each person saw bits that they recognized, remembered that they had participated in the culture measurement activity, and could understand the ‘why’ of the change, by and large, they were more engaged in the process – and the new culture seems to be sticking.
These workshops were successful because the design team and the change team knew what culture they already had, had a clear and practical concept of the culture they wanted to get to, and were able to link the two. Using the data from the cultural profiling tool meant that the whole concept of organizational culture was based on practical behaviors and outcomes that will influence the business outcomes.
3. Leveraging Outliers for Broader Perspectives
The third action was one that many organizations overlook. They actively encouraged cultural outliers to add value by providing diverse perspectives. Recognizing that non-conformity can drive innovation, they allowed space for counter-cultural expression, boosting organizational agility and creativity.
The first two stages correspond to Ducker’s ‘breakfast’ element of culture definition. And most organizations stop there. They accept that not everyone is aligned and build in attrition to their change program. Often this is accompanied by the narrative that this is the culture – take it or leave it.
Enjoy a working lunch!
But if breakfast is the most important meal of the day, lunch is often the most enjoyable. Non-conformity to the dominant culture is not the bugbear it might seem to our visible culture brand consultant. Say it quietly, but rebellion is good for business.
Growth is a form of change – it’s change in the direction that you want to go. It’s a positive and without it, most C-Suites would have extremely difficult conversations with their boards and shareholders.
But change only comes through discomfort. Another analogy: When you’re sitting in a comfortable chair in a comfortable position, you’re unlikely to move around. You’ll fidget less and you will make every effort to retain that comfort as long as possible. We naturally look for the status quo and comfort – and the status quo is the enemy of growth.
Your customers’ worldview
The whole world is not aligned to your values and does not fully buy-in to your culture. And that means that your potential customers, partners, and stakeholders may have a different worldview. If you have pruned out all the dissent and cultural dissenters, who’s left to speak for the externals who aren’t part of the in-group culture? Who can come up with creative solutions that meet the needs of all your potential markets?
In a merger, we need to give an outlet to those who are different, whose approach to work culture is not quite aligned. This is a sensitive and nuanced challenge. Clearly, someone actively working against your culture can be a negative influence and if their voice is too prominent or too challenging it can become destructive.
But if you can harness it and give it a creative outlet, your whole organization will benefit. Someone who can challenge the organizational comfort zone and push the limits of what’s possible and acceptable. This is true inclusion – giving voice to the different and channeling it into a value-add.
Counter-cultural expression – key to innovation
And just as a light refreshing lunch can boost your stamina for the rest of the day, finding a place for counter-cultural expression will boost the innovation and creativity of the organization. It will become more agile, able to react dynamically to the world around – and maybe even get ahead of the curve.
The client I’m working with isn’t there yet. They are still on their journey. But the path they have chosen shows that it’s worth investing in getting culture right.
They have huge appetites to revolutionize their industry, and breakfast is the best place to start.
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