Oswald Letter

Good company culture is essential to a business’ success

Business People Meeting Corporate Digital Device Connection Concby Dan Oswald

“Culture eats strategy for breakfast.” It’s a statement attributed to Peter Drucker, the famed management guru, and a concept that many business leaders ascribe to. I like to quote it, and I want to believe it, but is it true?

There are great companies that have a great culture. I like to use Southwest Airlines as an example. I’m a frequent customer of the airline and repeatedly see what a strong culture can do for an organization. According to its website, “The mission of Southwest Airlines is dedication to the highest quality of Customer Service delivered with a sense of warmth, friendliness, individual pride, and Company Spirit.” The consistency at which the airline delivers on this mission is remarkable and speaks to the leadership of the company.

Southwest makes you believe that culture does indeed eat strategy for breakfast. But if you look closer, the airline also has a clearly defined strategy on which it executes extremely well. It’s a low-fare airline that focuses on efficient operations. It routinely turns its planes around on the ground quicker than any other airline, keeping them in the air where they’re making money. Southwest also uses only one type of plane, the Boeing 737, which keeps maintenance and operating costs low so it can pass the savings on to customers. It’s a strategy that clearly works.

So is it the culture or the strategy that makes Southwest so successful? I think it’s both. So my question remains, does culture really eat strategy for breakfast?

We’ve seen some questionable, broken cultures that have been incredibly successful. Uber is a recent example—many questions have been raised about the company’s culture, but nobody questions its success. According to a New York Times article earlier this year, investors value the company at $70 billion. Yet there have been many reports and lawsuits claiming a history of discrimination and sexual harassment at Uber and that the culture was encouraged by top management. If culture eats strategy for breakfast, to what do we attribute Uber’s meteoric rise?

The culture question is a difficult one. It’s not easy to create a strong, cohesive culture that drives a company forward. It’s hard to bring dozens, if not hundreds or thousands, of people together and get them to coexist and work together collaboratively toward a common goal.

I just spent a week’s vacation with my wife’s family. We had three generations—mostly adults—together under one roof. Fifteen people, all of them related by blood or marriage, living and working together for one week. It wasn’t always easy. You could see clashes of personality, questions about division of responsibilities, and conflict when it came to decision making.

If that occurs with family members who have to live together only for a week, you can understand why it’s so difficult to bring together a group of strangers who spend half their waking hours together five days a week. You see the same personality conflicts, the same questions about responsibilities, and the same conflicts about decisions. Somehow it all needs to be reconciled into a single culture capable of eating strategy for breakfast!

Drucker also had this to say about managing people: “Management is about human beings. Its task is to make people capable of joint performance, to make their strengths effective and their weaknesses irrelevant. That is what organization is all about, and it is the reason that management is the critical, determining factor.”

Maybe it’s a given that a successful business must have a product or service that consumers want or need. Maybe it’s a given that a business must have a strategy that it can execute in order to succeed. But it seems to me that to achieve long-term success, it takes more than a great product or service. It takes more than a good strategy. For any company to achieve long-term success, it must have a great culture because it takes people—human beings who are capable of working together and leveraging the strengths of each other—to truly be successful.

And for that to happen, you need to get a group of people who can put selfish motives aside for the greater good of the team. A group of people who buy into the mission and vision of the company. A group of people who want to be a part of something greater than themselves. I subscribe to the “culture eats strategy for breakfast” concept because I believe people truly make the difference in any successful company.