I recently finished reading Paul Ingrassia’s Crash Course: The American Automobile Industry’s Road from Glory to Disaster and was struck by this passage:
In late January , [CEO] Bill Ford announced a corporate overhaul called “The Way Forward,” under which Ford would close factories and shed tens of thousands of employees, both salaried and hourly. The Way Forward was housed in a special “war room” (a clichéd corporate favorite) with a sign that read “Culture Eats Strategy for Breakfast”.
That was a warning of how difficult it would be for Ford to adapt its culture to the current market realities. As the son of a GM executive I don’t shed many tears for Ford but as a management consultant I have a lot of sympathy. In too many organizations Culture indeed makes a meal of Strategy every chance it gets.
Companies that have “hit the ceiling” and need to change in order to grow again can find that The Way Forward runs into How We Do Things Around Here. It’s a classic management problem that produces a common leadership complaint: “Why hasn’t our strategic plan worked?” Leadership teams need to understand that Strategy and Execution are different activities that require similar approaches for each to be successful.
Too often strategic planning is a blue-sky exercise that assumes a positive outcome for the company. The plan’s components are developed in pieces, with input solicited from various departments, functions or constituencies, and stitched together to make a roadmap of where the leadership wants an organization to go. It’s the creation of an ideal result by a small team for a larger audience.
Execution, on the other hand, is where Strategy meets Culture. Leadership turns the plan over to the whole organization, which tries it out, sees how it performs, and decides whether to embrace it. Occasionally the new strategy succeeds in changing the corporate culture and progress is made. More frequently, the plan clashes with the status quo, Culture ferociously asserts itself, and the leadership retreats. No wonder many strategic plans end up on the shelf and nothing seems to change.
In my experience, effective strategic planning should acknowledge a company’s culture without giving into it. Many times I have helped clients determine the optimum structure for their company, only for them to realize that certain people won’t be sitting around the conference table in the future. That moment of truth highlights how things will be different; that planning has consequences. Implementing the strategic plan requires managing those consequences, so it makes sense to modify the corporate culture instead of ignoring it. Execution is easier when you know that the buttons you plan to push are likely to work.
Bottom Line: Culture devours Strategy if Execution is an afterthought. Plan for the outcome you want by adapting the organization you have. Execute as if you depend on that organization because you do. Ultimately real, transformative change is possible only if The Way Forward acknowledges The Trouble We’ve Seen.
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