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“Culture eats strategy for breakfast. Purpose drives its appetite.”

Leadership thinkers, Fortune 500 CEOs and management gurus often quote the maxim—clearly recognizing that no matter the category, the success of any company rests squarely on the performance of its people. And that performance is driven by culture. Culture trumps strategy, innovation, technology and operational excellence.

“Culture” can be sort of hard to define, but like the famous definition of obscenity averred in 1964 by Supreme Court Justice Potter Stewart, we generally “know it when we see it.” Culture is the shared set of beliefs, values, practices, and behaviors that characterize an organization. It’s the “how” of the organization; it’s the “hive mind;” it’s the shared ideology.

Lou Gerstner, former CEO of IBM, wrote:  “I came to see, in my time at IBM, that culture isn’t just one aspect of the game, it is the game. In the end, an organization is nothing more than the collective capacity of its people to create value.”

David Cummings, co-founder of Pardot, said, “Corporate culture is the only sustainable competitive advantage that is completely within the control of the entrepreneur.”

 There are a good number of reasons why culture is so important to driving organizational performance.

Competitors can copy strategy but not culture. There are dozens of low-fare airlines now, but still only one Southwest. In fact, if you’ve checked airfares lately, you’ll likely find that Southwest is rarely the lowest cost fare, often outpriced by even one or more of the legacy carriers. But we all know that price isn’t everything, and Southwest continues to hold a loyal following; even despite the black eye the airline gave itself in late 2022 when its operations management technology melted down and stranded thousands. A strong culture makes a company more resilient and adaptable in the face of of a crisis such as that.

Culture is persistent; strategy is not. A new CEO, a turnaround, or market dynamics can all drive strategic shifts, but the culture will either defeat or enable that shift. Any given company will develop and execute numerous strategic initiatives over its lifetime. Those strategies alone won’t drive successful execution; the organizational culture will. 

Strategy is also forged in private, while culture is formed in the open. Strategy formation is the domain of the executive team, while cultural formation occurs at every level of the organization. The open and transparent nature of cultural development means that essentially everyone in the organization owns it. It’s not a top-down function, and in today’s increasingly information-democratized society, that’s a powerful trait. Culture is everywhere and resilient, adaptive organizations have cultures with the same traits.

Strategy engenders compliance, while culture drives commitment. Achieving a mission at scale means winning hearts and minds; it requires the passion and perseverance of every member of the team. Starting with the hearts means you’ll earn the minds; you do that with a great culture. 

People are loyal to cultures; strategies, not so much. A week into its month-long new employee training, Zappos offers new hires $2,000 to quit; it quickly weeds out those whose values don’t align with the culture. Late founder Tony Hseih considered it the best investment they made in the business. 

Culture transcends leadership changes, business cycles and management fads. Few corporate strategies survive the arrival of a new CEO; after all, what were they brought in for? But cultures are more like freighters underway at sea: huge momentum and very slow to turn. That’s why smart CEOs often begin their tenures with a “listening tour” of the organization to get a finger on the pulse of the culture.

If culture eats strategy, purpose drives its appetite. This is basic human nature: we all crave meaning in our lives and in our work; we need social engagement; we want to make an impact. 

When a compelling, galvanizing purpose is clear and present to every single employee—from the CEO to the front lines—culture thrives and drives. Southwest Airlines exists to “democratize the skies.” Apple exists to create elegant, bulletproof technology “for the rest of us.” Zappos exists to wow its customers and “deliver happiness.”

If a company selling shoes online can invest purpose and meaning in its work, any company can. The problem for many management teams is not so much recognizing the value and imperative of building a crystalline, compelling culture; it’s how to do it.

For more than two decades, our firm has pioneered the discipline of building brands that come alive inside and outside the company–that is, building brand culture. This is the “inside game” of building brand leadership, what we call “Living Your Brand.”

You don’t have to be Southwest Airlines or Zappos or Apple to develop, deploy and drive a Living Brand. You simply have to follow a proven roadmap that’s been demonstrated successfully by dozens of small and middle-market businesses. 

To learn more about how to build a purpose-driven, brand-driven culture, be sure to review associated blog posts on our site like Branding is Leadership, Branding is an Inside Job, and Your Brand: Powered by Emotion. To access a fantastic self-assessment tool you can use right now to evaluate your own strength and clarity of culture, download this document.

Author Martin Thoma

Began his agency career as a copywriter before co-founding Thoma Thoma more than 30 years ago. Now Martin focuses on helping brands grow by discerning, defining and articulating their unique strengths.

More posts by Martin Thoma

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