Culture eats strategy for breakfast

The central role of leaders is to create organizations that fit human nature, emphasizing the significance of organizational culture. Noel Tichy's model categorizes organizational components as solid (operations), liquid (relationships), and gas (culture). Real-world examples highlight culture's impact on collaboration and innovation. Culture, often seen as immutable, deeply influences organizational success, challenging leaders to influence rather than change it. #leadership, #organizationalculture, #innovation, #collaboration, #NoelTichy, #businessstrategy, #organizationaldevelopment

Episode Transcript

(00:00):
Welcome to the Colig Experience episode. Today we're diving into bold insights, fearless

(00:09):
experimentation and groundbreaking leadership strategies that redefine success. In this
episode, we'll explore the critical role of leaders in shaping organizations that truly
fit human nature by focusing on the powerful impact of organizational culture. Let's start
We love to use the term organizations that fit humans. By this, we mean that the central

(00:35):
role of leaders today is to build such organizations, ones that are designed to accommodate human
nature. To talk about organizations that fit humans, organizations that people come to because
they want to come to them. We must engage with that enigmatic concept, organizational culture.

(00:55):
When we ask participants in our CEO or VP programs about organizational culture, we receive
answers like the DNA of the organization, the code that dictates its characteristics,
unwritten tradition, what people do because it's customary and accepted, passed down through
generations and no longer clearly connected to any written doctrine, values, the fundamental

(01:21):
beliefs of the organization, what the organization believes in, norms and practices, behavior that's
considered acceptable, meaning it's the norm. On one hand, these aren't clear cut answers,
but on the other hand, we all intuitively understand what we're talking about.
Noel Tichy, a researcher and author in management and leadership, divides the building blocks of an

(01:45):
organization into three types, which he distinguishes using the metaphor of states of matter.
Ice, solid state, the operational model, the rigid part of the organization, is its structure,
the foundations around which the different parts are built to make it what it is.

(02:06):
We're not just talking about the organizational structure, but everything that falls under the
category of operations, like role definitions, responsibilities, central processes and procedures.
Tichy says this is the organization in a solid state, it's the part of the organization that's
relatively easy to grasp. Whether this operational model is written down or just understood, it can

(02:32):
be explained relatively easily to someone from outside. Water, liquid state, relationships, dynamics,
water, unlike solids, is more elusive, difficult to hold in your hand for long.
Tichy uses it as a metaphor for interpersonal relationships and the movement of power within

(02:53):
the organization, which are only partially visible. We can describe relationships between people and
also dynamics within groups and teams, but they're much harder to understand and analyze. On the other
hand, we can definitely influence them. It might not always be easy, but it's certainly possible.

(03:14):
Influencing relationships can be done through skills some call soft, after all, water,
but they can also be influenced through role definitions, organizational structures, processes
and the like. We recently worked with the software development company that was struggling with
collaboration between their engineering and product teams. The company had all the right

(03:39):
processes in place, daily stand-ups, sprint planning, retrospectives, but tensions persisted.
We discovered that the issue wasn't procedural, but cultural. Engineers felt their technical
expertise was being undervalued in favor of market-driven decisions. By focusing on relationship

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building activities and creating forums where technical considerations were given equal weight
in discussions, we helped transform the dynamics. Within three months, cross-functional initiatives
increased by 40% and the time to resolve conflicts decreased dramatically.
Vapor Gas State Organizational Culture

(04:22):
Vapor, unlike water, is not only hard to hold, but also difficult to see.
In the air around us, there is moisture, water vapor. It's there and even plays an important
role in keeping our bodies functioning, but we can't always see it and we certainly can't hold it.
This metaphor is used by Tishi to describe organizational culture. Organizational culture

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is something we all know is there and even important, but it's not really clear exactly
what this thing is. And even more importantly, it's much less clear to us how we can influence it,
not to mention change it. Tiki's model could be misleading and create the illusion that the
distinction between culture relationships and the operational model is sharp and that there's a

(05:15):
clear boundary that distinguishes where one part ends and another begins. The model might also confuse
us and make us think that there's a certain hierarchy between the states of matter. That
air is based on water, which sits above ice. In other words, that the operational model is the

(05:35):
foundation upon which relationships and organizational culture rest. Reality is, as always, more complex
and complicated than any model. In reality, when we try to analyze and understand an organization,
we must use language that includes operational concepts, elements of relationships and dynamics,

(05:57):
and components of organizational culture. The thing is, we're creatures that think in patterns.
For every problem, we have a suitable drawer from which we can pull out an excellent recipe
with proven experience. We have drawers for operational problems, drawers for interpersonal
relationship issues, and we have a drawer labeled organizational culture. In a biotech company,

(06:22):
we consulted for, leadership was puzzled by their inability to foster innovation,
despite heavy investment in R&D resources. They had world-class scientists, state-of-the-art
facilities, and generous research budgets, all the operational elements for success.
What they lacked was a culture that truly valued risk-taking.

(06:45):
Scientists were implicitly penalized for failed experiments through subtle social cues and reduced
visibility. Together, we worked on creating celebration of failure forms where unsuccessful,
but bold research approaches were highlighted as learning opportunities. The company's patent
applications increased by 35% in the following year, not because of any operational changes,

(07:10):
but because the cultural vapor had shifted to genuinely support scientific exploration.
Let's examine a real-life example. An organization that wants to transition to using a certain
reporting tool, a change that is seemingly technical in nature, assumes that all that
needs to be done for the process is clear definitions, training, KPIs, and other operational

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elements that will advance the implementation of the new tool in the organization. But almost
always, introducing a new tool involves changing power relationships in the organization,
affecting relationships between individuals and departments, shaping narratives around
what's important and what's valued, and other soft elements. It would be very naive to think

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that such an organizational change could be led using only the operational toolbox found in the
first drawer. And this is also why such changes often don't succeed, or they succeed only after
investing a great deal of organizational and managerial energy. Therefore, leaders who by
definition are supposed to lead changes cannot ignore this thing called organizational culture.

(08:25):
And perhaps this is the background to Peter Drucker's immortal statement that culture
eats strategy for breakfast. No matter which direction the organization's strategy wants to
move, in reality what will move it is the culture. And consequently, the success and prosperity of
the organization depend very much on its organizational culture. The great power attributed

(08:50):
to organizational culture, as Drucker brilliantly formulated, is so accepted by the managerial
community that many see it as a kind of fate, a force majeure, a fact of life that cannot be
changed. And the truth is that this position is not at all unfounded. Organizational culture
is indeed very difficult to change, which is why we prefer to talk in terms of influencing

(09:16):
organizational culture rather than changing it. To summarize thus far, organizational culture is
important to managerial and organizational discourse for two reasons. Because it affects the
organization's ability to thrive and flourish. Because we stand before it in awe, usually without

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having the beginning of an idea of what to do. That wraps up today's podcast where we explored
the crucial role of leaders in shaping organizations that align with human nature, highlighting
Noel Titches model of solid, liquid and gas states and the power of culture over strategy.

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