Drucker and Fields
It’s my understanding that Management Guru Peter Drucker coined the phrase “Culture eats strategy for breakfast.” I also understand that Mark Fields, CEO of Ford, made it popular. All of which is fine with me. What I know from experience is Drucker’s statement is absolutely true. And I will be so bold as to add that a CEO has only one main function — to actively manage the corporate culture. It’s all about providing “context” for how our employees will react under calm or stressful circumstances.
As I’ve mentioned elsewhere on this blog, culture of an
organization can be understood as simply — “the way things get done around here.” That’s it really. When we’re faced with a hard choice between competing positive values, how does the decision finally get made? Are the values, and more importantly the CORE values, clearly understood? By everyone? Does the leadership team live those values?
All of this is important because it provides the context for how our employees react. They react in context. The core values determine how things get decided.
To borrow from Mike Myatt, “Values should underpin Vision which dictates Mission, which determines Strategy . . . ” It all starts with Values. Values not only underpin the Vision, they determine how things get done. In other words, values determine the culture AND therefore the context in which employees make decisions and react to the everyday challenges of the business.
In order to have a high functioning organization (or division, group, team, etc.), everyone will need to be autonomous, have continuing mastery and a clear vision of where the organization is going. If leadership is to have confidence that the correct decisions will be made, then they must have confidence that those making the decisions share the values of the organization.
Employees watch leadership to see what they do. Leadership’s actions speak louder than their words. So if they do not hire to values, and/or do not hold themselves and others accountable for living up to the values, then employees will make decisions based on their own values. Which may or may not match the organizational values and so may not achieve stated strategy and goals.
Often I have the pleasure of speaking with start-up company founders. I explain all this “value stuff” to them and emphasize that if they want to have a life, they are going to have to allow others to make decisions. To give control away, they must have confidence that core values are shared with the employee/partner. Further I explain that if they haven’t done the hard work of clarifying their own core values, then they can’t expect to hire people that share those values. Which means they will keep decision making to themselves and become a micromanaging bottleneck!
Founders will often take the easy way out and hire to technical competency rather than to values. We all are likely to be guilty of such hiring practices. We wind up with an accidental culture with ill defined values, and a context of chaos.
The best time to set a culture is at the founding of the organization. However, statistically, we will not likely join a company at the start or be the founder of a new concern. So, if we’re joining an established organization, our job is to interview them to see if they share our values. If they do not, we should, if at all possible, move on; otherwise we will be unhappy, disengaged employees.
From all that we know about organizations, it should not be hard to see that the key to success is clarity of values. These two authors show that employee engagement depends on the same three elements: “autonomy, mastery, purpose” — from Daniel Pink; and the matching concepts of “giving control away, technical competency, clarity of vision” — from L. David Marquet. The importance of purpose (or vision) is emphasized by Simon Sinek — he calls it the organizational “Why.” And all of those characteristics are based on core values (or what I call fundamental organizing principles). Get the core values right and you get the culture and context right. Pay only lip service to values and you will get an accidental culture that will not propel your organization forward. You get Wells Fargo or Volkswagen or Turing Pharmaceuticals or Fox News or Uber or Mylan or WorldCom or Enron, or . . .
A founder or CEO (or any leader for that matter) has only one primary function — to actively manage the organizational culture. And that is: defining core values, living them and holding others accountable for embracing them.