Visualizing the relationship between strategy and culture

In my previous piece I wrote about how important it is for organizations to have both a clearly articulated strategy and a culture that guides and pulls them in the right direction, using Bonobos as an example of a business that has gotten this right. As some of the comments I received hinted at, there is much to discuss about the nuances of what characterizes a successful alignment of culture and strategy, and the implications of choosing a balance.

At a high level, we can agree that, as Hayles pointed out in a comment, “leadership sets direction and tone, then smart people plan and execute great work”. Continuing to think about these things, in this piece I offer some illustrations about what the relationship between culture and strategy, at the most basic level, might look like. These preliminary diagrams might move this conversation forward by visualizing where and how the two exist within an organization.

Epilogue: Visualizing Balance

1. The Venn

Thinking about the relationship between culture and strategy via a venerable old Venn representation (Figure 1) highlights the contact surface between the two, proposing innumerable feedback loops. For instance, a strategic decision to outsource a function to a more cost effective market without compensating for the distance with stricter quality control processes can send a strong signal to the rest of the organization about values and priorities, directly transforming culture by embedding these new sentiments into it. This illustrates a reflexive relationship between the two, where each element informs the other as it changes. At the intersection of the two circles representing culture and strategy shows not so much an overlap between areas of interest or concern as a feedback loop passing information between the two domains. The arrows represent the influence between elements; a loop communicates that every element acts as both cause and effect.

Figure 1. The Venn (click to embiggen)

The end goal here is not to reach a complete overlap, because strategy and culture both need their own protected space with dedicated resources for development and course correction. Rather, we should think about how to find a balance between the two where a healthy connective surface is formed for them through which they can communicate. Significant overlap might be good, however, assuming the two elements are well-aligned, as it would mean that there is a lot of opportunity for cross-pollination and interaction via a continuous, connective flow of information.

(If you’re interested in learning more about feedback loops, and the greater systems that they’re part of, you should read this presentation that I co-wrote with my friend Amy Rae)

But, imagining the relationship between culture and strategy as a Venn model fails to speak to the hierarchical structure of organizations, or the responsibility of executing on strategy.

2. The Intersected Rectangle

Revising this idea we can instead think of the relationship between strategy and culture by thinking about how the two are concentrated within the organizational body. The white line in Figure 2 serves to illustrate where layers of the organization are exposed to either culture or strategy. No matter where you make the cut, however, both are still present (any organization will have its own distinct culture whether good or bad, even if nobody actively thinks or cares about it, and most organizations will have some sort of strategy in place, whether good or bad).

Figure 2. Intersected Rectangle (click to embiggen)

Two examples help us explore this further. Zappos is characterized by an incredibly vibrant culture present across the entire organization. As a policy, Zappos will only hire people whose personal values match their corporate values to ensure that the entire team is “living the brand”. That culture is tightly integrated with a strategy that is devised by, and thus concentrated to, top management (even if the entire organization is charged to carry it out).

Google too keeps its employees close to its core strategy, chiefly via the “20 percent time” initiative. These side projects start out as a manifestation of Google’s culture. But projects that show potential are given more resources and might be transformed from a prototype or small-scale initiative into an actual product. Born from a culture informed by strategy, the most promising 20% projects with time grow to fit Google’s greater strategic approach. An interesting and crucial aspect of this initiative is how it fosters a culture of curiosity and innovation, further blurring the lines between corporate beliefs and guidelines, and the actions taken to fulfill the Google’s corporate mission (which is as directional as it is visionary: To organize the world’s information and make it universally accessible and useful).

3. The Projection

The most sophisticated of these three models, the Projection combines the first two in service of describing the relationship between strategy and culture while also illustrating the level of overlap and the ratio of both within the organizational body. It also speaks to where they connect to create a well of bi-directional feedback.

Figure 3. Projection (click to embiggen)

Using this model, a small overlap might indicate that the organization should think about how to grow the contact surface between strategy and culture to foster more organizational awareness about how well the two jive together, so that better alignment can be reached.

Moving forward

Rather than debating the respective virtues of either, and thereby setting ourselves up to explore the false question of whether strategy trumps culture or vice-versa (the answer is neither will win out alone), we should try to better understand how to intelligently connect the two so that they productively advance each other, and thereby the organization, in the right direction. Developing some basic thinking tools that help us reflect on and talk about where these two elements live and connect within organizations can be a small first step to building some initial understanding of how they operate not as separate agents but as an integrated system.

What do you think? Can you think of a better way to visually explain how these two can co-exist and influence each other, in order to help organizations understand how to reach better strategic and cultural alignment?