Culture Beats Strategy

Everyone talks about strategy, but there is something more important than strategy: culture, and right after that, structure.

Strategy should tell us how we want to achieve something. It is a plan we want to follow. It should take into account our strengths and weaknesses, our environment, and how that environment may respond to our actions.

But what if strategy is not the most important factor?

Culture exists everywhere. It doesn’t matter whether we talk about organizations, teams, or individuals. A simple way to define culture is this: culture is what you tolerate and what you do not tolerate.

Let me give a simple example.

An organization sets a goal: it wants to be innovative. The strategy says that each team should deliver at least one innovation per month. So far, it sounds reasonable.

But what if the culture does not support that strategy?

Imagine that someone tries a new approach and it fails. The result is a disaster and that person faces negative consequences. Do you think that culture will support innovation?

The next piece of the puzzle is structure. I don’t mean hierarchy. I mean the practical rules of work: what people actually do and what they don’t do.

Going back to the example above: do employees have time to experiment? For example, four hours every Friday dedicated to experimentation. If they don’t, do you really think the innovation strategy will succeed?

Structure defines what people do, while culture defines what is tolerated, and together they shape how organizations, teams, and individuals actually perform. If you want to change something — yourself, a team, or an organization — the most impactful place to start is culture. By looking closely at what you tolerate and what you don’t, you will quickly see where your strategy is likely to fail.

So maybe the most useful question to start with is simple:

What do you tolerate?