1/ There's an old quote, often attributed to Peter Drucker, that goes 'culture eats strategy for breakfast'.
It sounds pithy and wise, but the origins have always been a mystery to me.
Well, it turns out the original context was about execution of strategy.
Conversation
2/ Quote Investigator has a good 2017 post about the origins. The basic idea is that whatever strategy a company can execute is constrained by existing organisational culture.
quoteinvestigator.com/2017/05/23/cul
2
1
13
3/ There's another way of looking at the quote, which is that in some industries, in some cases, a company with superior culture beats its competition.
Culture = an interlocking set of mechanisms, incentives, and org structures, unique to the competitor.
Replying to
4/ This second interpretation has always bothered me. It doesn't seem to make sense that culture can be a sustainable competitive advantage.
And yet, observe Danny Meyer's Union Square Hospitality Group (through the lens of Susan Salgado's original analysis of its org design).
1
3
5/ I wrote about Meyer's USHG a couple of months ago.
The basic idea is that USHG has an interlocking set of practices that guarantees high service outcomes for customers.
commoncog.com/pay-attention-
1
2
6/ If Meyer's competitive advantage is truly sustainable (and I believe this is) — then which of the 7 Powers is it?
This is worth asking, since the 7 Powers claims to be exhaustive.
Quote Tweet
I just published a 10400 word members-only summary of 7 Powers on Commonplace, probably my longest post ever. I've not seen very many summaries that do a good job of representing the nuances of Helmer's framework. So here's a thread on the highlights. commoncog.com/blog/7-powers-
Show this thread
1
2
7/ The question applies just as readily to Amazon, and TransDigm, and many other companies that seems able to produce a set of consistent behaviours amongst its employees, at scale.
A couple of weeks ago, I found my answer. Helmer says, in a podcast:
1
1
4
8/ This was slightly surprising to me, since you'd think that cultural advantages are a form of 'Process Power' (another one of the 7 Powers), not counter-positioning.
But it really is a different thing — cultural advantages are difficult to copy for different reasons.
1
9/ The Barrier in Process Power comes from time (you're not able to copy in < 10 years even if you knew what to do)
But the Barrier from cultural advantage (which again = interlocking set of incentives & systems) comes from ... "eww, reorg?"
Quote Tweet
Alright, let's talk about Process Power. I'm probably going to write a post titled 'People Don't Seem To Understand Process Power' soon, because people seem to take it to mean 'oh, processes that are difficult to copy'.
Which, yes, but how difficult?
twitter.com/ejames_c/statu
Show this thread
2
3
10/ "Eww, reorg" may come in many forms:
- Job security (it's too much work to fight internal politics to reorg)
- Ego (it feels icky to copy another org's internal culture wholesale)
- Lack of personal commitment from leadership to push a new culture throughout their org.
1
4
11/ I cover this idea in this week's Commoncog members-only blog post, which also goes into why the current shift towards 'Growth' (vs traditional marketing) is yet another example of this kind of competitive advantage.
1
2
12/ If you'd like more updates like this, I have a newsletter!
Or just follow along for threads on the ideas I cover at Commoncog.
A closing thought: Counter-positioned cultural advantages can hold for a fairly long time. Who knew?
3
Replying to
I wouldn’t assoc org struct under culture but what do I know right? 😆
But I can see it
Before ur tweet my 🧠:
1. Org struct dictates Culture
2. Culture eats strategy
Also see Conway law which I’m sure you’re familiar w/
PS: I subsume comm struct under org struct