integrity

Culture vs. Strategy

© Can Stock Photo / Cebas

Long ago, we conceived the notion that a well-grounded enterprise had values as the foundation. Principles arise from values, strategy builds on principles, and tactics align with strategy. So ultimately, everything you do every day has your values at the bottom of it.

Our initial thought was to get a nice graphic of this structure so we could explain it to clients more clearly. But the only way to truly convey values is to live them, day by day and year by year, and let others draw their own conclusions. So we dropped the idea of talking about them.

We were reminded of the structure recently, when an airline made a public relations disaster by dragging a bloodied customer off an overbooked plane. The next morning, the value of the airline dropped by more than half a billion dollars in the stock market. In the aftermath Tom Peters, the dean of business gurus, attributed the problem to the CEO for having a defective culture.

This prompted us to look up ‘organizational culture,’ a concept developed by MIT professor Edgar Schein in the 1980’s. His academic work parallels our old notion about values, with some differences in terminology.

Schein is credited with a business classic: “Culture eats strategy for breakfast.” So when we think about the airline, we know the strategy is to increase the ‘load factor’ or utilization rate because fuller planes make more profit. But that strategy is not grounded on any deeper value than short-term profit.

The airline we prefer to fly on is known for trying to get their customers where they are going in the most pleasant and efficient manner possible. That is their culture. The staff smiles a lot, and deals honestly and tactfully when any issue arises. Paradoxically, it is the only major airline operating in the US today that has never booked a quarterly loss.

The difference between the two airlines perhaps illustrates that culture eats strategy for breakfast. This is a useful lesson for us in selecting companies in which to invest, and for you, in choosing where to do business for any product or service. Clients, if you would like to talk about this or any other topic, please email or call us.


The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

Investing involves risk, including possible loss of principal.

Kiln-Fired Personalities

© Can Stock Photo / kosmos111

We all know people who know what they are about. They have clarity about that for which they strive. They focus on the essentials, and are not easily distracted. They understand the bigger picture, and their place in it.

These folks demonstrate considerable strength, firm adherence to their principles, and they usually are of service or value to others. A surprising fact applies to each of them: they all started out as soft little babies.

We have been privileged to know people who fit this description, and to read the biographies of others. The same pattern exists in people in every walk of life. In learning their stories, we often find considerable adversity or seemingly insurmountable obstacles in their past.

We’re reminded of clay, and pottery. Clay is soft and malleable, fine particles that are quite porous. Pottery is durable, impermeable, fused into a single item—not a mix of soft particles.

More than ten thousand years ago, humans were creating pottery from clay on at least four continents. We learned a long time ago that heating a clay vessel in a hot enough kiln for a long enough time transforms it into pottery.

The heat of the kiln changes the properties of soft clay. Particles fuse together. The chemistry changes. What emerges from the kiln is fully formed, durable and useful.

Perhaps adversity is a kiln that produces change within us.

We would never suggest that problems or misery are good. One cannot know the depths of heartache or pain that another is forced to bear. The point is, much of what happens, happens. It is beyond our control.

We may be able to influence our own reaction, how we choose to spend our energy and our minutes in the face of adversity. Just as we cannot know what others must bear, we are not qualified to judge how others respond. But for each of us, with our own challenges, there may be some choice.

Please call or write if you would like perspective or help on your own situation or circumstances.