Culture Eats Strategy

The mandate for change is constant. Markets are being reshaped by digital forces, upstart competitors are attacking with new models, and consumer behaviours evolve at dizzying speeds. In response, most large organisations are in a perpetual state of transformation – rethinking strategies, redesigning operations, implementing new technologies. Yet despite this relentless churn and billions invested in change efforts, the truth is that many transformation initiatives fall painfully short of their goals.

Study after study has quantified this high level of change effort failure rates:

• Almost thirty years ago, John Kotter estimated that 70% of transformation and change management initiatives were simply wasted effort.
• A more recent study by Harvard Business Review found a 78% failure rate in transformation efforts.
• According to a global Bain & Company survey, only 38% of companies achieved their target impact case for cost transformations, and just 12% for growth initiatives.

The examples are painfully visible across industries – iconic companies disrupted into oblivion, behemoth incumbents brought down by lean upstarts, transformation efforts that haemorrhaged billions but returned to square one. Consider some high-profile debacles:

A high-profile example is Ford Motor Company’s efforts under former CEO Mark Fields to transform into a “mobility company” beyond just manufacturing cars. Despite billions invested in initiatives like autonomous vehicles and ride-sharing, the 114-year-old automaker’s ingrained culture focused on legacy models impeded the pivots, ultimately leading to Fields’ ouster.

This sobering track record exposes the challenge – even as companies pour staggering resources into remaking themselves for the future, their transformational change efforts routinely fail to take hold in sustainable ways. So, if wholesale strategic overhauls and operating redesigns are clearly not enough, what’s causing this seemingly intractable implementation gap? The answer lies in an often-overlooked factor that determines whether ambitious change efforts will stick or fade away: organisational culture.

To understand why organisational culture is so pivotal to the success or failure of change efforts, we must first grasp what organisational culture truly is at its core. Too often, culture is diminished as the “squishy” side of business – ping pong tables, funky office art, and signs on the wall displaying corporate value statements. An organisation’s culture is its fundamental operating system that codes for how people behave, make decisions, prioritise, and collectively work together.

An organisation’s culture comprises the accumulated shared beliefs, mindsets, rituals, and unwritten rules that have been institutionalised over time. It’s the underlying “software” that shapes employees’ behaviours and ways of working more powerfully than any formal policy, process, or directive. Like the body’s autopilot routines hardwired into the subconscious, organisational culture encodes the instinctive habits, gut responses, and default behaviours that persist even amid turbulent change.

Consider for a moment some of the core elements this cultural operating system governs:

• Mindsets and assumptions: The ingrained mental models about how to define/solve problems, where to focus energy, what good looks like.
• Decision-making conventions: The criteria and unspoken deal-breakers used to analyse issues and commit to choices.
• Collaboration patterns: The informal networks, influence flows, and ways of engaging that grease how work gets done.
• Motivation drivers: The incentives, status cues, and shared definitions of success that energise or inhibit people.
• Knowledge sharing: The accepted mediums and norms for communicating insights and institutional memory.
• Risk tolerance: The unwritten boundaries around how much risk is “acceptable” to take on or escalate.

While much harder to see than codified processes or reporting lines, these are the tacit marching orders that shape organisational behaviour at a subconscious level. Strategies and initiatives that conflict with this incumbent culture face an uphill battle. Like trying to re-wire someone’s neural pathways, real change can’t take hold unless it reprograms the underlying organisational operating system at this deeper level. Underestimating culture’s powerful gravitational pull is what dooms so many change efforts that look impressive on paper.

When top-down transformation efforts struggle to gain traction, leaders often double down on communication and “buy-in” campaigns to try overcoming cultural resistance. Town halls are held, glossy vision booklets are distributed, and slide decks are paraded through the organisation issuing calls to embrace the new ways of working.
However, this fixation on buy-in rests on a fundamental myth – the belief that if leaders communicate the rational case for change loudly and clearly enough, the troops will get on board. This approach drastically oversimplifies how to reset entrenched cultural patterns.
Organisational culture runs far deeper than intellectual agreement to a set of ideas. It’s the accumulation of shared experiences over years that have hardwired employees’ assumptions about how to behave and what’s valued. These aren’t malleable mindsets that can simply be reprogrammed through slick communications reframing the “Why?” Leaders hoping to reshape culture this way are fighting against physiology – the hardwired neural pathways and conditioned muscle memories guiding people’s instinctive actions.
Too often, organisations mistake polite silence or brief bursts of enthusiasm for true cultural buy-in. In these cases, the appearance of progress merely masks surface-level compliance – people going through the motions of adopting new processes, rather than fundamentally updating their mindsets and behaviours. This compliance swiftly erodes as the shiny communications wear off and the immune system rejects real behavioural change.
For cultural reinvention to stick, mere buy-in from a slide deck is woefully insufficient. Nothing short of experiential rewiring – remaking peoples’ shared experiences to forge new habits – can reboot organisational culture. This demands far more immersive, expansive, and systemic approaches than charismatic speeches or another town hall road show advocating for buy-in. Words alone don’t constitute belief. Actions must be lived before culture transforms.

With a deep understanding of the existing cultural codes in hand, the next phase involves priming the organisational environment to make new behaviours stick. Often, transformation efforts try directly implanting new processes and ways of working into hostile cultural soil, where those seeds inevitably get rejected.
Instead, leaders must first focus on tilling and enriching the cultural soil – reshaping the surrounding conditions and relational climate so new habits have fertile ground to take root and grow. This involves creating transitional areas where employees can safely practice new norms in parallel with established approaches.
Some key environmental redesign efforts include:

• Installing guide layers: Embedding coaches, mentors, and collaborative modelling roles to demonstrate new mindsets and facilitative conventions in real workflow.
• Injecting perception prompts: Inserting new rituals, totems, and social experience nudges into daily work rhythms to disrupt entrenched mindsets and make new priorities salient.
• Shuffling interaction patterns: Redesigning collaboration forums, meeting configurations, work mapping systems to scramble existing tribal boundaries.
• Shifting artifact systems: Updating seemingly minor environmental cues like office/room layouts, language/terminology, work artifact templates, etc to spark cognitive re-association.
• Creating cultural sandboxes: Designating sheltered zones where cross-functional teams can experiment with new behaviours without constraints. This suspends “immune system” rejection responses.

The key is making the transition feel like more of a gradual adaptive climb than a shocking cliff jump. These interventions lower threat responses while building audience comfort with smaller evolutionary shifts before attempting larger transformational leaps. Just as in a thriving garden, cultivation must prepare the soil before the new seeds can thrive.

As new cultural mindsets and behaviours take root from the bottom-up, actively cultivated through techniques like sandboxes and catalyst networks, the final phase involves hardwiring these new norms, so they become institutionalised and self-sustaining. Without this codification, novel practices risk gradually eroding once the focused transformation program subsides.

The goal is transitioning experimental cultural pockets into new organisational standards and default operating procedures. This bakes the evolved behaviours into concrete artifacts, systems, and environmental cues that will continuously reinforce and reproduce the desired culture automatically.

Some key hardwiring elements include:

• Rewriting role charters: Updating formal job descriptions, responsibilities, and success metrics to enshrine new responsibilities and behavioural expectations.
• Redesigning talent systems: Revamping hiring profiles, performance management, promotion criteria, and compensation incentives aligned to the target cultural attributes.
• Modernising policies and governance: Reframing approvals, decision rights, escalation processes and risk management frameworks to reflect new shared mindsets.
• Reimagining artifacts and workspaces: Codifying new language, templates, collaboration tools and physical workspace configurations as embodiments of the desired culture.
• Refreshing rituals and traditions: Instituting new ceremonies, rhythms, rites of passage and cultural shaping experiences for employees to viscerally internalise the cultural pillars.

The key is ensuring the novel ways of working that took root organically become the automatic corporate infrastructure – not just hollow value statements on posters. Creating constant experience loops that vividly model and rewire habits is crucial for embedding a self-tuning, self-reinforcing culture.

Just as tech companies push constant software updates, organisations must continuously refresh and propagate new cultural “releases” until they achieve stable, homeostatic equilibrium as the new normal.