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Why Loyalty Eats Strategy for Breakfast

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The game-changer for a company is not the culture itself, but the loyalty it inspires in employees and customers.

Peter Drucker coined the phrase “Culture eats strategy for breakfast.” This comes as a warning herald to companies that may focus on strategic plans at the expense of culture. But what can culture do for a company? Interestingly, the game-changer for a company is not the culture itself, but the loyalty it can inspire in employees and customers:


People are loyal to culture, not strategy


Culture is how the company’s values are expressed in its operations. A killer strategy is good for business, but a killer culture connects your customers and employees to your company as they support what your organization stands for. You want people to be loyal to your company? Start by being loyal to people. A culture that centers around employees and customers’ needs will gain you people’s loyalty. Read about how Starbucks has exploited this principle.



Culture can get your company through tough times

Print Even the best strategy cannot prevent times of crisis. The way your company responds to crisis depends on employee loyalty, which is fostered by company culture. A strong culture helps employees handle crisis in a positive way, making your organization resilient. Will your people stand by you in a crisis or will they defect/withdraw? Ford had to transform its culture to survive the 2009 financial crisis. During the uncertainty that accompanied the crisis, Ford’s employees did not feel aligned with the organization – there was no sense of team. “To address that endemic problem, a profound change in mindset needs to occur, with the belief that we’re all in this together.” More about Ford’s “History-making revitalization”


Culture influences behavior better than strategy


A great strategy will not implement itself. You want employees to get on board with your strategy? Rely on culture to gain employees’ loyalty to your strategy! Culture can support attitude and behavioral expectations. Nordstrom leverages company culture to align operational and customer service strategies. The result is Nordstrom’s best-in-industry customer service. Nordstrom’s employee manual consists of the following sentence “Use good judgment in all situations.” By trusting the judgment of its employees, the company has empowered its employees to deliver customer service that goes above and beyond industry norms. At Nordstrom service is a culture not a department.




Culture creates competitive differentiation


Employee and customer loyalty has the added benefit of making your company stand out from the competition. The good news is that while competitors can copy your strategy, they can rarely copy your culture. Airlines have for long tried to copy SouthWest’s strategy by creating discount fleets, but they have failed at copying what Southwest calls its “biggest competitive strength” – its culture. “Southwest’s position is that the happiest worker creates the happiest customer, leading both to stick around with Southwest. Happier workers work harder and stay with the company.” More about SouthWest’s commitment to internal culture.



The importance of culture today

Company culture is becoming increasingly important as companies compete for talent and work to retain it. Gone are the times when success meant working 25 years at the same company. Millenials are in a quest for the workplace that fits their soul and they are not afraid to change companies every few years in their journey. Wanna make employee loyalty cool again? Design a company culture for and by all employees. The strongest company cultures support the company strategy and are developed with input and feedback from employees.

3 thoughts on “Why Loyalty Eats Strategy for Breakfast

  1. Great post, Nancy! From my previous experiences, I have seen how loyalty can make or break a company. We often talk about the loyalty of founders, but loyalty from employees is incredibly important. If you do not create a culture that makes employees feel like they are valued, it is tough to expect them to go above and beyond to help your company succeed. After all, employees’ monetary incentives will not be as pronounced as those of the founders.

    I like the examples you gave of companies that have used loyalty to successfully implement strategy. It is clear that loyalty makes employees buy into the strategy and help with its successful implementation. It also dictates the success of hiring efforts. Loyal employees speak highly of your company and in turn this helps you attract better talent.

  2. Great post Nancy, I think it’s very valuable that you brought up here the notion of “loyalty” and how fundamental that is to the culture of a startup, defining the relationships between the founders themselves, founders and the employees, the company and its customers, and ultimately impacting the chances of the startup’s success. We talk about strategy, the business model, cash burn and etc all the times, but rarely take the time to analyze how important loyalty is in creating and growing a business. So thanks for this!

  3. Great post Nancy! I have personally seen both sides of this happening. In my previous job, when the company was going through times, some people (who were quite good) quit. When I asked the people who stayed, loyalty was the most important reason. We thought of the company and our colleagues as family.

    I also think loyalty can go a bit too far. For example, in my previous experience, there have been instances when some people were just not doing their job right, especially in certain critical situations. When there is too much loyalty both ways, the underperforming colleague may be given too many chances and not let go. Loyalty can sometimes prevent people from making these tough decisions.

    People should understand that along with loyalty comes responsibility, accountability, meritocracy and other aspects of a company’s culture. It can then be a powerful combination indeed. Thanks for this!

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