The quote is typically attributed to management guru Peter Drucker but that’s been disputed a bit since it’s not found verbatim in any of his writing. No matter who said it, it’s good shorthand for the outsized impact of culture in an organization.

But back to the question at hand, “If culture eats strategy for breakfast, what does it eat for lunch and dinner?”

When I talk with a client about culture, I’m talking about the way we live in the organization. It’s the written and unwritten rules about how we interact with one another, customers, and vendors. It dictates our approach to work – is it joyous and purposeful or is it duty and drudgery? It’s taught by those who lead the organization, caught by watching their attitudes and actions, and curated by the attitudes and behaviors those leaders allow.

Here’s the net-net of Drucker’s quote – no matter how brilliant, visionary, insightful, and productivity-enhancing your strategy is, if you unleash it into a toxic culture, it will all be for nothing. The half-hearted execution of disengaged, apathetic employees will suck the brilliance out of the strategy.

So, the question is, “If culture does that to strategy, what else does it impact?” The short answer is “everything.” But, over the course of working with dozens of clients, I’ve seen two disciplines most acutely affected – people and operations.

People sounds like the “duh” answer since culture is a people discipline, but stick with me for a minute. We learned from Dan Pink’s excellent book Drive that, according to the social sciences, people want three things from work – Autonomy, Mastery, and Purpose. A culture that breeds micromanagement and actively opposes experimenting with new ways of achieving company objectives destroys autonomy. A culture that doesn’t promote and give opportunity for personal and professional growth destroys mastery. A culture that doesn’t help employees attach meaning to work, beyond drawing a salary, destroys purpose.

Employees watch closely who is promoted, is appointed to high profile projects, and receives public recognition. When it’s the people who get things done by abusing other employees, co-opting ideas from other employees without giving them credit, and sucking up to the boss, they file that away as behavior that is encouraged and rewarded in the organization. This is culture being “caught” even if it’s not the culture you want.

Eventually, good employees mired down in a bad culture leave the organization. Every departure of a good employee damages the culture further since there are fewer positive influences.

The other outsized impact I see is in operations. When disengaged employees execute, they do only the bare minimum. Even if standard operating procedures are in place, there’s never a thought given to improving those procedures or stepping back to view the output from the customer’s perspective to see if there could be improvements in quality, in speed of delivery, or in customer experience.

Unhealthy cultures typically make employees risk averse, so new approaches to procurement, streamlined transformation activities, swapping under-performing vendors for new vendors, or changes to logistics are never considered since they could result in failure. And in an unhealthy culture, failure always results in punishment so why take the risk.

Healing a toxic culture might seem like a daunting task, but it’s very doable. Here are the steps to follow –

• The buck stops here – as the leader, take personal responsibility for creating the repaired culture
• Codify the new culture – write out the attitudes and behaviors that will be acceptable in the new culture
• Model the new culture – live it out
• Talk about the new culture – in groups and individually
• “We used to …, but now we …” – every chance you get, contrast the new, desired behavior with old behavior
• Deal with bad actors – when someone violates the new cultural norms, coach them up
• Tell stories – build a catalog of illustrations of people living out the new culture and tell those stories over and over