Connecting Culture and the Dominant Strategy
The flaw in the Deal and Kennedy model is that it does not connect culture to the strategies being implemented by the organization.
In my book, The Alpha Strategies, Understanding Strategy, Risk, and Values in Any Organization, I argue that there are eight strategies common to all organizations, big or small, and regardless of whether they are for-profits, not-for-profits, or public sector organizations.
One of the eight strategies will always be the dominant one leading the remaining seven. It is the dominant strategy that gives the organization its culture
. I define strategy as a choice of action. Culture is a product of the choice of action and acceptable behaviors reflected in the dominant strategy.
To demonstrate how the dominant strategy reflects culture, let's consider examples of organizations and their dominant strategy:
1. Nike and Coca-Cola are known as incredible marketing companies; their culture is all about marketing.
2. Banks are financial cultures
3. FedEx and Four Seasons Hotels are great service delivery companies
4. Intel and Google are driven by R&D/technology.
To complete the listing of the eight strategies as dominant strategy and setting the culture of the organization:
5. Insurers, pension funds, and government regulatory agencies are lead by the risk strategy. As a result, their culture is centered on risk management.
6. Walmart and McDonald's are growth companies. The culture is about growth. They never stop growing.
7. IBM is a business definition company focused on constantly adapting its competitive positioning in order to access high margin markets.
8. Finally, in most sole proprietor businesses, it is the "people" strategy or focus on the owner that is dominant. The culture is reflected in the owner.
The Deal & Kennedy Model focuses primarily on the people strategy and may be useful for understanding that one culture. However, the model provides little insight on culture as because it ignores the other seven strategies as possible dominant strategies setting distinct cultures.