Strategy and culture are key tools for leaders to keep their organizations effective and viable. Strategy sets clear goals for the company and helps everyone focus on these goals. It involves making plans and choices to get people working together and often includes rewards for success and penalties for failure. Strategy also adapts to changes in the business world to ensure ongoing growth and stability. Leaders often understand strategy well, but culture is trickier to manage. Culture is about the unwritten ways people behave, think, and interact in a company. It's the hidden force that shapes how things are done. 

Culture is like the unspoken rules of an organization. It affects how people act and think in many ways. These norms dictate what’s encouraged or discouraged in the group. When a company's culture aligns with personal values and needs, it can create a lot of energy and commitment to a common goal, helping the organization succeed. 

Culture can change on its own to meet new challenges and opportunities. Unlike strategy, which is often decided by top executives, culture combines the vision of these leaders with the real-world experiences of employees at all levels. 

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“Executives are often confounded by culture because much of it is anchored in unspoken behaviours, mindsets, and social patterns. Many leaders either let it go unmanaged or relegate it to HR, where it becomes a secondary concern for the business. This is a mistake, because properly managed, culture can help them achieve change and build organizations that will thrive in even the most trying times.” (Groysberg et al., 2020) 

There are two central concepts which apply regardless of organization type, size, industry of geography: people interactions and response to change. 

People interactions 

Organizations differ in the level of freedom provided to the employees on organizational level towards their interactions and coordination from highly independent to highly interdependent. Cultures that lean towards the first option place more emphasis on autonomy, individual action and competition. Those that lean towards the second group emphasize integration, relationship management and coordination of group efforts. People in these cultures tend to cooperate and view success through the lens of the group. 

Response to change 

Regarding their response to change, cultures vary.  

Some prioritize stability, valuing consistency, predictability, and maintaining things as they are. In such cultures, there's a strong emphasis on rules, hierarchical structures, and efficiency.  

On the other hand, cultures that value flexibility focus on innovation, openness to new ideas, diversity, and long-term thinking. 

From insights of different scientists about how people interact and respond to change, eight distinct cultural styleshave been identified. These styles apply to both organizations and individual leaders. This framework has been studied and refined over the past twenty years. 

Source: Groysberg, B., Lee, J., Jesse, P., & Cheng, J. Y.-J. (2020). The Leader’s Guide to Corporate Culture. In HBR’s 10 Must Reads on Building a Great Culture (pp. 7–29). Harvard Business Review Press. 

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