Every organization has a business strategy. Far fewer have a cultural strategy—and that gap is often the reason well-intentioned initiatives fail to deliver results.
Within every company, there's an invisible system that shapes what people believe matters most. It influences priorities, the speed at which teams operate, which risks are deemed acceptable, and what ideas are implemented.
That system is culture. And until it’s treated with the same rigor as business strategy, organizations will continue to face the same execution challenges.
This guide explores why cultural strategy drives performance, and how to design one that supports your organization’s goals and capabilities.
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What Is Cultural Strategy in Business?
Culture isn’t about perks or polished value propositions. As Clayton Christensen, a former Harvard Business School professor and creator of the online course Disruptive Strategy, explains: "Culture tells people how to prioritize when no one is watching. It becomes the internal rulebook for what to do and what to ignore. That's what makes it so powerful."
That perspective runs throughout the course. In Disruptive Strategy—now led by HBS Professor Willy Shih—Edgar Schein, a featured expert and MIT emeritus professor, defines culture as "the shared assumptions that develop when a group solves problems together."
Those assumptions form over time. As teams work together and adapt, shared beliefs become so ingrained that people stop recognizing them as choices. They guide behavior in the background.
Disruptive Strategy illustrates this through Schein’s three-layer model:
Basic Assumptions (Deepest): Unconscious beliefs that reflect how the organization truly operates
Espoused Values (Middle): What the organization says it believes—often aspirational
Artifacts (Surface): Visible elements, such as dress code, office layout, and policies
These assumptions, as Shih clarifies in Disruptive Strategy, "stop feeling like choices and start to feel like common sense. Because everyone accepts them as normal, they often go unexamined even when they no longer serve the organization's goals."
Because they go unexamined, they can quietly work against the organization when conditions change—turning behaviors that once drove success into constraints.
Understanding where that logic originates requires examining the building blocks of organizational capability.
What Determines Your Organization's Capabilities?
1. Resources
Resources include people, technology, capital, and relationships. As Christensen explains in Disruptive Strategy, "Resources tend to be tangible. They're things that can be hired and fired, bought and sold, built and depreciated."
Because they're measurable, leaders often focus on them first—and for good reason. Resources matter.
NyproMold, a plastics manufacturer featured in Disruptive Strategy, demonstrates what a strong resource investment looks like. Founder Gordon Lankton built the company on a simple principle: give capable people real responsibility, set clear expectations, and trust them to deliver.
To pursue a new customer segment, NyproMold invested in advanced equipment, strong plant-level leadership, world-class engineers, and a globally recognized brand.
But resources alone don’t guarantee success. Having the right people and tools in place is necessary—not sufficient. What a company can actually accomplish depends on more than what it owns or who it employs.
2. Processes
Processes determine how resources are used. They include formal systems—like budgeting, hiring, and product development—and informal patterns, such as decision-making under pressure.
“Processes, by their very nature, are designed not to be flexible, but rather to do the same thing over and over again," Christensen notes in Disruptive Strategy.
That consistency enables reliability and scale. Processes define how resources are combined to produce outcomes—and therefore play a central role in determining what an organization can achieve.
For NyproMold, processes sustained performance through benchmarking reports, centralized innovation shared across plants, and regular CEO engagement to surface ideas from the front lines.
Yet the most consequential processes rarely appear in documentation. As Christensen observes in Disruptive Strategy, "Many of the processes in a company are hard to diagram because they're embedded in the way people interact, coordinate, and make decisions."
Over time, processes optimize for efficiency, but this can make it harder to adapt when new opportunities emerge.
3. Profit Formula
Profit formula shapes how decisions are prioritized.
As Christensen defines it in Disruptive Strategy, profit formula is “the criteria used in the organization to prioritize one option over another, guiding decisions, such as which proposal to fund, which customer to call on, or which product feature to develop first.”
At NyproMold, no one formally decreed which customers or projects mattered most. But over time, a clear pattern emerged: Larger accounts, high-volume orders, technically complex work, and smaller high-growth customers were consistently favored because they aligned with margin goals.
Smaller or less proven opportunities were quietly passed over, not out of negligence, but because the organization's internal logic pointed elsewhere.
That's the nature of the profit formula. It doesn't announce itself. It accumulates in decisions until it becomes the invisible standard against which everything is measured.
How to Implement Cultural Strategy in Your Business Model
Understanding your company culture is only the first step. The next move is embedding it in daily operations.
Start With the Right Question
Most cultural audits focus on engagement or values. What they often miss is what truly drives behavior: how people decide what to prioritize, where they direct their time, and which ideas get resources.
That logic doesn’t live in strategy documents. It shows up in what gets funded, who gets promoted, and which ideas never gain traction.
The question is simple: "What does your culture make easy, and what does it make hard?" Shih asks in Disruptive Strategy.
That shifts the focus from intention to behavior, which is where culture actually operates.
Build It From Day One
Culture takes shape through consistent signals, not declarations.
At Norse Atlantic Airways, a low-cost, long-haul airline featured in Disruptive Strategy, founder and CEO Bjørn Tore Larsen is direct about how this works in practice: “We get a flexible culture by instilling it in people's DNA from day one, and we make very clear to anybody who joins Norse that this is not a typical scheduled-carrier type of operation.”
That clarity isn’t accidental. Norse recruits for mindset as much as skill set, prioritizing people with what Larsen describes as an explorer’s mentality: a willingness to embrace change rather than default to established ways of working.
The mechanisms reinforce the message. Norse's monthly "All Thing"—an open forum where Larsen shares key metrics, surfaces what's working, and invites questions from across the organization—keeps those expectations alive as the company grows.
"There's a saying that repetition is the model of all learning," Larsen says in Disruptive Strategy. "We're constantly repeating the important stuff—where we are, where we want to go."
Culture doesn't hold because it's declared. It holds because it's woven into the rhythm of how the organization operates every day.
Make It Operational—Not Aspirational
Good intentions don't build culture. Consistent behavior does.
“Culture must never be misunderstood as just fun and enthusiasm,” says Kristin Berthelsen, Norse's chief of staff and culture, in Disruptive Strategy. Values and culture, she argues, are not soft considerations; they're central to building a business that actually delivers results.
The real standard isn't what an organization says it believes. It's what leaders do—who they hire, what they reward, and which behaviors they hold to account or quietly tolerate.
Berthelsen is blunt about the gap between the two, saying in Disruptive Strategy, “To shape and protect the company's culture, the most important thing is to walk the talk. There are so many organizations that are trying to define a good culture by having great posters on the wall. That's really just meaningless if you don't walk the talk."
That accountability has to extend to people who don't fit. When someone isn't living the culture the organization needs, the answer is clarity, not accommodation. Keeping the wrong people in place signals to everyone else that the stated values are negotiable.
Culture functions as a strategic asset only when it's enforced, not just expressed.
Know What to Protect—and What to Let Go
Not every element of culture should change. The challenge is knowing which is which.
Within Disruptive Strategy, Larsen faced this directly when he brought Charles Duncan in as president of Norse. Duncan’s outside perspective added value quickly—not by overturning the company’s foundation, but by exposing where complexity had accumulated.
“Charles was very good in highlighting complexities, and pointed out a number of fields where we had an overcomplex organization, an overcomplex way of doing things,” Larsen reflects in Disruptive Strategy. “In hindsight, it's easy to see that we've become a better company by his pointing out these matters.”
What made that reassessment possible was a cultural commitment Larsen describes as non-negotiable in Disruptive Strategy: "You have to be adaptable, and you have to be able to move fast when you see that you're on the wrong track, not to put pride into any decision. If a decision is wrong, then redo it very quickly, and communicate why you did it."
What Norse chose to preserve wasn’t any specific process—it was a mindset. "What I most want to preserve in the Norse culture is that nothing is holy," Larsen stresses in Disruptive Strategy. "We can change anything if it makes sense and is good for the business.”
As Shih frames it in Disruptive Strategy, the standard is an ongoing discipline: "Culture should not be inherited without question. It needs to be examined, understood, and adjusted over time."
A strong culture holds firm on its core while staying loose enough to move with the business.
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Culture Is the Strategy Beneath the Strategy
Culture is one of the most powerful, and overlooked, forces in an organization.
In Disruptive Strategy, Shih describes culture as "a kind of prioritization engine—it tells people what matters, how to behave, what to focus on, and what to stay away from. When culture aligns with strategy, it becomes a force multiplier.”
That's why the organizations that succeed treat cultural design as leadership work, not a communications exercise.
As Larsen concludes in Disruptive Strategy, "You have to put as much effort into thinking how to communicate and interact with your people as you do with other important strategic stuff.”
Culture isn't fixed—it's built through what leaders model, reward, and repeat. Aligning it with your business model isn't a final step. It's where performance begins.
Are you ready to develop a cultural strategy that drives real business outcomes? Explore Disruptive Strategy—one of our strategy and entrepreneurship and innovation courses—and download our free strategy formulation e-book to start building the cultural foundation your organization needs to execute.