Culture - Chapter 3 - Performance!

Summary

Manager Tools Podcast - Episode Summary

Episode Title: Culture - Chapter 3 - Performance!
Date: July 20, 2026
Hosts: Sarah & Mark

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Episode Overview

This episode of Manager Tools, “Culture - Chapter 3 - Performance,” dives deep into the core meaning of organizational culture, debunking myths perpetuated by so-called “culture experts” and focusing on what really counts: performance. The hosts, Sarah and Mark, challenge common assumptions about culture and clarify management icon Peter Drucker’s famous “culture eats strategy for breakfast” quote, emphasizing the crucial role of repeated behaviors and accountability over feelings or catchy values statements.

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Key Discussion Points & Insights

1. Common Misconceptions About Culture

Timestamps: [01:14] – [02:55]

• Culture is often defined inconsistently, much like engagement, making it challenging to operationalize.

• “Culture meetings” or workshops, often early-career highlights, are described as a waste of time:

  • They devolve into “vocabulary drills” debating semantics—words like “empower” vs. “enable”—that have little effect on real outcomes.
  • Quote:

    “Those sessions are a complete waste of time. They end up being a vocabulary drill, arguing about the differences between the words empower and enable, which doesn't really matter anyway.”
    — Mark, [02:23]

• The real essence of culture isn’t found in offsite retreats with “tea and scones” and lists of values, but in the actual work and behavior of people day-to-day.

2. What Peter Drucker Really Meant

Timestamps: [02:55] – [08:56]

• The oft-misquoted phrase “culture eats strategy for breakfast” is explained and reframed:

  • Drucker’s intent was that an organization that reliably does its work—performance, follow-through, accountability—will outperform one that is all-talk, regardless of how brilliant the strategy may sound.
  • Quote:

    "When Drucker said culture, what he meant was performance."
    — Mark, [05:55]

• Feelings are not the organization’s concern; performance (i.e., what actually gets done) is.

• Memorable analogy:

  “They're not just barking up the wrong tree, they're in the wrong forest entirely.”
  — Sarah, [05:08]

• If employees feel good but don’t deliver, the organization will still fail. Conversely, even a company with poor strategy can thrive over time if performance is high.

3. Defining Performance & Culture (Manager Tools Model)

Timestamps: [10:28] – [14:42]

• Manager Tools’ definition:

  “Culture is nothing more than the sum total of all the behaviors of all of the people in your organization. Culture is the way we do things here. Culture is not how we feel about them.”
  — Sarah, [10:53]

• Mark and Sarah discuss how actions—not words or stated values—define culture. If a company says it cares but acts otherwise (e.g., layoffs by email), the real culture is revealed through those behaviors.

• Mark references Johnson & Johnson’s Credo:

  • First responsibility: to customers and those who use their products/services, with profit for shareholders coming after.
  • A company’s true values are evident in its repeatable actions (especially in tough times), not website statements or all-hands pledges.

4. Behavior and Accountability: The Basis of Performance

Timestamps: [14:42] – [17:36]

• Performance culture is built through observable action—how results are delivered, how people are treated, and how issues are handled.

• Performance reviews are cited: when reviews and feedback are sloppy or ineffective employees aren’t differentiated from high performers, performance culture suffers.

• Quote:

  “If performance reviews are sloppily administered and sloppily delivered, as they are almost everywhere we go, feedback is not given and high performers are not rewarded quite differently from ineffective performance. Those are the kind of things that go into a performance culture.”
  — Mark, [14:26]

• All Manager Tools guidance (like the Feedback Model) is based on observable behaviors, not on judging people or focusing on feelings.

• Memorable analogy:

  "There's a difference between being nice and being kind. ... The kind person takes the risk of introducing a little bit of a pinch there in the relationship... to help the other person."
  — Mark, [16:22]

5. Practical Guidance for Managers

Timestamps: [17:36] – [19:08]

• To set or reset culture, simply state:

  “Our culture is going to be one of performance. And performance includes not just the work we do, but how we treat each other and how we build for the future.”
  — Mark, [18:05]

• The true sustaining force in organizations is performance and accountability. No amount of strategy or feel-good culture will compensate for the absence of these.

• Closing summary from Mark:

  “Build a culture of performance and accountability. Without it, no strategy will save you.”
  — Mark, [19:02]

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Notable Quotes & Moments

• Sarah: “How a company's employees feel is actually not the purview of the company and therefore should not be any part of an organization's culture.” [05:08]

• Mark: “What the members or employees of your organization do is what the culture of your organization is.” [11:14]

• Mark: “There are people who have good feelings and who do bad work, and there are people who have bad feelings and ... do good work.” [15:30]

• Feedback Model Note: “The purpose of feedback is to encourage effective behavior and in the future. That's why there's only one model. And it's about performance. It's not about the person.” [16:36]

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Key Timestamps

• [01:14] – Exploring the confusion around culture definitions
• [02:55] – Peter Drucker’s real meaning: culture vs. strategy
• [05:08] – The irrelevance of feelings in defining culture
• [10:53] – Manager Tools’ behavior-based definition of culture
• [14:26] – Performance review practices as culture indicators
• [16:22] – The difference between nice and kind management
• [18:05] – Setting a culture of performance
• [19:02] – Final summary and call to action

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Tone & Style

Throughout the episode, Sarah and Mark maintain a direct, no-nonsense tone, challenging popular management trends around culture with practical examples, wry humor, and real-world advice. They consistently advocate for clarity, behavioral accountability, and performance over jargon, theorizing, or sentimental appeals in management practice.

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This summary distills the heart of the episode for newcomers and listeners alike, clarifying what “culture” means from the Manager Tools perspective and how to truly build a high-performance organization.

Transcript

[A]

Welcome to Manager Tools. This is Sarah and I'm Mark. Today's podcast, Culture Chapter three performance.

[B]

As always, our content has been crafted by humans and we are now certified by Proudly Human. The questions this cast answers are what is culture? What kind of culture should I have on my team? And how do I instill the right culture?

[A]

If you want answers to these questions and more, keep listening.

[C]

Managers in Europe, now is the time Manager Tools is heading back your way in late November and early December. And if you've been thinking about bringing our on site training to your organization, now is the time to act. Effective manager, effective communicator, hiring manager, senior manager, all available at our standard training rate with zero travel fees. Reach out to [e-mail] to lock in your dates before they're gone. And join us in London starting November 24 for a public conference, including the Effective Senior Manager conference on the 26th.

[A]

All right, so, Mark, there's always a lot of talk, I'm going to say, about culture experts talking about culture, its importance, and it's in part at least because they define culture however they want. Culture doesn't mean the same thing to all of us. It's kind of like engagement in that way, if you will.

[C]

Yeah.

[A]

And they can say whatever they want. But some cultures are better than others, regardless of the definition that those experts might apply to what culture actually is. That's what we're talking about today.

[B]

Yeah. If you've ever been to a mission, vision, values, or culture meeting where you're trying to figure out what those things should be for your organization, you know the horror of it.

[A]

The horror.

[B]

But when you're early in your career, that kind of thing, being invited to that kind of thing, first of all, if you are, that's the tip of the hat to you. You're probably doing well enough that people think you can contribute at a higher level. And that's good. And it sounds cool. You're getting input into something that affects the whole organization. You've got a voice. This is great. But those people who have experience will tell you that those sessions are a complete waste of time. They end up being a vocabulary drill, arguing about the differences between the words empower and enable, which doesn't really matter anyway.

[A]

Yes, exactly, exactly. Folks. When it comes to culture, there's one concept that is above all the rest. Effective leaders know that vocabulary drills in the world don't matter compared to performance.

[B]

Yeah. So our outline is simple. Today we're going to start with a review of Peter Drucker's concepts. He has a famous quote about culture that many people, everyone misunderstands. So Drucker, culture and performance is our first item. And then our second item is what actually is performance.

[A]

So we're going to start by talking Druck, Drucker, culture and performance. And Mark, I want you to give this one a go because you're, I mean, you and Drucker go way back.

[B]

Yeah, that's funny. Yeah, it's. Drucker's comment is. This comment is probably the most misunderstood and therefore misapplied statements that he ever uttered. And the statement is culture eats strategy for breakfast. The way Mr. Drucker, and if you're not familiar with Mr. Drucker, he is the dean of all management thinkers. Rest in peace. Basically, the way he's misunderstood boils down to laziness. First, we're going to start with a lot of professionals think that strategy is hard, it's complex, it's easy to be wrong. You have to know stuff most folks don't know. That's not true. Strategy is not complex. You can be wrong and there's a lot of risk. But that doesn't make it inherently complex. And because of that, because strategy and delivering on things can require a high degree of discipline and accountability and so on, most people then say, well, having a culture conversation is easy because we can talk about lofty goals and so on. And they define culture utterly, wrongly, as a meeting where everybody comes together, talks about big ideas, and then unfortunately argues about all kind of arcane words. And what they're wanting to do is avoid the hard things like strategic thinkings and strategic thinking, sorry. And focus on the easy things like fancy words in a meeting with coffee and donuts, ideally at an off site somewhere pretty and posh. And the culture they want to talk about and create is one based on how people feel versus what the organization must do.

[A]

Yes, that's exactly it. And folks, these culture peddlers, if you will, are wrong. And if you're wondering how wrong, here's a news flash. How a company's employees feel is actually not the purview of the company and therefore should not be any part of an organization's culture. Now, folks, they're not just barking up the wrong tree, they're in the wrong forest entirely. And they shouldn't be talking about the ground and not the trees. Anyway, there's nothing more wrong than an off site about culture and its vocabulary.

[B]

Yeah. Now here's what Peter Drucker actually meant when he said Culture eats strategy for breakfast. He meant that an organization which does it work, does its work well and faithfully, even with a weak strategy, will do better than a company with a great and clever strategy which then doesn't do the basics of delivering what they say they'll deliver. When he said culture, what he meant was performance.

[A]

Exactly. Exactly. So what does this mean? Drucker was saying that culture is not what culture strategists want you to think it is. Fancy comforting vocabulary sessions with tea and scones on a holistic retreat with long breaks for contemplation and personal sharing sessions with an emotional catharsis.

[B]

When Drucker said culture, what he meant was what an organization does, what the people in the company actually do, how they behave, not how they feel. You don't have to talk about what culture your organization wants because every organization already has a culture, the behavior of its employees. It basically is. It gives the lie to all these corporate value statements and culture statements that sound really, really great. But when you talk about people in the office, they're backstabbing and, and you know, telling story, gossiping and, and trying to avoid being held accountable and engaging in politics, all of those things, that's your culture, what your people do.

[A]

Yeah, that's exactly folks. Drucker meant that even if you have a brilliant strategy, if your behaviors do not reward performance and drive out non performance, your organization will not deliver on that strategy. And if a competitive organization does not deliver what customers want, it will then cease to exist. Laud them with all the awards you want. And that organization, as good as it is, as great ideas as it may have, will still fail if their planning is sharp and built around excellent ideas. But they don't follow through. They don't do the things they'll actually say they're going to do. They don't hold people accountable, they don't meet their targets, they don't meet their deadlines. That wonderful strategy, no matter how wonderful it might be, will not save that company.

[B]

And that's also true irrespective of their feelings. If everybody feels good and feels safe and feels happy and they don't do the right things, even a great strategy won't save that. A great strategy and great feelings with nice culture words will not save an organization because organizations exist to perform.

[A]

Exactly.

[B]

That's what they do. That's why we measure organizations, corporate organizations. He meant the opposite of the converse too. Even a company with poor strategy can survive and even thrive if they engage in basics, clear deliverables on time, deliveries, fair Dealings with customers, reasonable standards for work effectiveness and conservative financial management. A performing company can survive forever and then when they do happen upon the right strategy, they will explode into over performance. They will be, as the saying goes, an overnight success. But it's all function. It's all a function of the performance, which is behavior rather than the feelings or the stated culture or the website culture or the strategy.

[A]

Yes, that's exactly it.

[C]

The senior leaders your organization needs five years from now are the managers you have today. The question is whether anyone is developing them intentionally or. Or just hoping they figure it out on their own. Manager Tools offers organizational delivery across our full conference portfolio. The effective manager, effective communicator, effective hiring manager and effective senior manager conferences. From your first time managers to your directs, we build a common leadership language at every level. Contact us at customerserviceanager-tools.com

[A]

now that we know what Drucker actually meant when he said culture eats strategy for breakfast. And now we know that it has to do with really truly what is performance. Let's talk about that. And folks, before we define performance, let's set out again the Manager Tools definition of culture. And I don't think we've even said that in today's cast yet.

[B]

We haven't. Yeah, it's weird.

[A]

It is weird. It is a little weird. The Manager Tools definition of culture is culture is nothing more than the sum total of all the behaviors of all of the people in your organization. Culture is the way we do things here. Culture is not how we feel about them.

[B]

Yeah, what the members or employees of your organization do is what the culture of your organization is. If your organization says it cares about organization but then lays them off by email. Caring about employees is not the culture. In fact, companies I would argue, Sarah, and you might disagree, but I would argue companies who go through serial layoffs cannot claim that their culture is caring about employees.

[A]

I agree.

[B]

All they're doing is hiding the inability of their executives to plan. Well, they overhiered and then they make the employees at lower levels pay for their mistakes. Well, that's not a company that values its employees, right?

[A]

Absolutely.

[B]

And to say nothing of laying off 10,000 employees in one week and then announcing a multi billion dollar stock buyback the next week because you have all kinds of cash and you want to raise the stock price even further.

[A]

Yes.

[B]

By the way, this brings something up I've been trying to figure out. I think I'm going to put an item in things. We think. We think. And folks, if you're a licensee you should get things. We think. We think every Wednesday it comes out. We've been doing it now for I think, 19, 18 years maybe.

[A]

I don't know exactly, I don't remember the year. But yeah, 18, 19, yeah.

[B]

I've been meaning to write about Johnson and Johnson's credo, which is my favorite. It's a combination of vision, mission, values and culture all together. And I'm not going to go through all of it because it has several paragraphs. It goes through reviews every five or ten years. Mike and I's friend and West Point classmate Alex Gorski was recently the chairman and CEO of Johnson Johnson, and he led a redo of the credo. But the first and last lines of the credo are what is most important. The first line says, we believe our first responsibility is to the doctors, patients, nurses, mothers, fathers, sisters and brothers who use our products and services. And then it goes through all the things they think is important about running a successful modern company, and so on. And the very last line says, and we believe when we operate according to these principles, the shareholders should realize a fair return. This is one of the reasons why people rail against private equity culture, is because private equity culture is often built around doing things that raise the stock price.

[A]

Yes.

[B]

Which in a company like J and J with a long history, probably 150 years by now, the first thought is, let's take care of our customers and the people who are around our customers, which are doctors, nurses, patients and their families. And then we believe if we do these other things well, the stockholders should realize a fair return. Now, somebody might say, well, the company does care, but they have to take tough decisions about the future of the company and its profitability. And this is so. But caring folks is not behavior. Espousing a value of performance is laudable, but it is not the culture of the company. In other words, performance. If performance reviews are sloppily administered and sloppily delivered, as they are almost everywhere we go, feedback is not given and high performers are not rewarded quite differently from ineffective performance. Those are the kind of things that go into a performance culture, which is along with accountability and many other things, and so on, and clear deliverables and reporting and all those kinds of things.

[A]

Yeah, that's exactly it. So folks, when you truly understand all this, what you can really see is that Peter Drucker meant about culture. It is performance which is nothing more than the aggregated behaviors of everyone in your organization. What your people do is what actually matters, not how they feel. About it, but what they actually do.

[B]

Yeah.

[A]

When they're at.

[B]

What are they for the organization to be an employee.

[A]

Yes, exactly. And no, it's not that we don't care about people's feelings, folks, but yeah, we do. The purpose of the organization, that's. Yeah, exactly.

[B]

Yeah. Each one of us. If I'm somebody's manager, of course I care about the feelings of my employees, but I am not the company. The company doesn't understand because it doesn't exist.

[A]

Yes, exactly.

[B]

It has a legal entity as personhood, but it does not care about the employee's feelings. And there are people who have good feelings and who do bad work, and there are people who have bad feelings and never show them, but also do good work. And by work, we include how they treat their colleagues. So this is why all of career tools, all of manager tools, and all executive tools is built on a foundation of behaviors versus ideas about strategy or feelings or culture, defined as individual feelings and ideals. Our purest example of this is the manager tools feedback model, where we can give negative or positive feedback in exactly the same tone. Because the purpose of all feedback, one is not to punish, the other is not to praise. Negative versus positive. The purpose of feedback is to encourage effective behavior and in the future. That's why there's only one model. And it's about performance. It's not about the person. Gosh, we say. What's the quote we've used a lot in the last 10 years or so, Sarah? Something like, there's a difference between being nice and being kind. If someone around you has spinach on their teeth, the nice person says, oh, I don't want to upset them. The kind person takes the risk of introducing a little bit of a pinch there in the relationship. I'm sorry, but you've got spinach on your teeth. Yeah, that's what the kind person does. They take a little bit of a risk, a little bit of attention in the relationship to help the other person. Same thing with the manager. The nice manager says, it's okay, he'll get better, it'll be fine.

[A]

Yeah, I'll let it go. It's fine.

[B]

The kind manager does what you want your manager to do to you. And this is all a performance conversation that we're having right now. And that is, do you want your boss to know you did something wrong and not mention it to you even though you know he knows? Yeah, I don't think you do. I think you'd rather your boss would just say something briefly, professionally, politely, kindly, and Move on.

[A]

Yes, right.

[B]

And that's what a culture of performance is. And that's why all of our stuff is built on behavior.

[A]

Yes, that's exactly it. That's exactly it. So folks, if an organization does, does not thinks or feels does what it says it's going to do, it is likely to perform well enough to survive. This means clear, well communicated goals and behavioral standards, professional effort, fair but firm accountability like feedback and incentives for those behaviors throughout the organization.

[B]

So folks, what this means, if you ever have a chance to set a culture, if your boss says, I really want you to have a culture session with your people, say okay, I'm happy to do it, no problem. I'll report back to you after it's done. You're going to get together and ask for input and then say, folks, our culture is going to be one of performance. And performance includes not just the work we do, but how we treat each other and how we build for the future. Yep, that's it. So I'm going to summarize here. Mr. Drucker was right, as he always is, in spite of everybody misunderstanding him and wanting to idolize the idea of soft feeling culture words at off sites. Culture does eat strategy for breakfast. They misunderstand because most organizations regrettably think culture is about feelings and ideals rather than behavioral performance. It is a culture of performance that sustains organizations, not clever strategy. Having both is great, by the way.

[A]

Absolutely.

[B]

Build a culture of performance and accountability. Without it, no strategy will save you.

[A]

That's absolutely true. Thanks for joining us folks. We hope this one helped you. Now help us help others and tell your friends. And of course follow rate and review our podcast. And remember, five stars only please.

[B]

Five stars only please.