Culture has long been a focus for leadership teams and is often considered the key to sustained performance. Leaders intuitively understand the concept of culture, however when asked, many have a hard time defining it. That’s because culture is nebulous. It represents different things to different organizations which makes it hard to characterize.

As entrepreneurs, investors, and operators with four decades of experience, we characterize culture as an outcome of consistent execution. Strong leaders consistently execute by delivering on expectations. This creates happy customers, confident investors and engaged employees. The inability to execute results in unhappy customers, anxious investors and stressed employees.

At Frame, we are focused on helping organizations mitigate execution risk. It is our experience that consistent execution requires the alignment of three key leadership elements. First, a clear vision. Second, a cogent strategy in support of that vision. And third, recruiting the right people to deliver on the strategy.

This alignment is relatively easy when you are a young company with a small team launching your first product. It becomes infinitely more difficult when you inject complexity. As organizations grow, they add new people with different backgrounds, enter new markets with unknown dynamics, and introduce new offerings with untested results. These changes require purposeful realignment. When done well a durable advantage is created.

If culture is an outcome of consistent execution, a tangible measure of culture is reputation. Take for example Southwest Airlines and Patagonia. These organizations have vastly different cultures, yet both maintain a strong reputation for execution that is the result of a distinct vision, a compelling strategy, and a dedicated ‘tribe’ of people in alignment.

The importance of execution is corroborated in a recent Wall Street Journal article* on corporate effectiveness which noted that in the U.S., from 2009 to 2015, a portfolio of companies across Fortune’s “Best Companies to Work For” outperformed the S&P 500 by over 84 percentage points, while a similar portfolio of Glassdoor’s “Best Places to Work” outperformed the broader market by more than 115 percentage points.

Put simply, there is no substitution for execution.

Are you aligned?

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* https://www.wsj.com/articles/happy-employees-yield-happy-investors