“Culture eats strategy for breakfast” – so said (allegedly) business and management guru Peter Drucker.

We all know that great culture is incredibly important if a firm wants to build lasting success. Great culture aligns behaviours and limits the scope for individuals to pursue their own political agendas. It ensures integrity, teamwork and loyalty. It shines through in the customer experience.

Examine great firms that have been able to dominate their industries over the decades, and a great culture takes centre stage in their story, more important than great products or, indeed, great strategy.

The once-great banking industry has of course suffered a spectacular denouement over the last decade, with many of the biggest players revealed to be nothing better than greedy organisations run by greedy egos. Long on talent, short on culture.

For obvious reasons, Andrew Bailey, Deputy Governor of the Bank of England, CEO of the UK’s Prudential Regulation Authority and soon-to-be CEO of the Financial Conduct Authority, made culture in financial services the centrepiece of this recent speech.

The problem with organisational culture of course, as Andrew Bailey points out, is that it’s intangible. Like oxygen, you know it’s there, but you can’t smell it, feel it or touch it. With it, you’re good to go, without it, you’re dead. Culture comes from the top, of course, but if the leaders in your firm are tucked away in their offices or trotting around the globe (as most tend to be), how do they bring culture to life for the vast swathes of employees they rarely touch?

In my experience, and unlike oxygen in this instance, great culture is a very rare commodity. Far too common are the senior execs who are obsessed with their own careers and compensation, far too few are those who inspire us and embody critical values such as integrity and trust, values that bring culture to life.

So if you’re struggling to truly understand what great culture really is all about in your organisation, you’re not alone.

Perhaps I can point you in the right direction.

Fifteen years ago, Straight from the Gut, the autobiography of Jack Welch, legendary Chairman and CEO of General Electric, was serialised in The Times of London. He had led GE through an enormously successful period of growth and profitability over two decades, taking the value of the company from $12bn to $280bn. He had been crowned CEO of the Century by Fortune. Cutting 100,000s of employees from the GE payroll during his tenure at the top, he sported a fierce reputation as a tough and sometimes brutal leader.

As a young(ish) sales guy working at Barclays Capital at the time, I was mildly interested in reading these excerpts on Jack Welch’s story. But sadly I was too wrapped up in building my own career to take the time to read the book. More fool me.

Fast forward fifteen years to 2016. In my quest to lap up lessons in leadership from great CEOs of the past, I recently revisited “Straight from the Gut“. I expected to find a great book on leadership of course, and probably a great book on management, and even business strategy.

What I found, first and foremost, was a great book about organisational culture.

Obviously, if you’ve not read it before, you are now already scrambling on to Amazon or iBooks to order the book. If not, do it. For the price of a few drinks you will learn all about great culture from a legend.

The interesting thing is, not once in the 26 chapter headings does the word ‘culture’ appear. Jack didn’t set out to write a bible on corporate culture. The word ‘culture’ only appears 42 times in the whole book, compared to well over 100 times for ‘leader’/’leadership’, for example.

In the last section of the book, there is a chapter called “What this CEO thing is all about”, where Jack shares the ideas and concepts which most helped him take GE to such exalted heights. Fifteenth in that list of ideas (and just before “Strategy”, funnily enough – Drucker would be pleased) is “Culture Counts”. He doesn’t eulogise the culture concept for its own sake, however, but uses it to explain some of the big decisions that he made.

So while Jack didn’t explicitly write a book about culture, to my mind the book is, above anything else, a blueprint for great culture.

Indeed, there is a chapter called “The People Factory”, where Jack reveals how under his stewardship there was an enormous commitment to great ‘people processes’:

“GE’s all about finding and building great people, no matter where they come from. I’m over the top on lots of issues, but none comes as close to the passion I have for making people GE’s core competency.”

Think about that quote for a moment, and then compare it to how people are managed in your organisation. Are people the top priority for your managers and leaders? If you are a manager or leader, are your people your top priority? I’m sure you’ll say they are, but take another moment to think if that is really the case – or are you mainly in it for yourself?

As you plough through the book, you will realise that practically everything ties back to a total and uncompromising commitment to GE’s people. Promoting the best, identifying future leaders, relentless reviews of managers, helping struggling talent, stretching managers and, inevitably, managing out the weakest performers.

Jack spent 70% of his time “in the field”, in front of his business managers, helping them, challenging them, reviewing them, exhorting them to achieve greater levels of performance. You might think he was overzealous, but he obviously believed that to build a great organisation, he had to be front and centre, at the battlefront, driving the machine. Not staring at reports in Head Office.

Of course, from this consistent and persistent pursuit of people perfection sprang a great culture.

Everyone knew who the CEO was, what his values were and what he expected from his people. The message was the same, year in, year out. It is this consistency and fairness of approach which defined the ‘GE way’ – the culture. Products, markets and clients can all spring up almost overnight to help ‘explain’ an organisation’s success. Culture, on the other hand, cannot possibly be built overnight. Only after years of dedication to a rigorous set of values and processes can a great culture emerge.

So when it came to hiring, executives had to hire “GE people”, i.e. people who fit the GE mould. No room for talented jerks, no space for mavericks who didn’t respect the culture.

Think again of your organisation. Do the hiring processes embody a desire to hire only people who share the values of your firm, people who will strengthen your culture? Do you even know your firm’s values? If you don’t, shame on your leaders of course for not communicating them relentlessly, through not only their words, but their actions.

In my experience in the banking industry, many leaders said one thing – after all talk is cheap – and then did the complete opposite when it came to their personal conduct and behaviour. This is why Andrew Bailey is so fervently communicating about the need for better culture in finance.

Something that really stands out in “Straight from the Gut” is that Jack started the preparations for his eventual departure as Chairman and CEO seven years before the planned departure date in 2001. Seven years! The last third of his entire twenty year tenure as leader were spent preparing the ground for his successor.

CEOs in finance are a bit like premiership football managers – clinging on for a couple of years before getting kicked off into the sunset. The book provides a fascinating insight on the selection process for Jack’s successor, and the eventual emergence of Jeff Immelt as the ‘winner’. If ever you wanted a lesson in succession planning, it’s right there in the book.

Another lesson about great culture was, in my opinion, the insistence on informality. Jack dismantled bureaucracy and replaced it with an easy informality which broke down hierarchy and encouraged people to speak up, to challenge the leaders. He truly believed that expertise and ideas lay at the coal face and that GE was more effective if that expertise had a voice. He wanted people to open up, not clam up.

As mentioned earlier, Jack had a fierce reputation, and did not tolerate serial underperformers. But there are a couple of great quotes in the book which really reflect some outstanding wisdom when it came to dealing with people:

“When people make mistakes, the last thing they need is discipline. It’s time for encouragement and confidence building.”

“If we’re managing good people who are clearly eating themselves up over an error, our job is to help them through it”

Think about an occasion when you screwed up – how did your boss deal with it? I can remember a time when I was practically eviscerated by a former boss for making a mistake. It caused a permanent breakdown in what was before that a great relationship.

How do you handle one of your team when they get something wrong? It is way too easy to fly off the handle, and take them down a peg or two in front of the rest of the team. But it takes courage to follow the path that Jack lays out.

Frankly the lessons about great culture go on and on. If I quote much more from the book I’ll start infringing copyright laws.

Products, markets and clients come and go. All major organisations are wrestling with the relentless onslaught of technological change. Banking in particular is being disrupted by newcomers with a clean reputation and no baggage from the past.

But all that firms really are is their people. And as “Straight from the Gut” genuinely reveals, culture really does eats strategy, and everything else on top, for breakfast.