Culture is business critical ...
Every business is facing multi-faceted challenges that have been accelerated by the global pandemic, but culture is business critical. Culture is increasingly the differentiator both to win new talent and retain loyal customers. Culture is about the purpose of the enterprise, its values and how it expresses those values in the actions taken to sustain its business activities. In today’s world, Culture is also about the wellbeing of people and protection of the environment.
Firstly, people are concerned about their personal safety, for instance transmission of infection through air conditioning systems in office blocks, which may or may not have the appropriate filters; or a foreboding of using public transport due to fear of being in close contact with others during the journey, which means there has been no cooling off of congestion on busy roads for instance in the capital, in this the third lockdown in the United Kingdom.
Secondly, governments all around the world are only succeeding in part to get the pandemic under control. Vaccination numbers are up in some countries but not in all parts of the world; and on the television news every day, we are hearing that we are not safe until the whole world is safe, or rather vaccinated. But, the vaccines are insufficient in number to cover the world population and so some countries will be waiting 2-3 years before they can protect their populations.
That brings into play geopolitics over which many firms feel they have little or no control. And yet they do to some extent. They can choose how to look after their own people and keep them safe. That in turn will help governments, which are unable to operate closer to the point of need.
Thirdly, working practices have changed. The hybrid model – in part remote working from home, and in part a return to working from the office, is fast becoming the norm. Companies who do not offer this flexibility and try to impose a return to the office are losing staff faster than they thought possible.
Beyond the immediate concerns of protecting people’s health and safety in the truest sense, companies are also facing talent shortages, and are finding that despite the acceleration of digital transformation programmes, the technology improvements are not yielding the results they had anticipated or hoped for.
Leaders are fast realising that despite the need for cost reduction in the name of survival, headcount reduction is a dangerous path to tread. Loss of identity may ensue in the turmoil of fast staff turnarounds. Whatever the justification may have been, for instance uncertainty over furlough schemes ending too soon, and/or a far slower return in demand levels in some sectors.
The variability of lockdown rules in different geographical areas has meant we are not back to normal, and probably never will be. Hence, the need to retain and bolster one’s own corporate culture is fast becoming a business imperative and a strategic necessity.
We are all inter-connected and inter-dependent. If one sector is failing it will have an impact on another.
Everything that is happening around us has an impact on the enterprise itself. Put simply people’s lives have been disrupted so abruptly, leaving little room to make contingency plans. Some have lost members of their family due to Covid19, some have not fully recovered from the so-called “long form of Covid19.”
Others still are unhappy by the way they have been treated, for instance, the stringent measures imposed by some companies during lockdown with some managers demanding zoom screens to be switched on 24/7.
This is overstepping the mark, even if you are in a traditional hierarchical structure. And it is no excuse to make believe that attitudes have changed as a result of social media. It does not make it alright for a firm to carry out surveillance measures to this degree. Nothing could be more damaging to culture and it is the erosion of trust that requires urgent attention.
For instance, the latest high profile case in France, where workers were spied upon without being made aware their employer or prospective employer was doing so, over concerns due to activist tendencies (an incident which pre-dates Covid19 as it turns out). Quite clearly it was not the best way of dealing with those concerns.
This is to say, for many the trust has been eroded, and without trust it is very difficult to make the changes, which we urgently need to do.
Many leaders are facing the challenge of bringing back the workforce to half-empty office buildings, where there is no surety that safety standards will be sufficient and also because the flexibility of not having to face the daily commute has become a new habit.
Despite the other difficulties that may arise for instance due to school closures if you are a parent, the idea of working from home has started to become ‘sticky’ and once that happens it is a habit that is difficult to break.
By focusing our attention on ‘first principles’ we can get to the root cause of the problem, and then we can begin to work out the solution.
- What are people looking for?
- What do people need?
- What don’t they know they need?
Debate, different points of view being shared on a regular basis is a necessary part of the process. A willingness to listen first, then to understand the root cause of what is troubling people, is now critical for business success. For a very simple reason:
Change happens when everyone ‘feels’ a part of it, having identified the reasons for it, understanding the direction we are headed in.
Every organization is unique. A unique group of people therein will come up with a unique set of principles (or values) to better serve their needs, the customers and the immediate addressable market.
However, leaders need to have a greater ambition if they would like to have a healthy, happy and high performing workforce to play the game of business and win.
In today’s reality, this means thinking beyond the boundaries previously recognised as business critical.
There is increasing demand from investors, employees and customers to see ethical standards raised, for there to be transparency and for sustainability initiatives to be enacted and not simply stated as intentions. The enterprise must be fully anchored in the lives of their people, their communities and ecosystems whilst also recognising the role it must play on the world stage.
In fact, without the ambition to solve a bigger problem than the immediate reality, it is actually quite difficult to create a forward momentum inside the organization.
Everyone ‘feels’ good if they are doing something that is beyond the self; and if they have the freedom to choose to take part in the business transformation and beyond if they can see that the impact of their actions is for the good of society and the planet.
As Marianna Mazzucato states in her recent book –
“The case for radical change is overwhelming.”
We need radical change: at a systemic and a structural level across society. And in the corporation, we need a culture of innovation.
This requires ‘productive’ investment. It means investment in people and not just technology. The so-called ‘intangibles’ particularly intellectual property and brand equity are becoming increasingly important measures of success.
A glimpse at the future reveals that advanced digital technologies, with the advent of quantum computing can enhance human capabilities. For instance, it can also speed up developments of innovative vaccines, such as the Biontech-Pfizer Covid19 jab (one of the most effective now known to have 95% coverage against infection) is built on new science using mRNA methodology and has been rolled out in under 12 months.
New science combined with advanced digital technologies will be levelling out the field in the near rather than far future. This means that to gain competitive advantage you need to look inwards and start examining the core values of your business. From there you can start to build your purpose.
Purpose-driven, Innovation and Values-led companies are gaining victories all around the world, and growing at a much faster rate (5X) compared with their slower reacting peers. When the leadership and senior management teams hesitate in articulating core values of the business or it purpose, then you know you have a problem far more severe than any shortfall in budget or expected revenue growth.
It is still the case that the majority of people seek good leadership and it is an important part of their working lives. They would much rather be working for an inspirational, compassionate leader rather than someone who claims to have all the answers and has not set foot on the shop floor or been out to market for some considerable time. Some bosses seem to think it was something they did in their youth and is no longer required now that they have reached the top of the tree!
Nothing could be further from the truth. Every successful leader I know, and have had the pleasure of working with, is humble and as a first priority is out there in the market place and on the shop floor, listening, observing, seeing first hand where there problems may be that need fixing.
It is then the case that culture should be the cornerstone of strategy. Your core business values and purpose are the bedrock of any goal you may be seeking to achieve. Without total buy-in from the workforce it will be nearly impossible to make any real progress.
On the other hand, great strides can be taken if leaders spend a little time nurturing the magic: Trust.
Trust is not something that grows on trees, or that can be found by imposing it upon people. Trust needs to be earned, little by little, day by day.
Leaders should not assume that just because people do not speak up, they actually believe what is being said or buy into what is being done. Even during the hardships posed by Covid19, many companies have experienced a significant turnover in their staff. So really it pays for itself if trust is built up consistently over time.
Moreover, without it you cannot build adaptive resilience, nor win breakthrough innovations.
Hence why ‘siloed’ actions will not be sufficient. Online learning or remote training in some aspects of management science will help, but we need to take a multidisciplinary and practical approach to leadership development and knowledge sharing, at all levels of the organisation.
Every decision made counts. For instance, if I think through my actions more thoroughly by debating and learning with others, it is possible I will make a better decision; which if repeated across the organisation will build up a strategic competitive advantage.
For example, if as a clothing manufacturer I choose to identify full traceability of all the raw materials used, apply predictive analytics to determine demand for a specific item over the customer lifecycle, it is possible I will have less waste and less unsold inventory.
A large Swedish retailer is trialling made-to-measure custom jeans for individual customers, which not only benefits the planet, but also reinforces the key relationship. Providing a better service to better fit the needs at the individual level 1:1 ensures brand loyalty, which is after all what we are all seeking in business.
So as you see, culture is business critical, it is inextricably linked with core business strategy.
The way your culture makes people feel is the difference between attracting talent or not. Serving customers well or not. Continuing in existence and thriving as an enterprise or not.
It cannot be separated out as an item on the board’s agenda, which we will talk about when we have time. As though it were something that takes care of itself. The reality is that it doesn’t. It requires consistent work at the strategic level, and constant reinforcement, if you are to succeed in building an adaptive and resilient culture.
Let’s contemplate this scenario for a moment:
- Every firm has access to advanced digital technologies, including quantum computing
- 3D modelling which reduces the cost of manufacturing and prototyping
- Optimal digital platforms with the ideal mix between cloud and edge computing
- Carbon neutral success
- Deploying new scientific methodologies to innovation
So then,
- What is your point of difference?
- What is your competitive advantage?
- What is your USP?
If every firm exists to create a customer, then how will you do this?
In my view, the winning card will be your Culture, which will in turn attract the right talent. In the words of Maya Angelou –
“People will forget what you did and people will forget what you say, but they will never forget how you made them feel.”
Leadership development across the organisation should be top of the agenda. How this will be implemented on a day-to-day basis will require imagination, given all the constraints imposed by present circumstances and for each company the solution may be different.
However, the commonality for organisations that succeed will not lie in benchmarking or comparable balanced scorecards, but rather in the use of their collective imagination and human ingenuity.
To create something tangible that is worthwhile, to build opportunities for consistent growth and profits as a result thereof, then you need to start by building a strong, adaptive and resilient culture. That all begins with building trust.
The point is that when culture becomes the cornerstone of strategy, it need not cost more to implement, and the enterprise has everything to gain, with a much more engaged and high performing workforce.
More importantly a culture built on trust will enable productive innovation and facilitate successful implementation of structural and systemic changes that may be needed. It will form a very useful business capability, adaptive resilience. It’s the ability to bounce back from adversity and re-invent the enterprise, discovering new possibilities that may not have been visible previously.
This in turn will foster progress and ultimately sustainable growth.
In this sense you need the collective to adopt an “open mindset,” combining the approach of science
(experimentation and new methodologies) and art (creativity and imagination) to foster a disciplined approach to innovation.
Then the magic begins to happen with what Matthew Syed refers to as the “cross-pollination” of ideas across the enterprise.
For those businesses still standing after 100 or more years, it is clear that the artistic part of business is as important as the science, which is why we need to dream big – or in the words of Walt Disney –
“I like impossible, there is less competition over there.”
Culture also means building a formidable legacy, which will lend its enduring strength to a process of continual renewal. Namely, what is more often referred to as innovation.
