What Great Organizations Have in Common?
This age of flux, clutter and competition, there seems to be an end of sustainable competitive advantage? Today everything can be copied, quickly except originality.
So what is it?
Culture is a smiling face when you pass by. Culture is someone opening the door when your hands are full. Culture is jumping out of bed because you are excited to get to work.
Culture are values, ideology, conviction, identity, belief, tradition and many more. It resides in heart and mind of people. Culture either Drives or Drains people energy and motivation. It’s not just one aspect of the game, it’s the game. People are not machines and companies are not mechanism! We all want to be fulfilled. It’s a way of life.
We’ve all heard,
Culture eats strategy for breakfast – Peter Drucker
Of course, the reality is that culture and strategy interact, and in the ideal case they are mutually reinforcing.
People are loyal to Culture, not Strategy
Culture provides resilience in tough times. You have to be loyal to earn loyalty.
a. “We’ve made a commitment to our staff that there will be no layoffs related to this [lean] work.” -Michael Rona, (then) President, Virginia Mason Medical Center
b. A resilient culture was more important than new strategies in saving Starbucks during their tough times.
c. The corrupt culture of WorldCom caused the company to collapse under its own weight when the pressure was on.
How is bilateral loyalty expected and reflected in your culture?
What can you do to enhance that loyalty?
How tough and resilient is your culture?
Would people be with you during a crisis situation?
Culture and strategy interact. People are loyal to culture, not strategy. A weak culture will kill the organization and a strong culture will make the organization stronger.
Culture is more efficient than strategy
a. During the fuel price crisis of 1991, Southwest Airlines didn’t have to execute a strategy of pay cuts – employees volunteered for it happily.
b. Nordstrom is more than a name, it’s a culture. People don’t go above and beyond the call of duty because it’s in their policy. Please read their policy below . This is the Nordstrom policy manual in its entirety…
Welcome to Nordstrom
We’re glad to have you with our Company. Our number one goal is to provide outstanding customer service. Set both your personal and professional goals high. We have great confidence in your ability to achieve them.
Nordstrom Rules: Rule #1: Use best judgment in all situations. There will be no additional rules.
Please feel free to ask your department manager, store manager, or division general manager any question at any time.
Culture creates Competitive Differentiation
Culture can evoke a contrarian business strategy
a. Les Schwab sells the same tires you can buy anywhere else – but no one can compete with their culture
Advertising is a tax you pay on having an unremarkable culture. – Robert Stephens, Founder of Geek Squad
Toms Shoes has become a cultural icon – creating a level of success that could never be attained by strategy alone. A business that gave away one pair of shoes for every one we sold.
You cannot buy publicity like that at any price – you earn it with a great mission and a powerful culture.
Your culture is your brand! – Tony Hsieh
What one sentence would your people use in response to the question: “What is the cultural brand of your place?”
How can you inspire your culture to get behind something that no one else is doing?
A brittle culture can doom even a great organization ( product or services)
A complacent culture can blind an organization to external threats. Look at IBM
What is your greatest cultural vulnerability?
When Strategy & Culture Collide, Culture Wins!
Dave tried for nine months to get a claim processed with United. The response was a firm and consistent “No.” They claimed he had waited longer than 24 hours to process a claim, so he was out of luck. A public relation disaster. Not fixing Dave Carroll’s guitar cost United $millions. Not to mention the damage to the company’s already bad reputation for customer service.
Within four days of the video being posted more than a million people viewed it and United Airline’s stock price dropped 10%, costing shareholders $180 million.
“I fail to understand why so much time and energy is being invested in showing product differentiation instead of sharing who the company is and their unique story? To me that defines an opportunity lost,” said Dave Carroll.
Cultural miscues are more damaging than strategic ones.
What is the greatest cultural resistance you can expect to your business strategies?
If (when!!!) you have a social media crisis will your people come to your defense or join in the attack?
Strategies can be copied but no one can copy your Culture
a. All the major air carriers copied the Southwest business model: but they all failed the culture test.
b. Hundreds of people tour Zappos every week but no one can copy the Zappos culture. Getting a job at the Zappos’ call center is as competitive as gaining admission at Harvard.
Culture is what inspires the Zappos.com
1. Deliver Wow Through Service
2. Embrace and Drive Change
3. Create Fun and a Little Weirdness
4. Be Adventurous, Creative and Open-Minded
5. Pursue Growth and Learning
6. Build Open and Honest Relationships with Communication
7. Build a Positive Team and Family Spirit
8. Do More with Less
9. Be Passionate and Determined
10. Be Humble
c. People don’t go to work for Patagonia because they love stuffing down coats into boxes! But it promoted fair labour practices and safe working conditions throughout Patagonia’s supply chain.
Culture provides Greater Discipline than disciplinary action does
We don’t need to tell people they can’t smoke in our buildings or discipline them when they do – co-workers will take care of that .
How does your culture enforce attitude and behavioural expectations?
Culture provides a level of risk prevention that cannot be attained with strategy alone.
a. Wal-Mart’s culture of low price at any cost has come at a huge cost to the company. They have spent over $100 million on the investigation of the ethical scandals and become the butt of cartoonist jokes everywhere.
Culture will have a significant impact on your Future Bottom Line.
Your bottom line next year will largely be determined by your current strategies; your bottom line in the following years will be more influenced by your current culture.
Every organization has a culture. Unfortunately, many, if not most, cultures develop by happen-stance. – Pamela Bilbre
How can you enhance the economic impact of your culture?
Your organization has a strategic plan – but do you have a culture plan?
Culture is the environment in which your strategy and brand survives or dies. It drives unity and make your strategy real. You cannot predict the outcome of a human development.
You can only like a farmer create conditions under which they will flourish. It’s believing in people. It’s helping each other out. It’s ideas and inspiration. It’s family.
It answers the question. Are entrepreneurs born or made?
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