Strategy Culture People
Introduction
The contemporary business leader currently contends with some very challenging times – whether it is AI, working from home, social media, or the ever-changing and unpredictable global landscape. As predicted, the changes are manifesting at an exponential rate, and as many commentators echo today, the rate of change will only increase.
The impact of these changes on the corporate landscape is best moderated through the constructs of Strategy, Culture, and People, as through these prisms leaders will stand the best chance to master any new environment.
There is no shortage of discussion on the Leadership Paradigm, and before dealing with the three constructs of strategy, culture, and people, we would want to consider leadership’s contribution to the handling of the ensuing change.
Impact of Leadership
Effective leadership, according to Howard Gardener’s book “Changing Minds” is about the art of telling a story that embraces a group identity and encapsulates the very lives of the people most affected by that story and by association that [corporate] mission. He argued that the art of storytelling is not just through words, but in symbols and actions that people relate to.
Gandhi realized the strength of symbolism [as part of the narrative of the story] in his garb, the wearing of a simple fabric loincloth representing the symbol of Indian independence. Napoleon understood the importance of narrative when he stated that the art of a great leader is to feed his men with hope.
The leader is the focal point upon which the strategic, cultural, and human capital will evolve and gravitate towards. So, what must a leader do to ensure that he or she is an effective leader?
At the base level, leaders need to be aligned with their core values within themselves, what they say they stand for, and how they act upon their words. Based upon that description of authenticity then the art of storytelling will manifest for any leader.
Victor Frankel in his book “Man's Search for meaning.” understood what it meant to be aligned to one’s core mission and values. His sense of purpose and view of how he would respond to new situations and who he would evolve to become saved him.
Followers understand this honesty and are willing to sacrifice and support those individuals who exhibit it, even if it would be more convenient to take an easier path.
Strategy
Sun Tzu (The Art of War) wrote that a strategy without tactics is the slowest route to victory, while tactics without strategy are the noise before defeat.
Any plan that is implemented without a clear understanding of its strategic intent and a clear direction as to how to achieve that strategic intent, will struggle at the outset. What may be an effective way to identify that strategic intent at the outset?
Michael Porter states that a company’s strategy is not its plan of action, its tactics upon which the action is based, or even the stepping stones to achieve those outcomes.
A strategy needs to be consumer-centric and determined largely in the hands of your core customer base and how they see your product or service, from an emotional perspective. It is less about what the service does for them in a transaction model but more specifically, what it means to them.
So, strategy is tied to the level of emotional investment placed into your product by the consumer. Lower-end products will not have the core emotional connection. These products will be more utilitarian, and price-driven, however as we progress up the emotional purchase chain, different emotive factors come into place.
Harvard Strategy Leader, Michael Porter, understood this point in his work on competitive advantage. When it comes to a strategic definition Porter states that strategy is not so much what you do, but what you represent.
The challenge for any leadership group in defining their strategy is to liberate themselves from their cerebral silos and seek to understand and embrace how people see what you do, and how it affects them. it may just be the feelings and self-identification of your consumers that offer the scaffolds upon which your strategy must be defined.
Consider the following examples:
What industry is Kodak in? Is it making film stock, or is it memories, [that’s why people take photos]? McDonald’s is it in the fast-food industry or real estate? I would argue it is in the “familiarity” industry and that is its competitive advantage. Every Mcdonalds' globally is similar in layout and livery – it is like coming home be it in Melbourne or Montana
Henry Mintzberg, a Canadian management theorist understood that leadership tends to spend most of its time putting out fires, rather than identifying where the source of the fire is. And identifying the source starts with some simple questions:
“what is it that we do for our consumer base?” is the starting point for any strategy.
Once we have a handle on refining our strategy, we can next look at the ingredients that will turn that strategic mission into reality, and the key lever is creating an aligned culture.
Culture
How does one put a value on culture? Culture is that amorphic ingredient that in many ways drives the form and nature of any group of individuals – from a sporting team to a national identity - who we interact and connect within the “in-group” and how others outside that group see us as well.
Hofstede, a Dutch social psychologist identified 6 key threads that can help gain an insight into the makeup of a national cultural profile. Although the research was carried out in the sixties and considered macro factors, the core principles upon which Hofstede’s work is based in translatable in the corporate landscape.
The leaders of any group must gain an understanding of the team’s human characteristics. What culture incorporates the human makeup and the nature of the relationships and commitments that individuals make to one another?
This understanding of what drives the collective is not truly reflected on the balance sheet but is essential to an organization’s success. David Sampson in his book “Our Tribal Future”, highlighted the evolution of the prosocial process of integration and defining norms within the “cultural mix”. The example of the Daimler-Benz and Chrysler merger in 1998 is a compelling example of how the cultural mix can and does have a deleterious effect on an organization. On paper the merger was compelling but ultimately it failed in 2007 due to the disconnect of two diverse cultures, a loose structure vs a highly structured one which could not be reconciled into an effective amalgam.
This case study highlights the critical importance of the “soft values” of culture(s) being aligned.
Soft values here represent the underlying perceptions and expectations of organizations, the fertile environments upon which initiatives can be based. Soft values are a variant of soft power is a term coined by Joseph Nye in his book of the same name. In it he explores the importance of creating a receptive environment for a projected message.
However, developing a porous and embracing culture that can be accepted by all key stakeholders can be challenging, especially in a diverse and multicultural world.
G. Clotaire Rapaille's book “7 Secrets of Marketing in A Multicultural World” understood this and postulated that to effectively convey an empathetic message to facilitate a culture that promotes empathy and a common purpose, leaders must understand the diverse cultural environment that the message is entering.
in short, creating that “magic culture” is not so simple, it requires effort, listening, honesty, the art of storytelling, and above all being human-centric. This leads us to the final section of this discussion – the people.
People
It all starts with people. All businesses are in the people business. It is people that make up businesses, unless maybe in the not-so-distant future where AI becomes the most dominant platform.
To succeed in creating an embracing culture and focused strategy, and implementing them effectively, the right people must be recruited. The challenge is what are the criteria upon which to make that choice. In short, what is their intelligence profile?
Ken Richarson discussed this in his book “The Making of intelligence” where the measurement and emphasis were squarely placed on cognitive capabilities, IQ.
Over time defining intelligence purely in those terms was found to be limiting, and the concept of EQ evolved, largely driven by the work of Daniel Goleman in a series of books on emotional intelligence. Research indicated that EQ within the corporate, team setting tended to be a more certain determinant of success than the traditional notion of IQ.
As the world became more complex Howard Gardner’s work built upon this and postulated an amalgam of “intelligence” embracing cognitive, synthesis, creative, ethical, and empathetic intelligence attempting to draw the very notion of what it is to be human into the intelligence profile.
I would strongly argue that determining the most effective workforce for any organization to ensure that both the strategic intention of the company and the corporate culture are aligned requires determining the various human characteristics to ensure people add to the mix rather than corrupt it.
There is no magic formula to achieve the right mix, however, there are 4 basic foundations that a leader must aspire to, to achieve the greatest outcomes.
- Understand what you stand for and allow those values to be your north star.
- Appreciate others and learn to listen and understand their needs and aspirations as you formulate your strategic goals.
- Simplify the complex and allow the “story” to empower the team.
- And above all be humble and appreciate that “the wiser you are the less you know”.