The power of culture

An executive looking for a distinctive competitive advantage doesn’t have to look too far. It’s all within the organization. The ability to create a working environment that facilitates desirable behavioral characteristics among the workforce is one of the most valuable skills a leader can bring to table. For the executive ready to move his or her company forward in a competitive marketplace, it’s all about creating a culture that guides a company in a strategically sound direction—and then leveraging it as a competitive weapon.

Leveraging the power of culture begins with creating an infrastructure that aligns culture with strategic goals. This means that an organization must evaluate the current culture to ensure that all policies and processes support strategic initiatives efficiently and effectively. The goal is create a lean infrastructure that allows an organization to create behavioral norms within the workplace that guide employee actions in a particular direction that is advantageous to the company.

The complexity with shaping workplace behaviors suggest that an executive team might want go beyond strategic alignment and make sure there is a reward system in place for behaviors that are in alignment with desirable actions. The power of culture is unmistakable—and we’ve seen companies such as Southwest Airlines(1) use culture as a competitive tool. At the same time, we’ve seen companies like as Enron(2) create a culture that contributed to its cataclysmic collapse. The key for the modern executive, therefore, is to recognize that an organization's culture can be used to his or her advantage. By creating a culture that supports strategic goals with the appropriate reward system, an organization is able to add a powerful ally in its quest to increase the company’s level of success and set itself apart from the competition.

1. Thompson, Arthur; Gamble, John; Southwest Airlines: Culture, Values, and Operating Practice
2. Lawrence, Anne; The Collapse of Enron

Innovation: How to rescue it from the abyss of bureaucracy

The largest companies in the world often suffocate innovation through multiple levels of unnecessary bureaucracy. As companies grow, structures are often put in place to standardize and streamline processes. The problem? The diversity of opinions and ideas that can spur innovation often get buried in a tangled web of red tape and office politics. In today’s competitive business environment, however, executives must create a multi-directional information infrastructure to open channels of communication in order to leverage the talents of a larger employee base.

Organizations with traditional hierarchies often forced information downward without providing opportunities to incorporate the insight and creativity of a larger resource base in the development of the organization’s corporate strategy. This means that organizations often failed to amalgamate “the collective intelligence and imagination of managers and employers throughout the company”(1) to provide the maxim benefit of a diverse workforce. With increased competition and changing conditions, companies must leverage the strengths of all persons in the organization through open communication channels.

Once the executive team understands that the collective talent of the organization is more powerful than the brains of the oligarchy, the team is able to foster a mindset that enables multidirectional communication. This starts with a culture that inspires employees to communicate upward with the same frequency that managers communicate downward. As the company expands its communication infrastructure, collaboration among executives, managers, and employees must occur horizontally as well. By facilitating communication in all directions, companies are able to develop a “more open-ended process of strategic discovery”(2) that can lead to increased communication and the opportunity to capitalize on the plethora of great ideas that are typically buried in the abyss of corporate bureaucracy.

Sources:
Hamel, Prahalad, Competing for the Future, (Page 26)
Hamel, Gary; Strategy as Revolution, Harvard Business Review (Page 11)