Maintain High Performance: Align Competitive Strategy with Your Company's Culture

Now, the supreme requirements of generalship are a clear perception, the harmony of his host, a profound strategy coupled with far-reaching plans, an understanding of the seasons, and an ability to examine the human factors.

Sun Tzu

The “harmony of his host” and “human factors” that Sun Tzu refers to are intrinsic qualities of an organization’s culture. They are the underpinnings that make the organization tick; qualities that put life into individuals’ actions. As such, corporate culture is defined by its deep-rooted traditions, morals, values, beliefs, and history that power the organization.

As the operating system and nerve center of your organization, culture forms the backbone of your business strategy. It shapes how your employees think and react when entangled in a variety of internal and external situations—from organizational shake-ups to aggressive rivals attacking your market position. Thus, corporate culture operates in a dynamic environment, one that is never static.

By moral influence I mean that which causes the people to be in harmony with their leaders, so that they will accompany them in life and unto death without fear of mortal peril.

Sun Tzu

Consequently, to be “in harmony with their leaders ... without fear of mortal peril” is essential (and admittedly hard to achieve) if you are to maintain a positive, forward-looking operating culture. In particular, that means maintaining believable and supportive relationships with your staff.

When CEO Thorsten Heins took over at Research In Motion (RIM, maker of the BlackBerryTM), he recognized the need for harmony during his high-stakes competitive encounters against the makers of iPhone® and Android devices. “The first thing you need to do with your employees is you’ve got to be open,” he declared. “Tell them where we are. They’re thinking it themselves anyways. But also, you have to get them excited about the future of Blackberry. I don’t like to be dictatorial, but if I have to, I can be. Right now at RIM, I’m a bit dictatorial.”

The essential point is that there is no generically good culture for all seasons, just as there is no one-size-fits-all strategy for all competitive confrontations. However, you can count on universal attributes, principles, and concepts that are anchored to a historical platform that are proven to sustain a competitively healthy corporate culture. Table 5.1 summarizes the primary ones.

In contrast, there are traits that characterize a sluggish and lethargic corporate culture. Such an organization closes its eyes to global competition, vacillates over the competitive impact of new technologies, focuses only on building market share in existing markets as it avoids pushing the boundaries of new markets, and is generally passive to evolving trends.

Other negative signs include a conscious disregard for making the corporate culture compatible with an erratic marketplace, with the result that the organization loses its edge, complacency spreads, customer focus declines, and originality dries up.

The contest of strength is not only a contest of military and economic power, but also a contest of human power and morale.

Mao Tse-tung

To operate successfully in a vibrant corporate culture means tuning in to the “human power” of your firm’s basic beliefs, moral codes, traditions, and standards of behavior. This approach will work for you as long as the foundations of your organization’s or business unit’s culture harmonize with the current competitive environment and your firm’s overall strategic goals.

Such harmony is illustrated by Netflix’s corporate culture, which is described as the freedom and responsibility culture. Management’s aim is to

TABLE 5.1

Qualities of High-Performing Corporate Cultures

Beliefs and Morals

Employee Treatment and Expectations

Organizational Structure

Leadership and Business Strategy

Vision and Managerial Competence

Total commitment to customer satisfaction

Fairness in enforcing discipline

Use of cross-functional teams to cultivate originality and innovation

Managers show skill in developing and implementing competitive strategies and tactics

Expertise in business planning

Openness to new ideas

Independence with an entrepreneurial outlook

Rapid internal communications through a flat organization

Maximum use of competitive intelligence

Vision to locate new and evolving market opportunities

Tolerance for employee diversity

Flexibility in encouraging personal growth

Speed of decision-making

Growth strategy aligned to corporate culture

Ability to nurture the health and vibrancy of the organization

Respect for individual achievement

Continuous learning

Mutually supportive internal relationships

Sensitivity to market changes

Aptitude to conceptualize and communicate a strategic direction

Ethical conduct

Motivated employees

Authority and responsibility at the field level

Focus on customer retention

Facility to convert vision to action

TABLE 5.1 (Continued)

Qualities of High-Performing Corporate Cultures

Beliefs and Morals

Employee Treatment and Expectations

Organizational Structure

Leadership and Business Strategy

Vision and Managerial Competence

Personal fulfillment

High morale and pride in the organization

Innovative products and services based on a blend of innovation and technology

Emphasis on high morale through competent leadership

Sensibility and diplomacy in developing and maintaining cooperative external relationships

Strengthen customer relationships as an ongoing corporate imperative Adhere to the rules and principles of competitive strategy

Exploit fresh opportunities with a bold and unified approach Encourage personal and professional growth

Respond rapidly to changing market conditions

employ responsible people who are self-motivating and self-disciplined. In turn, they are rewarded with freedom, so that little energy is spent on enforcing strict procedures, hours of work, or days of vacation. Instead, emphasis is placed on what gets done. At Netflix, freedom is further expressed by building a sense of responsibility among employees, whereby they are committed to grow the enterprise.

Therefore, aligning your business strategies with your corporate culture is precisely what will give your plan the singular quality of uniqueness. In practical day-to-day terms, synchronizing strategies with the corporate culture will directly impact the markets you focus on, the image you project in the marketplace, the products and services you deliver, and the competitors you are able to face up to successfully.

From a leadership and managerial viewpoint, if you know how to identify the power of your corporate culture, you will get an unmistakable signal whether your strategies can work under adverse competitive conditions. It also provides useful insights about the success or failure of your entire business plan.

The above points are summarized as follows:

  • • If you are a senior executive who consciously integrates business strategy with the organization’s culture, you are more likely to succeed.
  • • If you are a middle manager at the division, department, or productline level who knows how to write a business plan that builds on the subculture of your business unit, you are more likely to win.
  • • If you recognize that corporate culture envelops your entire organization, including the caliber of leadership, the vision that drives the business plan, the boldness or timidity of strategies, the commitment to customers’ needs and problems, and the care and treatment of employees, then you are more likely to succeed.
  • • If you do not internalize how the culture of the organization interweaves with today’s hotly contested markets and do not know how to align your strategies accordingly, the results can prove fatal.

The general who understands war is the minister of the people’s fate and

arbiter of the nation’s destiny.

Therefore, the enlightened ruler is prudent and ... is warned against rash

action. Thus, the state is kept secure and the army preserved.

Sun Tzu

 
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