How did the Greeks and Romans manage to conquer such large territories? And what led to Spain, Britain and the Netherlands to colonising such large parts of the world so far away? The answer: a ‘winning’ culture shares a vision that is sufficiently challenging to enable the advancement and development of technologies, techniques and tactics (e.g. transportation, military technology / tactics, entrepreneurship, financial innovation), so they can turn their ambitions into a reality. These principles determine whether or not an organisation will succeed or be doomed to failure.
The same values and convictions
What drives your organisation forward is its DNA. Strong corporate DNA is the foundation for sustainable profit growth Corporate DNA is the core of what a business stands for, the reason it exists, and the way it achieves its objectives.
The corporate DNA shares values, beliefs and consequent behaviours that remain consistent and are not questioned, with strategies and tactics being adapted over time in response to changing market conditions. So make sure your organisation’s DNA is communicated clearly and explicitly, and avoid dilution over time. It pays dividends in the long run.
Open for change
Companies with a strong and sound corporate DNA are flexible organisations that are always learning. They are open to change and don’t see this change as a threat but as an evolution. All employees understand and support the strategy and work together to implement it.
Organisations with strong corporate DNA are better equipped to combat bureaucratic inefficiency and time wasted through fruitless internal discussions. This gives an organisation the space it needs to implement its long term strategy, and devote all its energy to performing: maximising turnover for the lowest possible cost, and focusing on the people that matter.
Strong DNA also benefits recruitment. Companies often look for clones of best-performing employees who they think will be productive in the least possible time. But this approach doesn’t guarantee employees will actually be a good match for your organisation. It’s also true that training new employees in technical or industry-based skills is much easier than changing their beliefs, let alone changing the values that underpin their behaviour.
DNA-compatible employees are highly committed and motivated. They act in line with expectations, rendering lots of procedures and bureaucracy redundant. DNA-based recruitment will also prevent your existing employees from becoming demotivated.
Update corporate culture for better performance
If you want to introduce a corporate culture like this, ask yourself the following questions:
- Is our corporate DNA clear and accurate, and is it commonly referred to in day-to-day operations?
- Do we have room to simplify bureaucracy and procedures?
- Can we speed up decision-making processes and implementation?
If the answer to these questions is yes, you are ready for change.
The crisis has been dragging on for five years now, six years in some sectors. The situation is slowly starting to improve, but we’re not there yet. Lots of companies are getting to the ends of their reserves, mental fortitude is wearing thin, and belief in better times ahead is made more difficult by governments doing too little to improve the business climate. So we will have to weather the storm ourselves.
But times of crisis make us uncertain, and uncertainty makes people more cost-conscious, which in turn leads to more control and so also more overheads. Management boards have to realize that control affects employees’ levels of involvement and commitment, and so also their motivation. Control results in people having to spend more hours achieving the same result. Add to this the added pressure that times of crisis put on prices, and it becomes clear to see why even more work is required to generate the same turnover as before.
Basically, employees are put under too much pressure. They work more hours for the same pay, perhaps become less motivated, and might even fear losing their job. The result: all this uncertainty means people get stuck in a relentless cycle that doesn’t give them anything other than too much stress.
Better results from working less
Let’s think in a cost-conscious way. Get rid of all the excessive control in unnecessary layers of management; it’s better to create an environment in which employees’ levels of involvement and commitment can grow. This will lead to improved performance and a better working atmosphere. Stimulating employees’ involvement helps companies achieve better results at lower costs with fewer working hours and less stress. Give employees the space to balance their skills and responsibilities. Stability is a key factor here: avoid lurching from unnecessary costs in good times to big savings in times of crisis.
Five fruitful crisis measures:
- Clearly communicate challenges and corresponding solutions;
- Create an environment in which everyone shares everything, including mistakes, so people can find solutions together;
- Ask groups of employees to develop proposals for cost optimizations that do not threaten the business impact;
- Stimulate ideas that help increase your services’ impact on clients;
- Don’t lose yourself in excessive bureaucracy or complex procedures.
Despite all the available books and training courses on empowerment, motivation, stress and delegation, too many organizations are compelling their managers to exert extensive control. This is well-intentioned, but it just serves to aggravate the effects of the crisis by putting more pressure on managers to control employees at all levels. It results in more work in the form of extra reports, and management teams spend more time attending meetings. They think they are gaining control by following employees’ emails in cc when in fact this traffic is actually just taking up more of their time. So stop the crisis for yourself by limiting the levels of control to a minimum, and focus on developing your strengths.
Are we on the right track with endless discussions about how to help industry recover?
Business people and trade organizations are focussing on the cost of labour. But that in itself isn’t a solution. Is it better to buy a BMW in China than a Renault because of Germany’s more beneficial labour costs compared to France’s? It’s true that the cost of labour is too high here in Belgium, but if we think that this is the sole root of problem, we are simply being dishonest with ourselves.
Politicians shout loudly calling for more innovation. And Belgium does indeed score badly when it comes to investing in R&D, but there isn’t always a direct link between levels of investment and quality of innovation. I’ve been in contact with technology companies at home and abroad for over 20 years, and it’s clear that Belgian engineers score very highly in their specialist domains when it comes to productivity and creativity.
Furthermore, too much focus on product innovation results in a rat race in which having the lead is now less important with insufficient financial gains. No single company can keep on winning this race. Option NV couldn’t maintain its lead over Chinese companies. And Barco had the same problem over multiple technology cycles, which current CEO, Eric Van Zele, recognized as soon as he took up his role.
Companies can only profit from the raising of R&D stakes by avoiding the battle as much as possible and packaging technology in solutions that the market wants. Because the more product maturity grows, the more the market demands a better package. Most clients aren’t looking for the latest products; they buy the product that creates the most value for them.
This means that skills other than just innovation from R&D departments are required. Understanding customers and the environment is crucial for delivering value. A value-driven approach gives products longer lifecycles so they can remain competitive with large volumes. This improves the financial leverage of investments, increases profits, and enables a company to finance its further expansion. Not ‘time to market’ but ‘on time to market’ is the motto.
You are ready to work on this sustainable growth when your product innovations reinforce the added value that your client perceives (because otherwise you are only innovating in order to beat your competitors in the technology rat race). Clients are then prepared to pay more for your strengths. This is possible when your R&D personnel have enough contact with clients to really understand how and why your products are used. When your sales and marketing activities no longer focus just on the product, but also on creating added value. And when you organize your entire company in such a way that everyone is focussing on clients and the market.
There was one subject that kept coming up for discussion in various talks at our recent VOV fair. Local branches of multinationals are given a vision with a number of central themes, but we don’t always know how best to deal with them. Many people have practical plans for implementing conceptual values in a pragmatic way, but value decisions are not always paid sufficient attention when they’re made 10,000km away.
Nonetheless, entire organizations benefit from sharing general company values, because they enable everyone to work towards the same goals, and employees’ engagement with the company increases because they feel more involved. It’s also important for directors to fully implement values and ensure they are in line with employee activities for the business strategy to be executed successfully.
So when you receive a video call from Seoul, for example, saying there needs to be more passion in 2014, or a greater eye for detail or something, how do you deal with it?
- Make the values specific for each department and role in your organization. What does passion mean for your technical aftersales department? What does XYZ mean for the processing of supplier invoices? Find, together with the management team, the concrete ways that employees benefit from the values.
- Continue to communicate the values throughout the year and use all existing internal communication resources for feedback and evaluation. Be specific with your values: how you need to apply them in specific situations, where a mistake was actually made, what was the outcome, who was affected, and what were personal successes.
- Include the values in all forms of evaluation to assess how they affect employees.
As organizations grow, their activities are divided logically across departments that each have their own head of department. The heads of department have to ensure maximum performance, and the senior management has a clear view of who they can talk to about which subjects. The people responsible within the department bring clarity and calm. And if everything’s going well, the senior management will ensure sufficient coherency between the departments.
Unfortunately this type of organization has a tendency to become derailed. In practice, the heads of department are not adequately stimulated to constantly look at the bigger picture. Their objectives are aimed too much at their own department and the result is they end up building silos – working methods that are not beneficial for other departments are not necessarily adapted. A matrix structure can help rescue this situation, but it just feels like a bureaucracy.
Competition between departments is the norm within a silo structure. Signals are no longer picked up or used sufficiently in a turf war. And if customers stay away, it’s because the sales department is not doing its job properly. And if no visitors are coming to the stall, it’s because the marketing department is not doing its job properly. And if we can’t find good people, it’s because the HR department is not doing its job properly.
In this situation, only silo busting can rescue you. Breaking up these silos with projects can be a good start. A project looking at customer satisfaction goes further than the restrictive marketing walls. Engineers can put together a multidisciplinary team for product innovation. The entire management team is made partially responsible for the company’s employer branding.
Projects such as this are not sufficient in the long term; they just stem the bleeding for a while. To really break out of the silos in a sustainable way, the mentality of the management and the employees needs to change. Employees must gain an understanding of the company’s vision, mission and concrete objectives. They need to understand where colleagues are working from ‘over the wall’ This understanding leads to insights into their own contribution, and these insights lead to solutions that are good for the entire company and not just for a specific department. Company results improve and individual motivation increases.
You might still have to massage one issue away: The differences in performance between the departments will lessen, and a previously successful department manager can become less visible. So an ointment for dented egos can come in handy.