For the past couple of months I’ve had the pleasure editing and writing a set of pages for Business Spectator under the theme of Paths to Advantage. While the pages are sponsored by IBM, I’ve had free reign to speak to anyone, about anything, provided it is in relation to the concept of business transformation.
My view is that transformation is essential within Australian businesses if they wish to still be around in 2050. Its is fairly evident that the way many businesses operate and the services/products they offer will look very different by then, and it may take more than just gradual change to get them there – especially when the likes of an Amazon or Uber pops up to disrupt their market.
But where do they start?
So when kicking the series off, I had the chance to dive into one of the topics I’m most fascinated by – business culture – and the extent to which it drives or retards business transformation.
Peter Drucker nailed it when he wrote ‘culture eats strategy for breakfast’. What became clear in speaking to people for this article was that if the culture is wrong, it doesn’t matter how good the strategy is – the right people won’t get behind it, and it won’t happen. Its like the mission statement that everyone recites and no one believes.
Hence in writing this story, I examined the cultural factors that can lead to a successful business transformation. You can read the results by clicking here, but based on the many conversations required to research this story, my summary is this:
It all starts with a goal. That goal need only be partly defined – being too prescriptive upfront limits the eventual possibilities.
Strategy is important, but can only succeed if the culture is right. The best cultures emphasise cross-functional collaboration.
Culture is the product of behaviour. If management wishes to influence culture, it must behave in accordance with the culture it is trying to create.
Behaviour is driven by incentive. Rewarding people for the wrong behaviour will generate the wrong culture. This usually means rewarding people against new metrics such as customer satisfaction, rather than just sales growth.
Incentive is set through management. Therefor management must understand what behaviours to reward in accordance with its goal.
Get all of those things right, and transformation just might be possible.