12. Key Decisions and Everyday Business—Extending Tangible Culture Into the Operational Parts of Your Business
Chapter Contents
Building an Entrepreneurial or Start-Up Venture
Testing a Vision or Future-State Definition
Selecting and Implementing Best Practices
Selecting and Implementing Technology
Hiring Practices (and the Flip Side, Job Search)
Overview
This chapter briefly applies Business Practices, Right vs. Right, and Outcome Narratives to several “regular” business settings. You may want to quickly scan the topics and select those most relevant to your current needs, and refer back in the future to address additional ones. Also, visit www.almaden.ibm.com/tangibleculture to download Tangible Culture tools and templates.
Introduction
This chapter demonstrates the flexibility of the Tangible Culture concepts to various business situations. In each situation, culture is relevant, and there are creative ways to gain the benefits of Business Practices, Right vs. Right, and Outcome Narratives.
Evaluating Strategic Options
Evaluating and selecting strategies is an important senior leader activity. Not all strategies will succeed—nor will they be equally easy to execute. Good ideas are not worth much without good execution, and culture can get in the way.
For example, many regulated companies have found the need to shift their cultures to move into competitive markets, and have found that some strategies seem to “fit” better than others. Other companies have selected a strategy only to find that their organization could not “pull it off” after much money and time had been wasted.
As mentioned earlier, Business Practices are a handy surrogate for the topic of culture. With good alignment, the Business Practices will help propel the strategy. With poor alignment, the Business Practices will fight against strategy and cause execution issues.
Considering current Business Practices during strategy development can drive better strategy decisions and enhance designs and plans for executing the chosen strategy.
Here are some ways to include Business Practices in the strategy process:
1. Identify operational requirements needed to drive the strategy’s success. For example:
This strategy will require us to make rapid decisions.
This strategy will require effective collaboration across the extended enterprise network.
This strategy will require us to quickly and effectively consolidate our cross-organizational capabilities to respond to customers.
2. Compare the operational requirements to current Business Practices (see Chapter 6, “The Unseen Hand That Propels Organizational Action—Business Practices”) and determine the degree of alignment. For example:
We can make fast decisions, but not in cross-unit situations because everyone wants a say.
We are fairly good at internal “crisis” collaboration, but we need to be better at it on a daily basis and need to learn to better collaborate with our partners.
We have been successful at responding to customers cross-organizationally, but we cannot be sure we can do it as quickly as this strategy will require.
3. Determine the best options for dealing with disconnects. For example:
Select the strategic option that best aligns with current Business Practices (as long as important benefits are not lost).
Make modifications to the chosen strategy to align it better with existing Business Practices.
Identify necessary changes to Business Practices to execute the strategy.
4. Ensure the work plan and timeline include the needed steps to modify the strategy and/or Business Practices. See Chapters 8 through 11 (“Mergers and Acquisitions—Managing the Common Sources of Culture Clash,” “Alliances—Finding Ways to Leverage Your Collective Capabilities,” “Major Restructuring—Gaining Sustained Value From Your Reorganization,” and “Major Transformation—Addressing Your Plan’s Hidden Barrier,” respectively) for additional insights depending on the nature of the strategy.
5. Ensure the business case reflects the cultural realities and work required.
Careful consideration of strategic options and their alignment with existing Business Practices will help companies to
Improve their strategy selection decisions.
Identify needed actions to align the strategy and culture for effectiveness.
Consciously focus on execution, along with the needed decisions and actions.
Identify and mitigate culture risks before they become issues.
Building an Entrepreneurial or Start-Up Venture
In the early days of an exciting new venture, there are so many things to do. Everything needs to get going—and fast. Consequently, it is hard to give thought to what will happen down the road. Before you know it, your organization has its own habits, or Business Practices. Some may have been planned, but many have simply “happened.”
As a small organization grows, changes are inevitable. Organizations often find themselves at key transition points without having given these transitions much forethought. Examples are growing so large that professional management is needed, going public, and sale of the venture. For separate corporate “skunk works” ventures, a key transition is often the reintegration into the host company.
Along with transition comes risk. For instance:
Customers, speed of execution, and business value may be lost as the organization focuses internally to make needed changes that have not been planned beforehand.
Employees may perceive the required changes negatively, which may impact their motivation and productivity and lead to retention issues.
Some beneficial options may not be available to the company because it simply is not ready for them.
Simply letting Business Practices “happen” or evolve on their own is risky because it can lead to issues and bigger changes later. Instead, we offer a few suggestions:
1. Consider the end state, or a long-term future state, for your venture.
Do you want to grow and eventually engage professional management, or keep the business small so that the current management team can run it?
When and how do you plan to exit the business?
Do you plan to go public or sell the business?
Will the venture be integrated back into the owning organization?
2. Target and adopt the Business Practices that will best enable the end state and cause the fewest changes at likely transition points. Table 12-1 includes some questions to ask.
Table 12-1. Business Practices Questions
3. Use the Right vs. Right approach (see Chapter 5, “The Good Thing That Can Cause Big Trouble—Right vs. Right”) to work through any difficult options that surface. See Table 12-2 for examples.
Table 12-2. Example Right vs. Rights
4. Develop Outcome Narratives to clarify and communicate the desired changes (see Chapter 4, “How to Get to the Right Place the Right Way—Outcome Narratives”).
Note that these decisions may lead the organization to restructure and/or transform. If so, consult Chapters 10 and 11.
A planned approach to likely transition points will result in the following:
Best possible business value for your IPO or sale
Retention of the key talent needed to continue providing value
Reduction in the organizational “trauma” and loss of productivity associated with significant changes during key transition points
Testing a Vision or Future-State Definition
Many companies roll out changes before they are ready—before the vision is really clear. When this happens, delays, inconsistencies, rework, and frustration result—even though the clarifications could have been easy to make earlier in the process.
Outcome Narratives can help because they target problems—an often neglected area in visioning. If a project team can develop answers to the vision’s inherent difficulties, the vision is ready. If the team cannot develop answers, it is risky and wasteful to deploy the vision out to many people who will need to handle those problems real time. Here are some steps:
1. When you think your vision is clear, yet before it is communicated broadly, identify some problem situations that are likely to occur.
2. Convene an effort to create Outcome Narratives for the problem situations (see Chapter 4). Here are some approaches:
Ask individuals to draft Outcome Narrative answers, and then hold a facilitated discussion of similarities and differences.
Send the Outcome Narrative format with problem situations listed and ask individuals to submit their thoughts, and then compile and evaluate the responses.
3. Evaluate agreement and disagreement. Disagreements may be due to the following:
Unreconciled Right vs. Rights—conflicting options assumed by different members of the project team.
Resistance to the implications and desire to avoid difficult changes.
4. Determine answers to handle the surfaced issues.
Note that it is unwise to deploy with unreconciled Right vs. Rights. If the project team cannot agree, it is not likely that many more people will find agreeing easier!
5. Use the Outcome Narrative information for communications.
Project visions can cause many issues when rolled out before ready. Using the Outcome Narrative format can help to
Gauge the readiness of the vision for rollout.
Identify specific issues that need to be resolved.
Provide information for communicating additional details about the vision.
Selecting and Implementing Best Practices
Many companies seek to implement best practices: practices that bring value to others. Although our term Business Practices and best practices share an obvious commonality—the word practices—they are more different than it may appear. Best practices often refer to what a company uses to achieve a particular business objective (for example, processes, procedures, approaches, systems). Business Practices refer to how people do and use these things—subtleties that are less likely to be included in the specific best practices.
Best practices are only “best” in a context that enables them to work effectively—and context includes the Business Practices that tell people how to execute the work. In fact, “best practices” can be “worst practices” in an environment not well suited to them. Pascale and Sternin call best practices a “foreign import,” and then go on to say “they suffer a dismal replication rate.” Ouch!
When considering best practices from other companies, be sure to think about your own Business Practices and how they will support or collide with them. Here are some ideas:
1. Identify best practices and associated Business Practices (see Chapter 6). For instance, ask the following:
How closely must the associated processes be followed for success?
How and where should employees be given latitude?
What operating decisions are we likely to encounter? How are they best made?
2. Compare the associated Business Practices to your current Business Practices and your expected outcomes:
What aspects of this best practice will support your objectives (for example, cost reduction, cycle-time reduction, and quality improvements)?
How well suited is your environment to the associated Business Practices?
Where disconnects exist, how significant are they?
3. Explore the implementation options:
Implement some/all of the best practices as is because there is good alignment with the associated Business Practices.
Modify some/all of the best practices, perhaps with help from experts, to conform most readily to your current Business Practices. (Although this approach may impact some benefits, it will address some key risks and help speed the implementation.)
Implement some/all of the best practices, and design an effort to adopt the associated Business Practices. (Recognize that changing Business Practices may require many of the steps identified in Chapter 11.)
Abandon the effort.
4. Capture the learnings for future best practices efforts.
Thoughtful, deliberate decisions and plans are necessary to benefit from best practices because they have been designed for another company. It is important to know how well they “fit” to know what benefit they can drive. Companies that probe on the associated Business Practices, and other elements of the context, will
Make better decisions on the front end, before investments are made.
Set realistic expectations of the benefits that can be achieved.
Develop thorough work plans and understand the effort required to implement the best practices effectively.
Selecting and Implementing Technology
Many steps are needed for successful technology implementation—both software and hardware—and many are not about the technology itself. For instance, business processes often need to be tailored, roles and responsibilities may need revision, operational measures may require updates, and employees need to be prepared to perform work in a new way.
Companies have options in selecting technologies, and many base these decisions on cost. Looking at technology cost alone, however, can lead to more challenging implementation and an expensive end state. Why? Some technologies “fit” a company less well than others and will require more changes to get everything to work together.
Asking questions about Business Practices (see Chapter 6) can enhance the decision and implementation process. For instance:
1. Ask about the inherent or assumed Business Practices underlying the technology.
Does the technology require employees to have certain authorities to make decisions or take action?
Does it allow managers their preferred level of review?
Does it assume employees will input data on a specific frequency?
Does it enable the company’s preferences and requirements (for example, ability to work across organizational boundaries, rapidly launch internal “experiments,” or specify domain dependent attributes)?
2. Identify where the technology is installed and working well.
What Business Practices do these companies use that help the technology to work well?
How do these Business Practices compare to yours?
Do these differences imply that you need to alter your Business Practices or the technology to get good alignment and an effective implementation?
Will the technology require leading technical expertise and adaptability?
3. Select the technology best suited to your current Business Practices, unless you need certain capabilities and are willing to undergo a bigger transition to get them.
What specific tradeoffs you are making? Are they one time or ongoing?
If Business Practices need to change, which ones? What needs to be done to plan and execute these Business Practice changes on the same schedule?
4. Clarify new expectations through Outcome Narratives (see Chapter 4).
Use Outcome Narratives to communicate expectations and as job aids.
Use Outcome Narratives for a gap assessment if Business Practices need to change (see Chapter 11).
Due diligence about associated Business Practices can help companies make effective technology decisions. The preceding steps help companies to
Choose technology solutions that can be implemented most quickly and easily.
Avoid some key implementation risks.
Avoid many misalignments in “fit” that can lead to long-term productivity issues and more costly post-implementation operating environments.
Measuring Performance
Measurement is vital, and there is much published on the topic. Supposedly “what gets measured gets done,” yet many companies are disappointed with their results—they are not seeing the focus and changes they want. Some of the issues are found in the context in which the measures are used. This context is vast and includes communications, incentives, rewards and recognition, leadership style, subtle and implicit prioritizations and other messages, vertical and horizontal alignment—and Business Practices.
Some of the Business Practices surrounding organizational performance measures include the following:
How the measures are used to manage the business (for example, monitor, justify, predict) and employee performance
How the measures are identified and defined, and targets established
How often the measures are used and modified
How consequences (that is, rewards and corrections) are matched to them
Consider how the Business Practices in Table 12-3 might impact performance and motivation.
Table 12-3. Performance Measurement Business Practices
These are just the “tip of the iceberg.” Multiply these kinds of effects across the organizational, group/team, individual, process, and operational measures needed to run a business, and you can see how significant and far-reaching the differences may be.
We’ll take this notion one step further to crossing national boundaries where measures can be interpreted differently, leading to divergent responses. For instance, a target for a certain percentage of college hires may be interpreted as guidance in one country, and a no-exceptions policy in another, depending on local Business Practices. These kinds of misunderstandings can aggravate cross-boundary relationships and impact results.
Here are some suggestions for enhancing measurement results:
1. Identify some key measurement Business Practices (see Chapter 6).
Who is involved in setting measures and targets? Who is not involved and why?
How are priorities included and communicated in the measurement process? How are new focus areas included?
How are measures integrated into “regular” work? How are the measures integrated with other relevant enablers (for example, incentives, rewards, recognition)?
How closely are employees expected to focus on their official measures?
How are problems (for example, performance shortfalls) addressed?
2. Assess how well your Business Practices reinforce your business priorities.
3. Identify changes to improve performance and motivation. For example:
Consider changing the people who are involved in setting measures and targets (for example, including lower-level employees to build commitment).
Identify your business priorities and find additional ways to reinforce them (for example, special communications or recognition).
Identify ways to integrate measures into “regular” work (for example, standing topics on meeting agendas, “how are we doing?” checkpoints).
4. Consider whether Right vs. Right (see Chapter 5) could help you with options:
Should measures focus on the company or business unit results, or a combination?
Should performance evaluations for bonuses be based on team or individual performance, or a combination?
Should we focus only on objective measurements, or are subjective ones acceptable for some areas?
5. Consider whether Outcome Narratives (see Chapter 4) are needed to surface gaps, or communicate your expectations.
Recognize that Outcome Narratives can clarify behaviors you want and identify if you inadvertently motivated something undesirable.
Tangible Culture concepts applied to measures can
Ensure that Business Practices and measures are working together to support and drive priorities.
Identify ways to systemically reinforce your priorities.
Pinpoint areas where changes may help drive better results from your measures.
Hiring Practices (and the Flip Side, Job Search)
Selecting the best applicant from internal and external job candidates is important. Knowledge and skills are obvious areas to probe, and many companies focus there and leave “fit” up to chance. However, “fit” is often just as important to an applicant’s success—and sometimes even more so.
When companies want change, they often hire experienced people—all of whom come with expertise and habits (that is, Business Practices). “Fit” can be especially challenging when the new hire is a leader. Both the company and individual may need to change—and, if so, discomfort is likely along the way.
In an extended enterprise, global business world, selecting the “right” person is critical. Which candidate will work best with our alliance partners? Which candidate understands the local market and will properly balance that with the needs of the enterprise?
Business Practices can help a company to communicate its culture. They are also a way for candidates to probe and further understand the organization.
Here are some suggestions for the hiring process:
1. Identify factors that have led to previous new hires’ successes and failures.
Which Business Practices (see Chapter 6) were most difficult for new employees to understand and perform? Which were easiest to understand and perform?
Were any Business Practices surprising to new hires after they started?
Were any Business Practices frustrating to new hires? If so, which ones?
What extended enterprise and global Business Practices will the candidate need to understand and handle?
2. Identify an approach to communicate, and/or explore, important Business Practices during the interview. Table 12-4 shows some examples.
Table 12-4. Incorporating Business Practices into Interviews
3. Consider using Outcome Narratives (see Chapter 4) to probe on the applicant’s natural instincts and how well they connect with your expectations. For instance:
“As the Accountant, you’ve been asked to book a transaction, yet you have questions. You’ve requested and received additional information, but it is confusing and vague. You’ve consulted the Financial Analyst, and she supports the person making the request, saying that it is confusing but proper given authority levels. You still aren’t comfortable. What would you do?”
After hearing the answer, it may be appropriate to show him or her the Outcome Narrative and ask: How does this compare with your previous experiences? How comfortable would you be with this expectation?
Finally, be cognizant that new employees will adopt the Business Practices of the existing workforce. When demand is up, people may cut corners to get the work done, which erodes quality (Oliva and Sterman) and may even establish some new, less effective Business Practices. These are times to reinforce your expectations—and perhaps to support your current workforce with contractors, paid overtime, extra vacation banks, and so forth. This is even more important if you are trying to change the culture at the same time!
Because the hiring process is a two-way street, here are some ideas for job applicants to better understand the company and its culture:
1. Research the company’s stated values and priorities.
2. Develop some questions to better understand those values and priorities, and the associated Business Practices:
I read that one of your values is Respect for the Individual. What are some ways that employees incorporate this value into their daily work?
When you cannot do them all, which tends to win: cost, quality or schedule?
How do you prefer to make decisions?
When confronted with a difficulty, should I work it through myself, seek help from co-workers, or escalate to my manager?
3. Consider the questions you have identified and think through your own preferences and working style before the interview. It will help you to evaluate what you are hearing and how comfortable you will be in that environment.
An effective two-way discussion is important during the hiring process to help the company and candidate ensure a good “fit”—which is essential for a good long-term relationship. Business Practices and Outcome Narratives can be help in several ways:
The lens of Business Practices can help both interviewer and candidate identify questions to ask and information to provide to better understand each other.
Business Practices enable the discussion to go beyond knowledge and skills into how well the candidate will “fit” with the business’ expectations.
Outcome Narratives can help the interviewer objectively evaluate a candidate’s answers against what is expected.
Operating Globally
Today, few companies operate only within their own country. Even small ventures have websites that enable transactions all over the globe. For many, this means knowing how to navigate import and export laws and shipping requirements. For others, extensive business operations need to be conducted daily with those residing in other countries.
Operating globally means language and time zone complexities, exchange rate and regulatory variations, and differences in how people work, interact with each other, and perceive situations, just to name a few. The differences must be navigated within the context of business objectives. Think for a moment about the culture differences between companies with these goals:
We operate domestically, but have suppliers from many countries.
We operate domestically, but need to enable our customers who are highly influenced by the global market.
We compete by region and need our marketing, channels and suppliers to reflect the preferences in those global regions.
We operate with one brand, one voice, and one way of working globally.
These areas are complex now and likely to get more complex according to the GLOBE study. “The increasing connection among countries, and the globalization of corporations, does not mean that cultural differences are disappearing or diminishing. On the contrary, as economic borders come down, cultural barriers could go up, thus presenting new challenges and opportunities in business. When cultures come into contact, they may converge on some aspects, but their idiosyncrasies will likely amplify.” (House et al.)
Many books are available on cross-boundary business, so we do not discuss the details in depth. However, Tangible Culture is a supplement to these sources for several reasons.
First, Business Practices (see Chapter 6) are certainly relevant. They are shaped by many factors, including local regulatory requirements, business customs, interpersonal norms, and other cultural and national expectations. Companies will see differences in Business Practices as they deal with customers, suppliers, and partners from other countries—as well as internal groups/employees in other parts of the world. For example, discussions may be more or less open based on whether leaders are present; approval schedules may require time for private discussion and debate; and protocols and expectations will determine whether customers deem face-time to be intrusive or necessary. Hofstede, Trompenaars, Hampden-Turner, and Adler are good references on these ideas.
Further, Business Practices considered proper in one country can be violations of proper business conduct—and even the law—in other countries. For instance, suppose a company is nearing a bidding process, and one of its leaders accepts a bidder’s invitation to attend a special event (for example, sports game in a private box or special dinner). Other bidders may see it, assume the leader intends to give preferential treatment, and withdraw. Even if the actions were proper and taken with a clear conscience, the process may have been compromised and a violation (for example, against single bid tenders) created. With cross-boundary Business Practices, often the appearance of impropriety is too close to actual impropriety, and this must be interpreted within the countries’ cultural contexts.
Second, Right vs. Right (see Chapter 5) becomes even more interesting across borders because more discussion may be needed to understand why the options are valid, let alone right. “Different cultural orientations and views of the world are not right or wrong—they are just different. It is all too easy to be judgmental and distrust those who give different meaning to their world from the meaning you give to yours. Thus the next step is to respect these differences and accept the right of others to interpret the world in the way they have chosen. Respect is easiest when we recognize that all cultural differences are in ourselves. We don’t see the world as it is, only as we are. It is as though we are wearing cultural glasses all the time. And the lenses another person wears are different to yours.” (Trompenaars and Woolliams)
Third, Right vs. Right may be needed for new decision areas, especially in large, global enterprises. For instance, it is often more difficult to manage duplicate effort globally. Should the company try to prevent duplication (through costly supervision) or allow duplications and differences between countries (and live with reduced efficiencies)? Is it okay to let each geography build its own assets, which may encourage competition, or should the company attempt to manage its assets globally?
Finally, many companies find that different answers are appropriate in different countries. Sometimes it is due to national culture and peoples’ preferences, and sometimes due to regulatory requirements. It is often not possible to develop answers that apply equally well everywhere, and Outcome Narratives (see Chapter 4) can help.
To address these points, here are some actions to take:
1. Educate personnel on the topics of Business Practices and Right vs. Right. Simply understanding these concepts and using the terminology can improve communications.
2. Design opportunities for people to share their views and listen to other views.
One workshop exercise is to separate people into groups by geography, function, etc., then give them problem situations and ask them to
• Identify their preferred answers—perhaps using the Outcome Narrative format (for example, desired outcome, in-scope roles, role behaviors and actions).
• Identify the answer they think the other group prefers.
• Compare their answers.
• Discuss similarities, differences, perceptions, and implications.
3. Clarify important expectations using Outcome Narratives.
Assign countries or geographies to develop Outcome Narratives—identifying answers that will work well within that country or geography. (Consider whether Outcome Narratives should be written at the global level, then countries or geographies given specific latitudes to modify them.)
Provide a forum for sharing similarities and differences and why they are appropriate, which can build better cross-border understanding.
Note that often companies think about global implications during a restructure or transformation effort. If so, Chapters 10 and 11 may be helpful.
Enabling employees to explore global differences through the lenses of Business Practices, Right vs. Right, and Outcome Narratives can help to
Create better cross-border understanding and give employees terminology and ways to discuss differences and similarities.
Provide ways to talk more effectively with customers, suppliers, and partners about differences and how to handle them for mutual benefit.
Enable a company to drive toward global consistency while ensuring local requirements and preferences are adequately addressed.
Conclusion
In most business situations, culture is a consideration—and often an important one. Applying Business Practices, Right vs. Right, and Outcome Narratives can improve outcomes. Our hope is, someday, people will recognize and consider Business Practices as readily as they do business processes today. (Many of us “old timers” remember when business people did not talk about processes—way back in the late l980s!) We also hope Right vs. Right will help people constructively address the conflicts they face, and that Outcome Narratives will help clarify and communicate expectations.
Now let’s move on to a few brief demonstrations of Tangible Culture in action.
References
Adler, N. J. International Dimensions of Organizational Behavior. Cincinnati: SouthWestern College Pub, 2001.
Earley, P. C., and E. Mosakowski. “Cultural Intelligence,” Harvard Business Review, October 2004.
Hofstede, G. Culture’s Consequences: Comparing Values, Behaviors, Institutions and Organizations Across Nations. Thousand Oaks, CA: Sage Publications, 2003.
House, R. J., P. J. Hanges, M. Javidan, P. W. Dorfman, and V. Gupta (Eds). Culture, Leadership, and Organizations: The GLOBE Study of 62 Societies. Thousand Oaks, CA: Sage Publications, 2004, p. 5.
Oliva, R., and J. Sterman. “Cutting Corners and Working Overtime: Quality Erosion in the Service Industry,” Management Science, Vol. 45, No. 7, July 2001, pp. 894–914.
Pascale, R. T., and J. Sternin. “Your Company’s Secret Change Agents,” Harvard Business Review, May 2005, p. 79.
Trompenaars, F., and C. Hampden-Turner. Riding the Waves of Culture: Understanding Cultural Diversity in Global Business. New York: McGraw-Hill, 1998.
Trompenaars, F., and P. Woolliams. Business Across Cultures. West Sussex, England: Capstone Publishing, 2003, p. 28.