Corporate Culture and Performance

“The single most visible factor that distinguishes a successful culture from a failure… is competent leadership from the top.” —Corporate Culture and Performance

We are coming upon the 20 year anniversary of the publishing of John Kotter’s and James Heskett’s Corporate Culture and Performance. The lessons in this classic are timeless and particularly applicable for those who lead groups today. Rooted in research, Kotter and Heskett provide a blue-print of what to do to build an organization that can sustain strong performance. They also point out that it is not easy.

“Culture represents the interdependent set of values and ways of behaving that are common in a community and that tend to perpetuate themselves.” The performance engine of any company is their community of employees. Specifically, the books central message is that it is critical to build an Adaptive Culture, rather than a strong culture, to create long-term economic performance. Adaptive cultures expect and embrace change. To build the elusive adaptive culture, the authors offer the following:

Senior executives must display an uncommon combination of personal attributes and actions at the very top of a business. Internally, executives must be self-assured and willing to work for others. Externally, executives must exhibit discipline, confidence and humility. According to extensive research conducted by Kotter and Heskett, senior executives must also act to:

  • Create a sense of crisis and a need for change as they set a new direction
  • Communicate consistently and broadly
  • Display an “outsiders” propensity to embrace change and new ideas
  • Reinforce the importance of innovation
  • Build and maintain an “insiders” credibility
  • Institute a balanced focus on the success of customers, employees, and share owners
  • Establish leadership or the ability to produce change as an important focus at ALL levels
  • Decentralize decision-making where possible
  • Promote carefully and demote when necessary
  • Celebrate early success

At a time when so many of our private sector institutions are not performing well, we would all be well served to return to lessons contained in this leadership classic. The good news is that the paperback version of Corporate Culture and Performance was released earlier this year. Is that perfect timing? As a practitioner of the concepts included in this classic, I can assure you it is well worth the time.

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Great by Choice

On October 11th, Author Jim Collins released his fourth in a series of heavily researched books outlining “what it takes to build a great company,” titled Great by Choice with co-writer Morten Hansen. This particular book focuses on requirements for sustained growth in a business world characterized by uncertainty and chaos. The book also consciously builds on, but does not actively reference, the key lessons in the prior three books. The authors build a case that their conclusions complement the important learning offered in his earlier books. These include:

Built to Last – including a focus on the importance of Values

Good to Great – including a focus on the importance of Insight of Level 5 Leadership

How The Mighty Fall – including a focus on the intense Support required of leaders to Never Give In

In Great by Choice, the authors share the results of a nine-year research effort focused on determining those characteristics of companies that achieve superior and sustained performance in the most unpredictable of market conditions. Central among their findings are the importance of the connection between Discipline and Creativity as part of a concept the authors describe as 10X Leadership. “Of course, it is not discipline alone that makes greatness, but the combination of discipline and creativity. “(pg. 77)

As a total body of work, Collins four studies include a deep dive on a select group of 75 companies. As a resource, Collins’ books are invaluable. While certain themes (i.e. discipline) are woven throughout the four books, as a career academic, researcher and consultant Collins concludes that people can build a great company based on their actions and attributes…even in the most challenging of times. I think Collins is spot on.

Going forward, however, this blog will come from the view point of a career practitioner. I believe there is value in the insights and observations of a career business leader who has spent most of his time on the front line, accountable for results. Based on experience, at times I may disagree with parts of the research offered by others or I may offer a slightly different spin. At Choices & Success we APPLY the best of these concepts to drive results and resilience. From this perspective, I will offer a practitioner’s view of HOW Discipline, Insight, Support, Creativity, and Values can be implemented to drive sustained performance. The devil is in the details.

In Great by Choice, Collins offers the following summary of his research on building a great company: “Indeed, if there’s one overarching message arising from more than six thousand years of corporate history across all our research—studies that employ comparisons of great versus good in similar circumstances—it would be this: greatness is not the matter of circumstance; greatness is first and foremost a matter of conscious choice and discipline.

On that perspective, we agree 100%!

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