Yesterday, I gave a lecture at the University of Monaco on Corporate Culture and how to build an Innovative Corporate Culture.
Quite clearly Innovation and Culture are two words that have as many meanings as there are people in this world. It is difficult to grasp the inherent something in the company. Also, in what way should the company be innovative? Does it really work for all types of organisations and industries?
Corporate culture is defined as the set of beliefs, traditions, and behavioural norms that determines “the way things are done around here”. By understanding the important norms and values it becomes easier to understand the existing culture, thus being able to change the culture and control the desired behaviour in the company. And what is then the desired behaviour?
Understanding what drives Innovation
The common approach to Innovative Culture is that it is created when you have a culture where;
1. Leadership champions and support change initiative.
2. There is an understanding of that individuals and organisations are all different.
3. The Management encourage learning and trying new things.
4. The Management Accept and encourage mistakes (as long as you learn from them).
5. The innovation culture is clearly articulated and communicated from the top down.
6. The change initiatives are linked to what matters most – the larger goals of the organisations. It is important that those in the organisation view improvement and innovation as approaches to move the organisation from where it is to where it wants to be. Sending this message generates more energy and enthusiasm than using improvement and innovation to fix problems. In other words, when the organisation has a future oriented perspective!
That is all well and good and can function as desired practices and values in the company. However, the important thing is not to stop at a vision of where or what the company should be. To truly create an innovative culture the managers has to be fully committed to change and develop an organisation that enables the vision and from there establish the desired culture that is aligned with the overall strategy, Talent Management strategy and Innovation strategy.
Taking the company from where it is to where it wants to be
When taking the company from where it is to where it wants to be it is important for the manager to take the following steps:
1. Define the vision, mission, and values for the company.
2. What is the competence needed to succeed with that vision?
3. How should the talents in the company be organised?
4. What processes should the company employ to give the talent a higher probability of succeeding?
5. What values, measures and rewards should the company have to motivate and encourage the employees?
For an example of a company who have succeeded with this I encourage you to read Tony Hsieh book about Zappos – ”Delivering happiness”. Tony Hsieh set out to reach $1bn in annual sales and get on the list of best companies to work for after 10 years. Zappos has attracted customers through its dedication to great service, and the company culture is designed to make service important and to “Deliver WOW through service.”
Zappos recruitment process involves two interviews – one to assess fit with the job and another to assess cultural fit with the company. All successful recruits had the same five-week training, including two weeks on the phones in the call-centre. Topics included the emphasis on customer service and the philosophy behind company culture. Everyone was offered $2,000 to quit as a test of enthusiasm.
Once candidates are hired, they will receive raises based only on skills tests and whether they meet uniform performance standards. Every element of Zappos employment is designed around corporate culture.
Less then ten years after Tony Hsieh joined Zappos they reached the goal of $1bn in gross sales and in 2009 Fortune magazine ranked Zappos 23rd on its list of the best companies to work for.
Define, understand and change
When the desired organisation and culture are established, and there is an understanding of the current culture and of why people behave the way they do, change can occur. To understand the culture, one should collect input from the members of the organisation and study the daily operations; who are the leaders and informal leaders? Why are things done the way they are done? Who are the role models and what aspects need to be changed?
This will then lead into the actual change process, which includes setting new goals, having top-management people become positive role models and setting the tone through their behaviour, involving the employees and preparing them for the process, and creating new stories, symbols, and rituals to replace the current.
Moreover, it requires selecting, promoting, and supporting employees who espouse the new values that are sought, redesigning socialization processes to align with the new values, changing the reward system to encourage acceptance of a new set of values, and replacing unwritten norms with formal rules and regulations that are tightly enforced.
The change process could also involve shaking up the current subcultures through transfers, job rotation, and in extremes terminations. Also, creating a climate with a high level of trust and feedback to enable employees to have the courage and confidence to try new thing (and sometimes fail).
“I view my role more as trying to set up an environment where the personalities, creativity and individuality of all the different employees come out and can shine. “ – Tony Hsieh