Why Culture Eats Strategy For Lunch
We are fast approaching a leadership tipping point. As the traditional top-down hierarchical corporate leadership model is coming under increasing pressure (lack of speed, flexibility, innovation, increasing challenges keeping the best & the brightest) a new corporate leadership culture is emerging that creates seemingly magic feats: fast growing companies staffed by fully bought-in team members who don’t even get the best salaries! What’s going on here?
The beginning of every major shift in human consciousness is marked by a moment of high tension: a small number of innovators have already changed heretofore immutable laws of the way things get done, while a vast majority of the players are still stuck in their old paradigms. Fully vested in their version of reality, the incumbents loudly protest the validity of their ways and point out a million reasons the untested innovators and their new ideas will fail.
This is the very thing happening at the moment in the corridors of many a corporate office: traditional managers and corporate leaders are scratching their heads, wondering how come they are having a hard time attracting and retaining excellent talent, innovating at market speed, etc. All this, while other companies are growing like mushrooms all around them, what is their secret recipe?
How The Corner Office Lost It’s Allure
Here is the good news: there is no secret recipe. There is just a deep insight on the part of innovative corporate leaders: in a time of total personal information and financial empowerment the old inducements for joining and remaining in a corporation don’t work anymore.
Initially the contract between BIG Co. and the individual employee stated that BIG Co. owned the means of financing, production, marketing and distribution. You, the individual player, could not possibly compete with that. This left you in the position of needing to join BIG Co., exchanging loyalty and hard work for steady income and, the ultimate inducement, a shot at working your way out of dull cubicle-land into glamorous corner-office stardom.
Technology has changed all that. Today a smart, self-driven player, can finance a great idea through crowd-funding (the designers of the Double Fine Adventure video game just raised U$ 3,3 million capital via kickstarter.com, giving them complete creative freedom), crowd-source great ideas and contributions (Local Motors crowd-designed and manufactured the Rally Fighter, a sell-out success of a super car, within 18 months) crowd-source innovative marketing campaigns (zooppa.com, 99 designs.com, geniusrocket.com) and eventually sell themselves directly to the end user (Lauren Luke broke new ground in the cosmetics industry selling her personal brand directly to her audience).
So no, you can’t attract self-empowered individuals with the emotionally immature old model of ‘play your cards right, toe the party line and you just might get the corner office’.
Of Money & Meaning
Large numbers of individuals are waking up to a new reality: money alone won’t make you happy. These individuals are looking for something very specific: a sense of personal fulfillment and contribution, of having made a difference.
Far from being a preserve of super-sexy high-tech companies like Google and Apple, who can afford to indulge in such seemingly high-minded psycho-babble based on skyrocketing share prices, this search for meaning is creating an ever growing number of companies that essentially are more movements than companies, even in the most mundane of businesses like shoe retailing.
The Monday Morning Question
“One of my investors asked me “Is this a company or a cult?” is how Alex Karp (CEO of Palantir) described the reaction of one investor to the company’s culture in a Businessweek interview. Equally interesting is his reply to the question “To make something work, it cannot be about the money. I would like to believe we have built a culture that is about a higher purpose that takes the form of a company.”
This is as yet the best definition I have come across to describe the driving force behind what makes the difference between NORMAL Co. and GAMECHANGER Co.
Employees of NORMAL Co. roll out of bed Monday morning, wearily brush their teeth, sleepily commute to their place of employment in order to fulfill a function that leads to a payment at the end of the month allowing the employee to pay the bills.
Team members of GAMECHANGER Co. also have bills to pay, but they are part of a community of people that is focused on achieving something loftier: a commonly pursued purpose! (mind you, they also get paid at the end of the month and also pay their monthly bills)
This sense of purpose is what takes the fear out of Monday and unlocks the most powerful force of all: willingness.
Some Purpose!
Here are some samples of purpose that have created game changing movements in the shape of companies from hi-tech to no-tech:
Palantir:
“Our primary motivation is executing against the world’s most important problems in this country and allied countries.” Alex Karp
Air Asia:
Serve the Underserved – a philosophy encapsulated in AirAsia’s memorable tag line: “Now Everyone Can Fly.” Having democratized air travel by freeing it from the clutches of the elite, Fernandes is determined to break down the affordability barrier in other aspects of daily life – hence Tune Hotels, Tune Money and Tune Talk
Zappos:
Delivering Happiness!
Southwest Airlines:
Southwest Citizenship: Southwest Airlines has always been devoted to each and every community that we serve. Our Employees, Customers, and neighbors make the Southwest Family the LUVing place that it is, and we are proud to offer our cities more than just friendly and affordable air service. We offer our hearts! From monetary and in-kind donations to Share the Spirit volunteer efforts, Southwest reaches out to provide help where needed.
Purpose Makes Happy & Makes Money
Just in case this sounds all too fluffy and you are wondering why and how all this fluffiness can lead to real financial impact consider the difference between these 2 statements:
Dell:
Dell is committed to being a good neighbor in the communities we call home. We must continue to grow responsibly – protecting our natural resources and practicing sustainability in all its forms – and improve the communities where we live and work through our financial and volunteer efforts.
Apple:
To make a contribution to the world by making tools for the mind that advance humankind
Dell’s essential motive was to give us a cheap/affordable computer (it never had the intention to democratize computing, as compared to Air Asia’s driving purpose: to create access to a range of services hitherto blocked off to vast numbers of people).
This essential purpose has long been achieved, to the point where it has become hard to turn a profit for normal computer manufacturers within the current hyper lean production and logistics environment.
Essentially Dell did not have a real purpose but a strategy which had it’s own demise built in: as soon as the competitors could copy & improve on Dell’s system the race to the price-bottom would be finished and Dell’s initial strategy rendered obsolete.
Dell’s statement of purpose is based on the word ‘MUST’, not ‘WANT’, ‘ASPIRE’, or ‘CONTRIBUTE’. It is a top-down manifesto that essentially gives an order as to what ‘must’ be done, no invitation here, just a directive from the boss, period. It actually tells us that Dell is only concerned with the communities they operate in, even though a company as large as Dell will have a global impact. The statement has a ‘constricted’ and ‘politically correct’ feel to it, the reader is not invited to participate or contribute, it’s a one-way instruction.
In comparison, Apple has done something utterly spectacular: it invites us to join a movement to literally advance humankind. Essentially it is an open-ended opportunity to continually explore and expand into our full potential, this is hard to resist. You have been invited to change the world!
This powerful purpose is the reason Apple spawned the first cult-like follower-employee culture, they were not just employees, they were and are evangelists, a movement that is out to change the way we interact with the world.
Taking a step back we can see how two major players have made their statement of purpose and intent: one is rather classical, muted, top-down, the other visionary and expansive. The difference they make in the way people work for them and how their purpose translates into sales are tremendous:
Today Apple’s market valuation is 12 times Dell’s…
