Culture: the first of four key success drivers

The core principle of the ValueGroove approach developed by Paul O’Malley Associates is that the fundamental purpose of an organization is to create value for customers, employees, investors and other stakeholders in ways that integrate the interests of those groups.

For an organization that embraces this approach, there are four key drivers of organizational success: Culture, People, Strategy and Management Process.  In this article we will briefly review the essential elements of the ValueGroove approach to culture.

Organizational culture—the values, attitudes and “ways of doing things” that characterize a company—has a major impact on the organization’s ability to succeed, adapt, and grow.  Culture also is a major determinant of what kinds of employees will be hired and retained.  People who don’t fit the culture will ultimately be driven out by what one of our clients called the “corporate immune response.”  It is important therefore that culture be managed. 

ValueGroove Culture—the big idea: Put real value creation, for customers, employees and investors, at the center of everything the organization does.

What to do:

·      Focus on creating real value, and avoid wasting the time, energy, imagination and credibility of the organization on creating the illusion of value.

·      Explicitly link the interests of customers, employees and investors. 

·      Act as an agent of the customer. This means not selling customers anything you wouldn’t buy if you were in their situation, but had all of the knowledge that you posses (in your current situation). 

·      Establish the prime directive that everyone in the organization will treat everyone else (fellow employees, customers, suppliers) with 100% respect at all times.

Results:

·      A culture that attracts employees and customers who value excellence.

·      A culture with clear values and priorities, which allows management to delegate most decisions without micro management, and yet achieve great alignment among the decisions that employees make.

·      A culture that will be more likely to self-correct when it falls prey to the usual challenges: politics, ego, arrogance, not-invented-here, managers acting in their personal short-term interests, personal insecurities and defensiveness, empire building, taking advantage of customers (e.g., selling value illusions), taking advantage of employees, etc.

·      In sum, a culture that has a reasonable chance of sustained excellence and success.

Tools:

·      Use ValueGroove Strategy and Management processes to articulate and reinforce these cultural norms.

·      The most important critical success factor for making all of this happen is for managers, especially the owners or most senior leaders, to live these cultural principles all day, every day.

Failure patterns:

·      Not explicitly managing culture. Not articulating or adhering to a set of values, which confuses employees and customers, and leads to inconsistent behavior and lack of internal alignment.

·      Viewing profit as the purpose of the organization, rather than as the result of creating superior value for customers and employees. This can lead to practices that improve short-term profitability while destroying long-term value for investors.