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July 27, 2004
Culture as a part of your playbook
Several really interesting posts and articles around the importance of CULTURE in business. No not yoghurt or throat culture, corporate culture - as a means and source of both strategy and insurance of its effective implementation.
It's one thing to pick a strategy and develop some kind of process, it's that much more lasting and impactful when such strategy is embedded in how people think and act naturally within the company. (Corporate culture is not just something that gets laminated and put on peoples desk along with corporate values, it is a conscious/unconsious, living thing, a set of beliefs and practical ethics that affects hiring, incentives, and all communications.)
There are obviously a wide range of corporate cultures but here are some thoughts and examples of cultures that really drive leadership and true, sustainable positioning.
Customer Service Cultures
Fouroboros, highlights Progressive insurance (a great "progressive" company that is shaking up its industry). They take the claims process after an auto accident personally. Someone hit their customer. They take care of the whole process personally, all the way down to getting the person in the accident a cup of coffee to calm them down. An example of a customer service culture that has got to go a long way in building life-time value.
Johnnie Moore highlights a great story about a hotel chain where culture beat "technology to the "CRM" punch of true touch customer relationships. We all like it when staff recognize us as return customers. Well, this chain made sure the front desk knew a repeat customer with no technology, just culture. Simple, the bellman asked if it was the guest's first visit and then deposited the luggage at the angle that told reception to say "Welcome back to the ..." It's amazing how many hotels with sophisticated databases fail to do that.
Continuous Improvement Cultures
Business 2.O recently profiled how culture radically improved results ... in manufacturing. The company is Toyota. The core tenets of the TPS (Toyota Production System) seem less about process than about culture, here are two of my favorites:
• "Andon (Line Stopping). Any worker can halt the line to fix a problem. Workers shouldn't be afraid to do so." What a great way to incent a do it right of thinking, a culture of empowerment and personal responsibility.
•
Start Up Cultures
Business Pundit poinders the challenges of building and maintaing the right culture in a start-up, especially when bringing together a bunch of people from different backgrounds. As VCs we see this all the time with our companies. But frankly leadership is the key thing. How the leader acts and how much energy he/she puts into developing and staying true to a culture is critical. A great start-up culture can make all the difference in the world, in hiring the best talent, in driving product delivery, in hitting milestones, you name it.
One example we've seen is in a portfolio company. A new CEO came in and defined an agressive sales culture (appropriate to the company's situation) and drove and cemented this culture throughout the company. How? By incenting people, communicating and walking his own talk. Everyone (including receptionists) took salary cuts with the difference plus more to made up by bonuses based on company sales results. And the CEO started by cutting his own, freshly negotiated salary in half. Everyone, everyone became focused on meeting prospect and customer needs.
In our playbook system, we ask you to look at your playing field - the customers, competition and your own company's competencies. It's easy to focus on economics, technology etc. in such analysis. How about looking at the culture of each of these as a core part of the analysis? Seems like a good idea.
Posted by johnza at July 27, 2004 09:27 PM
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