By Charles Follett, and Richard Ogle
Introduction
When founders of start-ups start to think about leaving, most are not just interested in cashing out, though leaving behind a growing, financially healthy company is obviously desirable. The majority are also concerned with their legacy as founders in the form of a vigorous, dynamic, and adaptive culture. that can sustain and even increase marketplace performance. For those interested and creating and bequeathing such a culture, this article lays out some key attributes and how to achieve them.
Apple as a Model of Success
If we’re looking for models, we can hardly do better than Apple under Steve Jobs. Jobs may be best known for creating and growing a company that made insanely great products capable of making a dent in the universe. Perhaps less well known is the fact that he also bequeathed a vibrant, resilient, sustainable, self-transforming culture whose employees continue to be proud of working for Apple.
The Core Attributes of a Successful Culture
While no one company can embody every desirable cultural trait we might think up, certain elements and practices appear to be indispensable. They are as it were “constitutive”—i.e., they define the very concept of a culture, the parameters along which it can be measured as either successful or not successful.
In our three decades of experience as consultants, we have found the following elements are essential to building a successful performance-based culture:
VOKO: even a merely viable corporate culture must necessarily be constituted by well-defined answers to the following questions:
Vision: What future inspires us?
Objective: What is our value proposition? For whom?
ORG Design: What organizational configuration optimizes performance?
Key Performance Indicators (KPIs): What metrics matter for our business?
To these core elements we may add Mood and Style:
Mood: The importance of mood is self-evident. Employee moods, ranging from ambition to complacency to resignation or resentment, plainly have a profound effect on virtually every aspect of a corporation’s operations, and often spread contagiously.
Style: A company’s style, often set by the leadership, is again influential. For example, many start-ups exhibit positive styles such as “Be nimble,” “Be opportunistic,” “Get stuff done,” etc.
The Importance of Synergy
Companies often treat culture in terms of a series of separate elements—objectives, metrics, employee mood, etc.—like so many cans on the supermarket shelf, waiting to be taken down in used. But culture doesn’t work like that. Its component parts are not independent of one another, and neither are they static.
Whether it’s successful or not, whether it’s transforming itself or moving towards disintegration, a corporation’s culture is an inherently dynamic phenomenon, the result of a constant interplay of elements and practices that grows and changes with the company. Crucial to that process, which can radically transform a firm over time, is the synergy between the various elements and practice outlined above.
Synergy is standardly defined as “The interaction or cooperation of two or more organizations, substances, or other agents to produce a combined effect greater than the sum of their separate effects.”
In more formal terms, it is nonlinear (or non-additive), typically giving rise to effects that are emergent.
The Case of Amazon
Let’s look at a concrete example. When Amazon took over Whole Foods in 2017, it wasn’t doing so solely for the purpose of extending its retail reach into the food business. It was also motivated by the opportunities it identified as arising from several cultural synergies:
Amazon could promote a whole range of its private labeled goods, which generate higher profits than standard so-called third-party labels (Objective)
Whole Foods’s bricks-and-mortar locations could also be partially re-purposed as more locally positioned warehouses for other non-food goods that Amazon could ship more quickly (KPI).
It could learn from Whole Foods’s face-to-face customer experience as Amazon increasingly expanded into other retail lines of business, such as bookstores (Organization).
These various synergies led to the emergence of a transformed business culture, from the level of strategic objectives to organization to employee mood and levels of involvement. As a result, Whole Foods’s culture tipped from being a high-end food provider to a new hybrid spanning a larger range of goods, and integrating Amazon’s traditional strength in logistics and customer satisfaction. The outcome created significant new opportunities for business growth.
Reciprocity and Reach
Two essential dimensions of synergy are “reciprocity” and “reach,” as outlined in Brown and Duguid’s The Social Life of Information (2000).
Reciprocity refers to mutual interaction between two or more nodes in a network of elements. This often manifests in groups of employees whose members increasingly collaborate in high performing teams. In Amazon’s case, this type of synergy arose in the form of close cooperation between logistics managers and customer-oriented staff concerned about the quality of sourcing.
Reach has to do with linking up to more distant elements. Thus Amazon expanded its original online business by reaching out to retail operations such as those engaged in by Whole Foods.
Two key aspects of reciprocity and reach are especially worth noting. First, they tend to operate cyclically, so that after a process of reaching out, a new phase of reciprocity kicks in, helping to create greater internal and external coherence.
Second, working together, they create greater alignment between the various elements of corporate culture, making it both more adaptive—internally and externally—and more stable.
We can easily identify similar synergistic processes at work at Apple. In both cases the outcome was both rapid growth and qualitative cultural enhancement.
A Place to Start
Two attributes of a successful legacy culture matter above all:
High and enthusiastic employee involvement and identification with the company’s Vision, Objectives, ORG Design, and KPIs
High growth prospects
Depending on the nature of the start-up’s business, synergies between the various cultural attributes identified above will contribute to achieving both these goals.
For example:
New objectives identified by the leader may shift employees’s mood, newly inspiring them and generating a higher level of involvement and identification.
A form of organization that encourages reciprocity (group interrelatedness) at all levels will also serve these goals, especially as trust rises; and the new form of organization may in turn enhance the possibility of achieving the new Objectives and Performance goals.
Reaching out to internal and external hotspots (new team, unit, and enterprise leaders, emerging cultural trends and ideas, etc.) will again interact synergistically with the foregoing.
Two simple steps can get you started:
First, conducted a careful survey of the state of your corporate culture, examining each of the elements noted above. This can take the form of a comprehensive set of questions answered by the relevant employees.
Second, this survey can be used as the basis for whatever necessary redesign of the culture needs to take place. As with all such transformative endeavors, it may prove useful to employ the assistance of outside consultants.
Conclusion
The task of bequeathing a successful culture may seem daunting. It doesn’t need to be.
While virtually any element of culture may spark new synergies, in most cases leadership will play a crucial role. We leave you with some final thoughts on how to bequeath a vibrant, dynamic, and adaptive culture to those who take over from you:
Keep inspiration alive by establishing the means of communicating the vision broadly and often drive accountability and ownership from top to bottom in the organization in a way that connects directly to the vision and objectives.
Align functional promises for coherence and synergy around the organization’s core strength
Define, track and make visible your most important metrics – and use them to make necessary adjustments to objectives and organization.
Comments