Culture Eats Strategy . . . . or Does It?

Puzzle 2Transformation is HARD!  If you don’t believe that then you have never gone through one.  Often, when a transformation fails or an organization does not achieve its’ desired business results, “culture” is identified as the culprit or perhaps the scapegoat so says two Supply Chain Management professors in “Culture Eats Strategy . . . and how to deal with it”. Professors Hanson and Melnyk believe that blaming culture is often misguided and wrong.  “To understand and work with culture in times of change, it is necessary to break with conventional wisdom in many areas and dispel several management myths.”   The article, while written by two Supply Chain brains, focuses mostly on the challenges of making change happen within an organization and how important it is to “manage” that change and deal with / embrace corporate culture.

What is corporate culture?   Here are a few definitions:

  • the collective values, beliefs, principles and PURPOSE of an organization
  • “what people do when the boss is not around”
  • consists of group norms of behavior and the underlying shared values that help keep those norms in place

Culture develops over time, gradually, and in ways that are sometimes difficult to see.  As an employee, it is often hard to articulate the elements of corporate culture because you are living it every day.  But if you simply think about it as behaviors that are accepted and or rewarded then it becomes clearer.  For example, is it accepted for meetings to start late?  Do most people show up to work at 7:00 a.m. or 9:00 a.m.?  Might you get run over at 4:30 p.m. if you are too close to the exit?  Is it common or unusual to see a tie or a jacket or even hosiery?  Do employees offer suggestions freely or do they sit quietly and simply take direction from the boss?  Culture is also taught, in that it is passed on from current members to new members (very much like a family . .).    

Make no mistake that culture is a very powerful force  – particularly in a time of change.  So, how do you deal with culture?  You have two choices – 1. Work within the corporate culture – find parts of your change strategy that are consistent with your PURPOSE (culture) and exploit them or 2. Work to change the culture – it is doable BUT it is also HARD.  Culture takes time to emerge and it also takes time to change.

In either case, it will be necessary to dispel a few important Management Myths:

  • Show them a better way and they will embrace it – here employees must not only understand the “how” but also the “what” (the PURPOSE or the desired outcome). The “what” is often not communicated which is a problem. In addition, the “what” should also include “what’s in it for them”.  This requires frequent and ongoing  communication. Also, showing them a better way means that un-learning the old ways will be necessary and this is not easy. 
  •  Culture and strategy are natural enemiesthis is only true if management believes there is an inherent conflict.  Here, you need to understand the characteristics of the strategy / change and how to work with elements of the corporate culture where the purpose is aligned.   Where there is no alignment in purpose, creating a “crisis” ( I prefer “a burning platform”)  may be required.   This is  a compelling reason why the strategy / change is critical to “survival” and that the status quo is no longer acceptable.  This can provide motivation for the organization to abandon current practices and to adopt new ones.
  •  Don’t tell people how to do their jobs – tell them what you want done and get out of their way – conventional wisdom tell us that this is normally a very strong management practice. Unfortunately it relies heavily on organizational culture which drives behavior and decision making.  So in times of change, it will be necessary to tell people exactly what to do and how to do it – even executives.  This is hard for everyone involved but it is necessary until the culture can be brought  into alignment with the change strategy.

In summary, corporate culture is often blamed when a transformation fails.  Understanding the culture and how it aligns with your change strategy is critical to success.  Culture can eat a change strategy for breakfast – but with the appropriate “management” it can support it as well. 

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Re-inventing Food – Ready to Blow Up Your Kitchen?

sgSome of you may remember Soylent Green (book/movie) where the central premise is people living on wafers because of pollution and over population.  You may also have heard recent reports about someone living on no food but something called Soylent-a drink based on the essential elements humans need to survive.  Here’s the gist:  A struggling entrepreneur looks at his food bills and applies some engineering innovation to the problem and comes up with a formula for a concoction that helps him cut down on his food bills and saves him a ton of time and voila-it works.  He switches all his energy to making that a viable product, crowd sources funding for it and now has NASA and the defense department as potential customers and is profitable already.  Think of it as a 3D printer model for food – break something down to its base components and then assemble it yourself.  The implications of this a ginormous – it will essentially rethink the entire food Supply Chain process.  No need of farms, grocery stores etc. etc. and you can use your imagination for the rest.

But don’t go throwing out your oven and kitchen stove quite yet.  While the phenomenon in itself is an interesting topic for a future blog, there is another aspect that needs careful examination.  If you look at the Value that food provides as nothing more than fuel for the body, then go ahead and empty out your kitchen.  For most people, there is far greater Value in the process of feeding than just refueling yourself in the most cost effective and efficient way possible.  Selecting, acquiring, storing, preparing, eating etc. are all activities that have intrinsic real value associated with them.  The act of cooking is a chore for some but an absolute delight for others – which has nothing to do with the refueling?  The act of eating, especially with others (depending on who they are :-) ), has tremendous social value associated with it?  The process of selecting and acquiring food is very enjoyable and part of the ritual for many?  The act of feeding satisfies many if not all of our senses and that has real value associated with it? 

This is no different than what most sourcing/supply chain organizations do – they assume that “food” is only needed for refueling and therefore the most cost effective and efficient way is the best way because that is the way we choose to define the Value in food.  However, each and every one of our stakeholders/customers defines the Value in “food” totally differently – and that’s why we almost always run into resistance.  We cannot make them replace their food (with all the real, explicit Value associated with it beyond the refueling) and make them drink Soylent with the argument that it provides refueling and is the most cost/effort effective.  This is what we meant a few years ago when we declared that Strategic Sourcing is Dead (and if not, it should be).    We caused quite a ruckus and commotion in the entire community and wear the scars quite proudly!!  If your organizational strategy is to keep working on Soylent and make sure your organization delivers it most effectively and efficiently, then you may satisfy the nerds and the geeks (my apologies but that’s the creator and the current market) – those people for whom food represents nothing but refueling and therefore are looking for the most efficient way to do that.  But for all the others who get far more Value from food than just refueling, it’s a losing proposition. And you will never get them to like Soylent.  I don’t know about you but I’m keeping my stove and oven and getting ready for the Indian cooking classes I’ve got to teach :-) .

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$871 Billion – 33,000 Deaths-3.9 Million Injured-JUST in the USA

googlecarYou probably got in your car this morning to get to work and depending on where you live, it may have been a horrendous experience.  That is about to change in a big way because the entire “driving a car” paradigm is about to get disrupted big time.  And it is fascinating to watch how a well-entrenched auto industry is fighting this existential threat instead of embracing it.  Google’s self-driving car (already legally on the road) is going to change the ownership model to a service model.  You need to get to work – a “car” (more on that later) shows up and gets you to work-that’s it.  You don’t need to own a car, drive a car, maintain a car – and that is scaring the %^$# out of the auto industry.  And that explains why Google’s attempt at collaborating with Detroit has fizzled.

Detroit looks at the disruption and knows that it will relegate them to being nothing but hardware providers to a transportation service company that uses software to move people and therefore has decided not to collaborate with Google.  As a result, Google is looking at non-traditional Detroit options like Tesla or  bypassing Detroit altogether and going to their major suppliers like Continental.  We could see a  scenario where Detroit’s supply chain could eliminate their customers from the entire business model!!

Driverless cars also mean that the cost  ($871 billion-33,000 deaths) of humans driving cars will go away so it’s not just a convenience issue and that has many people even more excited.  This is, of course, not the only implication and here are a few more from Dan McLaughlin’s article,17 Ways Driverless Cars Could Change America:

  • “Car” design:  no driver needed so “car” could be a sofa on wheels
  • Roads and traffic patterns
  • Who can “drive”:  kids, elderly, handicapped
  • Auto Insurance industry
  • Car culture
  • Extending telecommuting:  you will be working while sitting on that sofa and moving from one place to another
  • No more taxi/truck drivers needed
  • No more privacy:  where you go and when is recorded
  • Disrupting law enforcement
  • Risk of “hacking”:  already an issue

These are just some of the implications – can you think of others?  Take a few minutes and force yourself to imagine driverless cars and what impact it may have on your life.

And as you think about it from a personal angle, don’t forget to think about the impact on your business – it may be significant!  Keeping tabs on Innovation is a critical issue and one that Sourcing and Supply Chain must play a critical role in.  Mining innovation in your supply chain is a major Value Driver for your stakeholders and it allows you to play a much more strategic business partner role and not just be a paper pusher.  This is an issue that many Sourcing/Supply Chain organizations don’t pay a lot of attention to even though it has a significant impact.  If your competitors are much better at finding and deploying innovation from the same supply base, you have just cost significant value loss for your corporation.  And if Google is successful in collaborating with Detroit’s suppliers, it may even be an existential threat.

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Are you Lionel Messi or Michael Bradley? Big Data takes over the World Cup!

soccer 4Unless you have been in a cave or just hate football (soccer to the uninitiated :-) ), you know by now that Argentina just beat the Dutch.  But did you know how many woodwork ( the goal used to be made of wood and not metal) shots there were – shots that hit the goal but didn’t go in?  Or that Argentina made 639 passes compared to 818 for the Dutch?  And by the way, Netherland covered slightly more distance than Argentina but significantly more distance with possession of the ball?  Or the completion rate of the passes and whether they were long, medium or short? And on and on and on.  Big Data has come to football and it may change the game as we know it.  I grew up playing soccer(despite what I look like now) and coached a travelling soccer club in Naperville(where the term soccer mom was invented and is fiercely competitive) and all I can remember is get the ball in the goal and stay on sides.

While the analytics movement started with baseball (remember Moneyball) and moved to other sports, the application of data analytics has also reached football in a big way.  Here is a small example of how it  is being applied to understand not just the effort being expended by a team and each individual player but also the effectiveness of that effort.  While Netherlands had a clear lead in ball possession, passes(both attempts and completed), and other categories, Argentina had more attempts on goal, more shots on target, equal number of corners, equal deliveries in penalty area etc.  If you knew enough about football, you could look at the post match data and draw a mental picture of what the match was like – and you would come very close?  You can tell the style of play of each team (controlled ball possession vs. counter attacks or individual attacks) by just looking at the data?  You can develop a counter strategy for each opponent based on statistical analysis.

Thanks to missile tracking technology, the analytics are being applied at an individual level also.  STATS is the company that has been tracking every football player in every single match through a system used for tracking missiles.   Kopp mentions that Michael Bradley from the US covered 10.4 miles in a game while Lionel Messi covered 6.6 miles for the same amount of minutes in a different game – that’s quite a stark difference.  That means Bradley covered 3.8 miles more in just one game – that is a difference of 60%!!!  Does that make Bradley a better player-a better athlete?  While some of the difference relates to their different positions, the different styles that each team plays, match conditions, opponent etc., it does not explain everything?  Clearly, Messi is doing a lot more with his effort in terms of effectiveness than Bradley.  His runs are shorter but faster?  He is able to conserve energy and then use it for short bursts of activity?  His running is often with the ball than without.  There are clearly many factors in play but the data does point to the difference between effort and effectiveness.  It clearly will make each manager rethink their team composition, their strategy, their training methods etc. etc.   Brian Kopp goes on to say that 2 of the top players at the World Cup in terms of distance covered are Americans so clearly the effort is there.  But the effort may exact a huge price in terms of energy left to expend towards the end of the game – where many games are decided.

So would you rather have Lionel Messi or Bradley on your team?  Are you measuring your people on effort or effectiveness?  What have you done recently to understand what competencies your organization needs and put in a training program to develop those competencies?  You could have a number of people who are running up and down the pitch expending tremendous effort but not having any impact at all?  Do you understand how to measure the effectiveness of your people and put in place a Competency Based Talent Management program?

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