When it comes to alignment, the most important is the alignment of teams. Peter Drucker famously said “Culture Eats Strategy for Breakfast.” What he meant is that having the right strategy, even if based on best practices of development, is necessary but far from sufficient. That strategy’s success will always be dominated by the culture of the organization attempting to execute it. So, building the right teams, the right structure, and the right culture are critical.
In countless deep studies of organizational performance, such as the one cited in this Forbes’ article, culture has a causal relationship with organizational performance. In this article, using the Denison Organizational Culture Survey (DOCS), measures of involvement, consistency, adaptability, and mission. They found causal relationships with increased customer satisfaction and sales. Further studies show causal relationships with increased share price, productivity, satisfaction, and employment applications, with reduced employee and customer churn and absenteeism. The relationships are deeply proven to be causal.
I write earlier about building the tools of alignment and how it’s not a top-down exercise here (Refer to article on tools). Building and sustaining the right culture is one of the most challenging as well as rewarding parts of this process.
Culture starts with mission and values, and should be reflected in the corporate strategy, but is created and constantly evolved by your teams. Managers and executives can steer culture, but often with less direct control levers than perhaps they think. These levers are:
Mission, Vision, Values
The Mission, Vision, and Values seem inherently about building the corporate strategy, but these elements must be discovered as much as driven. The core founding team and the teams that surround them need to have both an input and be influenced by the choices both in content and even words used to express these concepts. A mission must be worthy as a focal point of value for all stakeholders. Why do we exist, and is that enough for me to devote my energy, creativity, passion, time, and possibly capital to? The Vision is what aligns people to that mission by expressing what the mission means in a deeper explanation that clarifies stakeholder’s understanding. Values are to be discovered, they must reflect the true core values of the team that is building the company. They must be clear enough to enable unambiguous decisions about who and/or what is aligned and in. They must be held dearly enough to be used to select in or out customers, products, markets, practices, and both existing and future stakeholders. All of these must also encompass a set of principles that are market-worthy; meaning there is a rationality test that must be applied. I haven’t heard of a company that changes the world by embracing their inner sloth.
I won’t belabor corporate strategy other than to say that strategy must be aligned to mission, vision, and values as well all the practical constraints of successful strategy. Further, corporate strategy must include in its output some quantitative expression of the resources required to execute (quantity, skills, tools, capital), as well as the more qualitative behaviors, structures, and metrics that will also be required. From these elements, a company can develop a talent strategy.
Talent strategies have evolved significantly with changes in the way to think about talent and teams to the additional layers of alignment that are possible. The basics always start with skills and the fundamentals of the job itself. Especially in rapidly scaling companies, with limited past focus on titles and job descriptions to transition into a simplistic model of the jobs to be done, skills required, and headcount required to effect the growth. This is fine for first level planning, and does give a good way to get a handle on the fundamental economics of scaling – headcount, compensation, tool-seat count, office space / remote workstations and other considerations. These are not unimportant; but they barely scratch the surface of building an effective talent strategy.
First, planning baselines must have some flexibility to the people available in the market, the true skills required for the job, and the ability to grow talent internally. It’s important to remember that personal growth is one of the most important intangible benefits of having a job; don’t hire people without expecting and supporting their personal growth and that includes the job description, how they are managed, and the opportunities, mentoring, challenges, and promotions available. I have found that it’s usually better to hire people on the basis of their aptitude to solve problems and learn new things than on their ability to do exactly what’s in the job description; tempered with the idea that forcing someone to cross too great a chasm can be setting them and yourself up for failure.
Second, values are an important test in hiring, evaluation, and retention. Real values are displayed in behavior rather than being stated. Look for examples of behavior that reinforce or negate values and respond accordingly. Values are very often intrinsic in people by the time they enter the workforce; so change is unlikely. However, it’s important to understand the context of the behavior and your own interpretation of the values before measuring someone’s alignment.
Most organizations judge behavior based on the company’s values and many leaders understand that their own behaviors are critical to creating and sustaining the company’s values, but few organizations go deeper into behavioral alignment. Behavioral alignment is where the corporate strategy (including mission, vision, values, skills, jobs, challenges, etc.) truly can align with the expression of the talent strategy. All of us have behavioral profiles; types of behaviors that are more natural, easier for us to perform, types of behaviors that are personality associated. It is possible to more deeply align the talent strategy and the corporate strategy by aligning the composition of the team and its composite behavior to the demands of the strategy. There are ways to measure behavioral styles, composite those styles into team behavior and assess the aptitude of the team against the specific behavioral requirements the team will face. The usage of data and science in this approach enables the ability to then also adjust the team and the distribution of strategy elements in the organization to maximize alignment and success. This is the essence of talent optimization.
Finally, structure and metrics are critical in building culture. Structure includes the way decision making is distributed, responsibility for tasks, tools and data, and skills distribution. Structure needs to be heavily influenced by the teams’ role in the strategy, and the desired behavior and values of the team. A team pursuing a strategy of operational excellence with high conformity to cost containment and performance of rigid tasks needs a very, very different structure than a sales-scaling team than a team pursuing product innovation and product/market fit. As companies evolve, corporate strategies can also become more multi-dimensional where a core product is in scaling and customer loyalty building while the company also pursues an innovation strategy in an adjacent market or product. Once structure is conceptualized and refined, metrics are key to enabling management and teams to understand what’s happening as well as to reinforce behavior.
In my next articles, I will go more deeply into how to achieve talent optimization as well as driving alignment with your board and investors, customers and suppliers.