- DEFINE THE DESIRED CULTURE
One main characteristic of an organization's culture is its purpose for existence. Why does it exist? What purpose is it trying to fulfill? Once people understand this they can move forward in an effective manner. Without knowing this, there is no way to determine who to hire, what strategy to follow, what customers to pursue or where to invest resources. One important aspect of an organization's culture is the consistently displayed values and beliefs by the members of the organization. Values are defined as "what is considered important in the organization," and beliefs are "what is considered the right thing to do in the organization." Consequently, a big part of an organization's culture consists of habits. What the members of an organization do on a regular basis demonstrates their true values and beliefs. Therefore, the first step in creating a great corporation is for the leaders of the organization to decide what values and beliefs they want demonstrated on a regular basis. As you attempt to clarify the desired values and beliefs, think of them from the perspective of your customers or potential customers. What do you think your customers feel should be considered important by your employees? What do you think your customers feel should be considered the right thing to do by your employees? Of course, the best way to determine how your customers feel about values and beliefs is to ask them. In some cases, the values and beliefs may vary from position to position. For example, a controller may need to value detailed analysis of data while a receptionist may need to value smiling and making eye contact with visitors to the organization.
- GET THE RIGHT PEOPLE IN THE RIGHT POSITIONS AND THE WRONG PEOPLE OUT OF THE ORGANIZATION
The single most important factor in building a great corporation is getting the right people in the right positions and the wrong people out of the organization. Obviously the terms "right people" and "wrong people" are very vague. What is a "right person" in one organization would be completely the "wrong person" in another organization. The key is to search for, attract, screen, interview and hire people who primarily have the values and beliefs necessary for the particular role, who secondarily believe in the purpose of the organization and who finally have the technical skills necessary for a given role. This is the hardest part of an executive's job because it means letting go of some people who are good friends and having to invest a great deal of time, money and energy in finding and attracting the right kind of employees. The good news is that as you hire more and more of the right kind of people for your organization, they will begin to attract more people like themselves. One caveat on hiring is that I believe corporations should NOT look to grow the number of their business units until after they have hired the right people. Far too often in the past decade companies have added more locations and then hired people to fill slots. As a result, the value that the customers received from these organizations went down dramatically, and in time the value of their stock price and profitability went down as well. Be patient in the short-term, hire the right people for your organization, and then add more units for these "right people" to lead and manage.
- ESTABLISH A CLEAR, CUSTOMER-FOCUSED STRATEGY OR STRATEGIES
A strategy is a guideline that channels all of the decisions, actions and meeting agendas along the same path toward fulfilling the mission (or purpose) of the organization and achieving its vision.
Effective strategies always come from the outside-in. In other words, a great corporation would first find out what matters most to their customers. From this list of what matters most to their customers, the organization would narrow their focus to the one or two or, at most, three items on the list that they had the competency to deliver, that they were passionate about delivering and that they could make money delivering. Developing an effective strategy takes time and energy, but once it is established it simplifies decision-making and creates highly effective synergy between departments.
Some strategies are so brilliant that in retrospect it seems obvious that they should have been implemented. Unfortunately, no strategy is obvious before you select it. Here are some famous strategies:
Wal-Mart - we will be the low cost king and be available all over the country
Southwest Airlines - we will be cheap, no frills and lots of fun
GE - we will run the best managed business units in the world
Disney - we will provide entertainment for all members of the family in a variety of mediums
You can have more than one strategy, although I think three strategies would be the absolute limit for any great corporation.
- CONNECT TACTICS AND RESOURCE ALLOCATIONS TO YOUR STRATEGY OR STRATEGIES
Of course, purpose, values, beliefs and strategies mean absolutely zilcho if the actions of the employees and the allocation of resources are not connected to them. A great corporation does not post their purpose, values, beliefs and strategies on the wall for customers to read. Instead, they make sure that where they place their feet, mouths, efforts and wallets tells the customers very clearly what is considered important in their organization, what is considered the right thing to do, what they see as their purpose and what path they are going down to deliver value to customers. Customers don't care about what your organization says they believe in or value or see as your purpose for existence. All they care about is getting better results in their highest priority outcomes. Great corporations deliver this value by connecting tactics and resources to their consciously selected purpose, values, beliefs, and strategies.
Understanding what to do to become a great corporation is not the hard part. The hard part is having the courage to stay focused and do the things necessary to connect these four parts together.
Ok, now its your turn to answer the question, "How do you build a great corporation?"
If you want, feel free to send your answers to me and I will include them in next month's e-mail. You can hit reply or send an e-mail to info@thecoughlincompany.com
Also, I encourage you to encourage your colleagues to sign up for this free monthly electronic series. The more people we get involved, the greater the quality of the collaboration can become. In case you forgot, all they need to do is to send any e-mail to join-ee@thecoughlincompany.com
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