Corporate Culture: The Only Truly Sustainable Competitive Advantage
Given enough time and money, your competitors can duplicate almost everything you’ve got working for you. They can hire away some of your best people. They can reverse engineer your processes. The only thing they can’t duplicate is your culture.
HIRE AWAY BEST PEOPLE
Guy bumps into a competitor’s star engineer at a trade event:
“Would you come work for us if we gave you $1 million/year?”
“How about $50,000/year?”
“What do you think I am?
“We’ve already established that. Now we’re negotiating.”
While not everyone is for sale, enough are to make you vulnerable.
REVERSE ENGINEER PROCESSES
Even if you’ve got things patented, trademarked or cloaked in multiple layers of secrecy, your competitors can see what you deliver, what you get done and the core pieces of how you do it. Even if they can’t duplicate what you do exactly, they can get close enough to hurt you – or take it to the next level and render your processes obsolete.
BRAVE CULTURES ARE SUSTAINABLE
All music is made from the same 12 notes. All culture is made from the same five components: behaviors, relationships, attitudes, values and environment (Follow this link for more on BRAVE cultures and some ways to put this into practice across interviewing, due diligence, and engaging with the culture.). It’s the way those notes or components are put together that makes things sing.
In sustainable, winning cultures, behaviors (the way we do things here) are inextricably linked to relationships, informed by attitudes, built on a rock-solid base of values, and completely appropriate for the environment in which the organization chooses to operate.
It’s the context that makes it so hard to duplicate a winning culture. Because every organization’s environment is different, matching someone else’s behaviors, relationships, attitudes, and values will not produce the same culture.
ATTITUDE IS THE PIVOT POINT
As you work to evolve your culture, focus on attitudes. There’s a strong case to be made that IBM IBM +0.9%‘s near death experience was a result of a bad attitude. It thought it was the best. It thought its customers needed it more than it needed its customers. It stopped being flexible. The big thing Lou Gerstner did was reversing that attitude. Behaviors and relationships followed.
More recently, we’ve seen the same thing at Hewlett-Packard HPQ +1.65%. It started believing its own myths and lost the congruence between strategy and posture. Meg Whitman can be successful only if she is able to change the organization’s attitude (see my post “Meg Whitman’s Day One Itinerary as CEO of Hewlett-Packard”).
Of course, I am oversimplifying things. Few things are as simple as we hope they are. Of course you have to be in touch with your environment. Of course you have to make sure your values are current. Of course people and communication matter. Of course it’s all theoretical gibberish until someone actually does something that impacts someone else. Attitude is not the only lever. But it’s generally the lever to pull first, using that choice or change to influence the others.
This is a good example of step 2 of The New Leader’s Playbook: Engage the Culture and Your New Colleagues in the Right Context
Be careful about how you engage with the organization’s existing business context and culture. Crossing the need for change based on the context and the cultural readiness for change can help you decide whether to Assimilate, Converge and Evolve (fast or slow), or Shock.