Archive for 'Intangible asset focused company culture.'
Michael D, Moberly April 26, 2017 ‘A business intangible asset blog where attention span really matters’.
I suspect that, not unlike numerous other skill set rich professions, e.g., those who have achieved operational level familiarity with IA’s (intangible assets), which they have stewardship, oversight, and management responsibility, are quick to recognize circumstances when a (business) pundit and/or alleged SME (subject matter expert) weigh in on matters, i.e., IA’s, for example, that exceed their knowledge base, i.e., is generalized, absent specifics, misleading, or simply incorrect.
When a pundit speciously characterizes an under-performing business transaction, etc., as merely being a consequence of (irrelevant, un-connected) missteps, miscues, or oversights by an individual or a management team, I find this especially frustrating, and certainly a disservice. In part, that’s because my work has been occasionally construed as ‘michael claytonish’ (a film titled ‘Michael Clayton’ played by George Clooney) ala ‘an IA fixer’.
Not infrequently, when a particularly challenging and/or insolent business transaction is undertaken and then reviewed by a competent and objective IA strategist and risk specialist, it will be revealed that a key – underlying reason for under-performance, transaction withdraw, or failure is variously attributable to operational – circumstantial unfamiliarity with, how, when, why, where, and which IA’s were in play but, not acted on effectively, lucratively, or competitively, or worse, insufficiently safeguarded or risks monitored and mitigated.
In short, the planning and execution of an under-performing transaction, its failure, or, one or both parties electing to ‘walk away’ can be variously attributed to unfamiliarity, operationally speaking, with the IA’s in play.
To be sure, IA unfamiliarity, which frequently translates as omitting IA’s from transaction planning, leaves their contributory role and value, sources of revenue, and competitiveness (irreversibly) out of a business transaction’s ‘go, no go’ equation, and ‘off the transaction negotiating table’. Thus, the dominant drivers and ‘underwriters’ to most every business transaction, i.e., the IA’s which are-will inevitably be in play, become vulnerable to various types-levels of risk, e.g., competitive advantage under-mining, rapid erosion of (asset) value, and/or asset compromises. Any one, or multiples of such risks, can negate or substantially minimize any projected-desired outcome to a transaction, regardless of its stage of execution.
To be sure, challenges associated with resolving business process problems and/or poorly planned-executed transactions that stem from unfamiliarity with or not recognizing IA’s in play are, in many instances, redeemable. Through numerous engagements, I have concluded many such challenges are variously due to IA’s being ‘non-physical’ and therefore, outside conventional-human senses, i.e., see, hear, touch, smell, etc. Consequently, this (asset) ‘intangibility’ combined with the reality, IA’s are seldom, if ever reported on conventional financial statements or balance sheets, somewhat understandably, influences business leadership and management teams to exhibit hesitancy and reluctance to consider IA’s as relevant players and/or contributors to company value, competitiveness, revenue, or sustainability.
This author’s forthcoming book respectfully mitigates most, if not all such reluctance and hesitancy by ensuring thorough, relevant, and practical explanations and rationales are in place to address the various contexts – circumstances in which IA’s are in play through their contributory role and value.
It is true, a percentage of business leadership, remain variously dismissive and under-appreciative of IA’s, i.e., what they are, and how to utilize (exploit) them effectively lucratively, and competitively, in other words, their contributory role, value, and competitive advantages they can, and often do produce. Not so coincidentally then, when IA’s are treated dismissively or wholly neglected, their contributory value will be significantly weakened, conceded to competitors, or relegated to the non-denominational and virtually unusable ‘catch-all’ of goodwill.
Either way, I find there is no single mechanism to overcome these real and detrimental shortcomings, aside from seeking – achieving operational level familiarity with IA’s for which one has control, use, ownership, and (fiduciary) responsibility to safeguard, exploit, monetize.
Consistently however, practitioners that possess operational familiarity with their various IA’s in play to a transaction or initiative, i.e., as direct components – contributors to projected value, revenue, competitive advantages, and marketing and branding outcomes, also recognize – have operational insights about how IA’s have direct bearing on company value and revenue, which extends well beyond merely what’s posted on conventional financial statements and balance sheets.
The position conveyed here, and throughout my forthcoming book, is that exclusive reliance on conventional financial statements and balance sheets as strategic oracles for business operation and transaction planning, but, absent factoring essential IA-related data, will likely lead to arbitrary, subjective, and unsystematic tracts for execution. However, with the rapid expansion of effective, competitive, and lucrative business operability, i.e., IA intensity and dependency, provides credence and rationale due for business leadership and management teams to recognize IA’s contributory role and value, which this book and this author consistently argue, are warranted.
Michael D. Moberly August 24, 2016 ‘A blog intersecting intangible assets and business’.
A company initiating, or even contemplating, a M&A (merger or acquisition) would be well served today if a ‘company culture assessment’ was included in their due diligence strategy!
The primary reason of course, as consistently conveyed at this blog, is the economic fact that 80+% of most company’s value, sources of revenue, and ‘building blocks’ for growth, profitability, and sustainability lie in or directly evolve from IA’s (intangible assets), which company culture is a prime example. It’s correct to assume then, that a substantial factor in the rationale of the initiator evolves around acquiring and then merging specific IA’s which the target firm presumably has already developed, and exist in some specialized form of intellectual, structural, and/or relationship capital.
From an operational perspective, intellectual and structural capital constitutes the knowhow and processes which underlie – are embedded in the target company’s means for generating revenue, competitive advantages, and creating efficiencies, etc. So, in M&A transactions, acquiring full and unimpeded control and use of these contributory IA’s represents the critical step toward realizing-maximizing the projected (anticipated, desired) outcomes.
To the uninitiated, a target company’s operational culture may be overlooked, dismissed, or even deemed irrelevant to a transactions’ projected outcome. It’s unwise for due diligence teams to assume, that should a proposed M&A transaction or strategic alliance, etc., be executed, the relevant-targeted IA’s will be wholly transferable or remain fully operable. Hence the prudence for transaction – due diligent management teams to assess – determine whether the IA’s being sought can remain intact. In short, can embedded IA’s originating-developed in one company be transferrable and operationally replicable in another company.
More specifically, transaction management – due diligence teams would be well advised to objectively study-assess the targeted company’s operating culture in personnel and temperament contexts. An objective is to determine if those (company) culture factors can readily (and rapidly) integrate and bond with the initiating company, its employees, and stakeholders? Grant McCracken, a well-known and experienced personality in this arena suggests company cultures are internal versions of a company’s brand. That’s largely attributable to a broader recognition of the reality that company culture generally encompasses its mission, vision, and values.
Understanding in advance, how company culture can impact a business, e.g., “culture is a company’s last mile” (McCracken). If believed, and I do, it makes a very compelling case that a company’s culture is marketing’s proverbial – millennial ‘silver bullet’. Certainly, no disagreement here!
But, before embarking on a company culture assessment (Margaret Mehta) the target company should be distinguished on several cultural dimensions. In a perfect world, there should be no resistance to company culture assessment as an integral component to most any transaction’s due diligence. The key is that due diligence teams are operationally familiar with the characteristics and features of company’s culture as unique convergence of IA’s, i.e., intellectual, structural, and relationship capital.
The deep and necessary insight that a company culture assessment (due diligence) brings to transaction management and oversight, in essence, prescribes a strategic path how (culture) performance will be replicated. But, transaction management (due diligence) teams should also recognize that culture performance is also a measurement mechanism that drives employee behavior.
So, if there are particular aspects of a target company’s culture that appear undesirable, non-transferrable, or un-yielding to adaptation-replication and therefore impede a transactions projected milestones for success, this should be clarified. Obviously, I am a strong advocate of conducting company culture due diligence for most any business transaction while recognizing standing alone, culture alignment may not be the singular guarantee to a successful and profitable transaction outcome.
.This post was inspired and adapted by Michael D. Moberly from the fine work authored by Monica Mehta in a February 2009 piece in Profit and Profit Online.
Michael D. Moberly July 19, 2016 ‘A blog where attention span really matters’!
At what point do well orchestrated and choreographed vignettes at national political conventions manifest as assurances of voter perceptions?
Both political conventions, Republican this week, Democrat the following week, will, through focused grouped and timely social engineering techniques seek to deliver attractive intangible caricatures of their respective party’s presidential candidate.
It is fascinating to observe another national political convention dominated by technically enhanced-choreographed visuals and adulterated words that collectively, could correctly be characterized as an enormous 4-day long intangible. Whereby, a national political conventions’ primary objective is to affirm candidates’ presumptive (so-called) brand, image, persona, and bona fides for office. And, execute it in such a way to implant appealing perceptions (intangibles) intended to attract undecideds, appeal to opponents’ supporters, and perhaps, bring clarity to candidates’ positions on matters they and their advisors deem are of import to the American people, all-the-while endeavoring to further distinguish themselves from their opponent.
If this sounds eerily like an infinitely looped version of a ‘super bowl’ halftime commercial, you may be right.
In politics, intangibles can be personal achievements, character, and oratory, etc., that translate as understandable and distinguishable assets which candidates and/or PAC’s can exploit at will, ala affixing (licensing) the name ‘Trump’ as an intangible to the very tangible steak, wine, golf resort, hotel, or building.
Michael D. Moberly May 20, 2016 ‘A blog where attention span really matters’!
A company’s culture, and its management, are two of many ‘intangibles’ that play increasingly pivotal roles in – contributions to (company) performance, retention, and sustainability, among other things. The credibility-validity of this perspective lie in the findings of numerous studies/surveys commissioned-undertaken by professional associations and academia not unlike a Society for Human Resource Management (SHRM), survey, circa 2012, which asked HR (human resource) leaders to identify significant ‘workforce management and staffing challenges’, which 770 respondents identified…
• employee engagement
• employee retention
• effective performance management
• employee recruitment, and
• company culture management
To some, this survey example, may appear dated, especially if considered in the context of today’s increasingly entrepreneurial and go fast, go hard, go global business environment. To be sure, the commonality of findings, replicated – validated through numerous other studies/surveys and, whether taken individually or collectively, are indeed instructive. Preferably, they have and will continue to influence business leaders and management teams to conclude that devoting time, energy, and yes, some resources to developing and sustaining a relevant-intelligent (company) culture will deliver measurable positive returns. So, no rocket science here, a company (sector relevant) culture is a prized and measurable achievement and powerful contributor to performance, competitiveness, value, and, of course, brand.
A company culture…whereby employees, management teams, c-suites, and boards alike, are collectively committed to sustaining a principled base of intellectual, structural, relationship, and competitive capital ala IA’s (intangible assets).
This reality manifests in the economic fact that 80+% of most company’s value, sources of revenue, and ‘building blocks’ for growth, profitability, and sustainability today lie in – evolve directly from IA’s, of which company culture is a potent example. It’s certainly not a stretch then for experienced business leaders to also conclude that a principled and consistent company culture can, and frequently does, serve as a catalyst for internalizing and enhancing other IA’s among them being, employee engagement, retention, performance, as well as attracting – recruiting new employees.
What is a company culture…?
Based on the fine work of Dr. Edgar Schein, a company culture consists of progressive stages that observably emerge, that is, if one looks for them, i.e.,
• employees (collectively) recognize and begin to act on a shared system of values, norms, beliefs, and attitudes that defines and clarifies what is important.
• employees at all levels recognize they learn as they’re solving problems and, if the problem solving methodologies work well enough, employees will consider them valid and worthy of being taught and passed along to new employees, because…
• they represent the correct way to perceive, think, and feel in relation to addressing (internal, external) problems that their company routinely face, which, in turn, leads to efficiencies, competitive advantages, and reputational value, etc. (Adapted by Michael D. Moberly from the work of Dr. Edgar Shein)
For most companies, the initial step in developing a principled company culture involves…
• determining what attitudes and beliefs need to (should) be established, and
• having a clear understanding how those attitudes and beliefs can translate (become operational) as sector-business relevant behaviors on an enterprise-wide basis.
Transferability of company culture…
As aptly pointed out by Dr. Kenan Jarboe in his Athena Alliance monograph appropriately titled ‘Intangible Asset Monetization: The Promise and the Reality’, there are six factors considered by financial markets (i.e., asset buyers, sellers, and investors) with respect to determining the ‘suitability’ of an (intangible) asset. Of those six factors, one is an assets’ transferability. In other words, is a ‘company’s culture transferrable? Or is it so (company, business unit) specific that would make its replication and/or sustainability challenging should any base changes occur?
Unfortunately, the contributory value of a company culture seldom, if ever, appears on management teams’ conventional mba oriented dashboards, in part, I believe, because those dashboards remain largely focused on tangible (physical) assets vs. intangible (non-physical) assets, i.e., company culture.
Too, for some management teams, c-suites, and boards, a principled company culture, remains somewhat of a managerial, financial, and competitive advantage mystery in terms of understanding how best to utilize – exploit this increasingly influential and catalystic asset.
A much desired objective of course, is to build a resilient, self-perpetuating, and principled company culture that is readily scalable and supports development-acquisition of intellectual structural, relationship, and creative capital to consistently deliver measurable performance and returns.
Of course, building a principled company culture today, is seldom something which evolves exclusively in a top-down fashion and as such, it is seldom a characteristic wholly owned and executed by a management team or c-suite. Instead, a well-grounded and principled company culture provides permanence, depth, and confidence among employees and their abilities. (Jennifer King, Software Advice Blog)
Michael D. Moberly January 29, 2016 ‘A business blog where attention span really matters’!
A well developed and respectfully monitored company culture is an intangible asset which, when permitted, produce-deliver very tangible returns! Essentially, a company culture exists when an (intangible) environment is created whereby employees recognize and are generally and willingly accommodating to particular configurations – arrangements of attitudinal and behavioral expectations, i.e., a like-mindedness.Numerous individuals with presumed expertise – experience in company culture building, go so far as to say, culture reflects a company’s soul, which perhaps in today’s context, translates more as a substantial contributor – component to brand.
As an IA strategist and risk specialist, I make no apologies for my advocacy of ethical company cultures. Investments of thought, time, and energy to develop, integrate, and sustain a company culture are routinely wise – prudent investments.
On the other hand, of course, when company cultures are neglected, ignored, or dismissed as irrelevant, or absent consistent and respectful nurturing and monitoring, it’s likely some type of culture will evolve anyway, perhaps not one intended or preferred, but, it will come to exist. In other words, the (company) culture that does evolve in such circumstances may do so in ways that are not particularly helpful to the company, its mission, or consumers it wishes to attract. Yes, a cultureless company can manifest in many different ways, but certainly not all leading to financial – competitive doom. My experiences – observations do point, with some confidence, a purposefully cultureless company is likely to be substantially more draining-taxing on management team’s time and energy to referee, moderate, and/or remediate relatively mundane issues that would otherwise likely accommodate themselves through personnel (cultural) expectations.
From a financial perspective, David Lupin, and many others, including this IA strategist, suggest, investing in (company) culture building is comparatively low-cost and comes with a favorable probability that a company doing so will experience measurable long term economic and competitive advantage returns. While a company culture, like other IA’s, is not necessarily subject to one’s conventional senses, most all know when it is present, absent, or needs remediation.
Worthy takeaways to this post are…
- ensuring a mission relevant, effective, and ethical company culture exists, and
- it is measurably convertible to value.
Mr. Moberly is an intangible asset strategist and risk specialist and author of ‘Safeguarding Intangible Assets’ published by Elsevier in 2014, firstname.lastname@example.org View Mr. Moberly’s videos on YouTube at ‘safeguarding intangible assets’ or his CNN and CNBC videos at his webpage http://kpstrat.com
Michael D. Moberly December 28, 2015 ‘A business blog where attention span really matters’.
I began researching, publishing, conducting seminars, and consulting 20+ years ago on an array of issues related to identifying, assessing, monetizing-utilizing, and mitigating risks to organization’s IA’s (intangible assets). Throughout this period I have had the good fortune of consistently engaging phenomenal decision makers, a percentage of which at first blush anyway, express satisfaction in assuming their organization functions very nicely thank you, as is, even though their operating practices are clearly rooted in the pre-IA era. In other words, they exhibit little overt interest in the change, possibly disruption, they assume would accompany engaging their IA’s.
Those otherwise successful business decision makers – leaders convey dismissive indifference-un-curiosity about capturing and exploiting IA value, i.e., as sources of revenue, competitive advantage, and sustainability. Ironically, much of which is already present – embedded in organization operating culture, merely awaiting exploitation. Fortunately, I find only the most intractable few will sustain such dismissive positions following my engaging them in a respectful discussion, or, learn a key competitor’s advances are attributed to utilizing their IA’s.
I realize in some instances, the dismissiveness – reluctance a decision maker may be exhibiting insofar as engaging their IA’s is rooted in unfamiliarity and/or concern that doing so…
- may exceed their leadership and decision making comfort zone.
- may be too (organizationally, culturally) disruptive, costly, and time consuming.
- necessitates more clarity regarding organizational benefits, i.e., competitiveness and returns.
- will be interpreted as being futile because IA’s are seldom, if ever, reported on conventional balance sheets or financial statements.
For the reluctant, it’s worthy to note again, it is an irreversible economic fact today that 80+% of most organizations value, sources of revenue, competitiveness, and sustainability lie in – evolve directly from IA’s. Organization decision makers are therefore respectfully encouraged to not merely acknowledge their intangible assets, rather commence an effective strategy for their utilization and exploitation. (Readers may find other posts helpful.)
Mr. Moberly is an intangible asset strategist and risk specialist and author of ‘Safeguarding Intangible Assets’ published by Elsevier in 2014.
Michael D. Moberly November 17, 2014 ‘A blog where attention span really matters’!
‘One cannot solve a problem with the same mindset that created it in the first place.’ (Albert Einstein)
Frugal innovation is much more than a mere twist to a previous strategy. In fact, frugal innovation transcends the much clichéd paradox of ‘doing more with less’. Frugal innovators generate business and social value (intangible assets) through more effective – efficient use of limited and/or scarce resources.
Frugal innovation is now expanding at a time when companies are more receptive to commitments to ecologically enlightened consumers and governments to create products and services synchronized with (a.) affordability, (b.) sustainability, and (c.) quality.
Frugal innovators embody a strong sense of managerial flexibility that do not characterize resource constraints or evolving preferences of consumers as being singularly insurmountable or necessarily incapacitating. Instead, frugal innovation advocates view these circumstances as potential opportunities – paths for growth. In other words, minimal/scarce resources can serve as catalysts for frugal innovators to resolve such challenges through their proclivity to be innovative.
Frugal innovation, the secret weapon of emerging markets…
Carlos Ghosn is credited with coining the term ‘frugal engineering’ having been inspired by Indian engineers’ ability to innovate cost-effectively (and swiftly) under extreme resource constraints. Emerging market countries such as India, China, Africa, and Brazil are representative breeding grounds for frugal innovation.
In these countries, creatively minded entrepreneurs are innovating in resource-constrained environments to create ‘frugal solutions’ that deliver more value to customers at lower cost. Innovators accomplish this by assuming a distinctive mindset called ‘jugaad’ which is a Hindi word meaning an ‘innovative fix or an improvised solution born from ingenuity and cleverness’ that enables…
- recognizing opportunities in adverse circumstances, situations, and then
- concocting (frugal) solutions using minimal resources.
Examples of frugal innovation include…
- M-PESA is a service that enables millions of Kenyans to save, spend, and transfer money using their cell phones without having a bank account…
- SELCO provides solar energy at very low prices to over 125,000 households in remote Indian villages, debunking the myth that poor people can’t afford clean technology…
- an Argentinian farmer with dual challenges of scarcity of land, and skilled labor, and successfully dealt with both by subcontracting his farming work to networks of small firms, and scaling up his ‘asset-light’ business model to boost his agricultural output without adding more resources or tangible assets.
Shifting the west’s corporate mindset…
In the West, when management teams face significant challenges and/or lack resources to fully execute a project, there may be a tendency to surrender too quickly. In the end, frugal innovation is not merely different way of innovating or new way of operating a business rather, it’s about fundamentally shifting one’s managerial – operational mindset.
Inspiration for this post is ‘Reverse Innovation” a book written by Vijay Govindarajan and Chris Trimble, and “Jugaad Innovation” by Navi Radjou, Jaideep Prabhu and Simone Ahuja
Michael D. Moberly January 10, 2014 A blog where attention span really matters!
David Lapin projects the next big wave of growth in business will come from businesses whose leaders and management team members know how to convert this low-cost intangible asset, i.e., company culture, into high bottom-line value!
Investing in building and nurturing a company’s culture is the wisest investment any business leader or management team can make! Financially, it is a low-cost investment with a high probability of economic – competitive advantage returns.
A company’s culture is somewhat akin to a garden, that is, a culture will develop whether or not business leaders or management teams put forth the time and effort to actually design it.
So, like the garden analogy above, if a company’s culture is ignored or neglected, that is, absent regular management, oversight, and nurturing, it’s very likely it will continue to grow regardless, but probably not as intended or preferred and in ways which are not particularly helpful to the company and its mission. Adverse examples of this include inhibiting innovation or manifesting as employee under-performance. Company cultures that evolve in this manner are said to be akin to an ‘invisible force’ that can not only undermine company – employee productivity but sap leader’s energy.
Cultivating a positive company culture…
Let there be no question, developing, cultivating, and sustaining a desired company culture requires thought, wisdom, time, and some intellectual curiosity and emotional investment to understand what motivates employees to perform consistently well, even beyond expectations. I am respectfully confident there is no specific, one-size-fits-all methodology or strategy to achieve this, but there is ample anecdotal evidence and examples that ‘good to great’ leaders do pay attention to it.
As David Lapin pointed out in his research, an authentic (company) culture is something competitors will find challenging if not impossible to imitate. And yes readers, company culture is an intangible asset which, in most instances, can be commoditized and converted to real value. In fact, David Lapin projects the next big wave of growth in business will come from businesses whose leaders and management team members know how to convert this low-cost intangible asset, i.e., company culture, into high bottom-line value.
The knowledge-based global economy has allowed many leaders and managers to acquire a better understanding and appreciation for ‘home grown’ intangible assets like intellectual, structural, and relationship capital and their potential for conversion as specialized commodities into value, revenue, reputation, and goodwill, etc.
Many would agree with the view that Southwest Airlines (headquartered in Phoenix, Arizona) is a prime example of a leaders’ ability to not only create a very open and transparent company culture, but also turn the intangibles emanating from this culture into commodities with substantial monetary value.
Southwest Airlines has long been a dominant player, particularly upon airline deregulation occurred in the U.S. and now in the ever shrinking (merging) U.S.-based airline industry. For SWA’s their growth was in part due to its operating culture built upon genuine efficiencies, e.g., flying only one model of aircraft, creating a no-frill travel experience, no food service or pre-assigned seating. Ultimately SWA stripped most of these ‘tangible commodities’ associated with conventional airline travel. In return, SWA’s customers received something of relatively equal value in return, at least in the eyes of their growing number of customers that is, a good flying experience underwritten by a culture embedded with intangible assets, i.e., joke telling entertainment from flight attendants coupled with a felt sense of care that apparently compensated for any loss of those ‘tangible commodities’, i.e., complimentary food and beverage service for one.
There are three well known secrets that underlie SWA’s travel experience and its overall financial success since its inception, i.e., (1.) the company and its leader, ala Herb Kelleher built a culture that incorporated the properties of fun, entertainment, and felt care became embedded in the company’s core, (2.) the culture had to feel authentic and genuine by passengers, and (3.) SWA had to be able to convert its now intangible asset based company culture into tangible benefits, including market share growth which, as we know, it did.
Numerous business schools today use SWA and its founder Herb Kelleher as a case study of commoditizing a company culture and its intangible competitive advantages balanced with tangible operational efficiencies.
While SWA was investing in and building its intangible asset based company culture, numerous competitors were cutting financial corners that indeed reduced costs that frequently eroded their own culture. Kelleher and SWA, on the other hand, only cut those (financial) corners which the y presumably believed would have little or no impact on the culture they were building and a passengers’ overall travel experience. In fact, SWA continued to invest more in its culture even during periods when the airline industry, as a whole, was struggling. Kelleher and SWA management teams obviously recognized safe and on-time flights for passengers were, in essence, common commodities that competitors also provided to their passengers.
So, for SWA to be competitive in a deregulated environment, Kelleher and his management team purposefully built a company culture that would offer ‘intangibles’ that competitors couldn’t or wouldn’t.
The intangibles SWA’s culture began offering became well publicized differentiators that were embedded in the company’s values rather than directly in its products, processes, or structures. Products, processes, and structure, it’s said, Kelleher recognized could and would be copied, but intangible assets such as an authentic company culture cannot be readily copied providing it is genuinely embedded in company and employee values.
Any company can build its own culture; one that is unique and innate to its people and strategic objectives. But when a company tries to copy another company’s culture they quickly find it difficult, if not impossible to replicate. Numerous SWA competitors have tried, over the years, to imitate those SWA, but, most all fell short, generally it’s assumed, because they were unable, for whatever reason, to embed it in company – employee values.
Admittedly, I never had the opportunity or pleasure of making Mr. Kellehers’ acquaintance. I did however regularly fly on SWA in it earliest days, not for its’, at the time, emerging culture, rather because (a.) it was less expensive, and (b.) I didn’t mind its business model of securing gates at first generation airports, which in many instances were actually closer to city centers’.
Professionally speaking, I’m unclear whether SWA’s company culture, which in my recollection became obvious and noticeable, from a passenger perspective, beginning in the mid-1980’s and continuing through much of the 1990’s. Was this culture a well thought through component of Kelleher’s ‘grand plan’, or was it like most other company cultures which appear and grow by accident or merely good luck? Frankly, what makes me slightly skeptical is the now common relationship between intangible assets and company culture only slowly acquired traction in business operations following the publication of the Brookings Institute’s report (study) on intangibles in late 1990’s.
There is absolutely no question that Kelleher was the ‘dynamic’ driving SWA’s rapid growth and passenger satisfaction, which in part was due to the company culture that evolved.
This post was inspired by David Lapin’s book ‘Lead by Greatness, Character, Success’ published by Avoda Books, 2012.
Comments regarding my blog posts are encouraged and respected. Should a reader elect to utilize all or a portion of my posts, full attribution is expected and appreciated. While visiting my blog readers are encouraged to browse other topics (posts) which may be relevant to their circumstance or business transaction. I always welcome your inquiry at 314-440-3593 or email@example.com.
Michael D. Moberly January 8, 2014 ‘A blog where attention span matters!’
I assume many readers of this blog are like me, that is, we only periodically give the notion of ‘company culture’ much genuine thought. But, if asked, we could readily utter a sufficient number of adjectives, adverbs, and nouns that, once organized, would paint a fairly detailed operational portrait of our employer that would reveal the intricacies of our employer’s (company) culture.
I respectfully suspect however, individuals who are unfamiliar with my blogs’ overall mission may omit from their (company culture) descriptive’ the fact that company culture is a powerful and generally valuable intangible asset.
So, while we may understand how a company culture should be conveyed, many of us may not realize how important company culture has become in today’s businesses, as a valuable contributor – underlier to sources of revenue, competitive advantages, and overall sustainability.
In their new book titled Rise of the DEO: Leadership by Design, Maria Giudice and Christopher Ireland explain their view of the importance for companies to have a ‘design executive officer’ in the place. Of the six defining characteristics which Giudice and Ireland believe DEO’s should possess, I believe a particularly relevant one is being a ‘systems thinker’ which they define in the following context which I have taken the liberty of adapting somewhat…
“despite their desire to disrupt and take risks, DEOs understand the interconnectedness of the work environment as a whole, that is, they recognize each part of the organization (probably) overlaps and influences other parts of the organization. They also recognize unseen connections, that surround what’s actually visible within acompany which helps give their disruptions intended, rather than chaotic, impact and makes their risk taking more conscious…”
More specifically, Giudice and Ireland suggest that business leaders who actually understand the transformative power and influence of a company culture (design) and embrace and engage its characteristics will lead in times of change. Thus, as noted countless times in this blog, the economic fact that 80+% of most company’s globally, their value, sources of revenue, and ‘building blocks’ for growth, profitability, and sustainability either lie in or evolve directly from intangible (not tangible) assets, constitutes change, and leading that (economic, business) culture change is not merely important, it’s a necessity!
In many respects, Giudice and Ireland’s 2013 book, Rise of the DEO: Leadership by Design, describe, the qualities, many through examples, which they believe ‘a new breed’ of business management team leaders should possess which I do not disagree insofar as have a ‘design’ for purposefully identifying, unraveling, and engaging their intangible assets. In other words, elevating the operational familiarity of the current, as well as the on-coming generation of company management teams to the sometimes disruptive strategies necessary to fully utilize and exploit their intangible assets.
This post was dually inspired by Marissa Brassfields Ridiculously Efficient’ blog post of December 24, 2013 and the authors Maria Giudice and Christopher Ireland for their very intriguing 2013 book titled, Rise of the DEO: Leadership By Design.
- This blog post, as usual, is researched and written by me with the genuine intent it serve as a useful and respectful medium to elevate awareness and appreciation for a wide range of issues related to intangible assets within the global business community. My posts are not intended to be quick bites of unsubstantiated commentary.
- Comments regarding my blog posts are encouraged and respected. Should a reader elect to utilize all or a portion of my posts, full attribution is expected and appreciated. While visiting my blog readers are encouraged to browse other topics (posts) which may be relevant to their circumstance or business transaction. I always welcome your inquiry at 314-440-3593 or firstname.lastname@example.org.
Michael D. Moberly December 30, 2013 ‘A blog where attention span matters’.
Company culture analogies…
Not unlike the landmark pornography case in 1964 (Jacobellis v. Ohio) when U.S. Supreme Court Justice Potter Stewart famous utterance of a rather non-rational perspective insofar as judicial decision making, which I now paraphrase, “I don’t know precisely how to define it (pornography) but I know it when I see it:.
In many respects, Justice Potter’s perspective is quite similar to the way that company culture is often characterized, e.g., as somewhat of an invisible (intangible) temperament and/or attitude that links companies, employees, and stakeholders together.
Similarly, but more definitively, and some years later, in 2006, Mark Fields, Ford Motor Company’s President of the America’s, who has been credited with initiating a culture change at Ford, certainly elevated the prominence of a phrase widely attributed to Peter Drucker, i.e., “culture eats strategy for breakfast” which I understand was framed and hung on the wall of FMC’s so-called ‘war room’.
The dominant task Field engaged in at Ford with respect to initiating a culture change was to…
- replace a culture (work environment) that had come to be routinely characterized with terms such as bitterness, distrust, fear, and betrayal, etc.,
- develop a culture that would come to be characterized with different terms such as creativity, innovation, and (employee) sense of responsibility.
Readers familiar with the American auto industry however, surely understand that the culture reversal that took place at Ford, under Field’s tutelage, or any U.S.-based automaker for that matter, is often fragile and linked to collective bargaining agreements.
There is certainly no intent here to minimize Mr. Fields efforts as I’m confident his advocacy served as both impetus and rallying point to achieve the sought after culture change. But, it’s important to recognize that large scale (enterprise wide) culture changes are seldom the product of a single individual’s efforts. And yes, Ford, like other U.S. carmakers at the time, were approaching their own respective ‘fiscal cliffs’ which no doubt served to bring about a greater than usual sense of receptivity and urgency to accept change. Recognizing that if substantial (cultural) change was not forthcoming and in fairly rapid order, those fiscal cliffs would be more than metaphors, they would, in many experts’ view, materialize as irreversible catastrophes to the U.S. auto industry as a whole.
Company culture is an internal version of a company brand, or a company’s last mile…
A company’s culture, Grant McCracken points out, is an ‘internal version of a company brand’ because it encompasses a company’s mission, vision, and its values. McCracken is one, among several prominent ‘company culture advocates’ who articulates how an effective (company) culture can impact a business.
McCracken makes a compelling case that ‘company culture may well be marketing’s silver bullet’ inasmuch as culture is at the intersection of commerce, anthropology, and business economics’.
Company culture is a valuable intangible asset…
I have long argued, presumably like McCracken, that a well designed, honed, and monitored (company) culture can produce ‘contributory value’ to many different aspects, venues, and transactions that any company may engage.
I recognize that any initiative, sometimes regardless of its motivation, putting forth the time, resources, and effort to develop and instill a sustainable change to a company’s culture will incur various challenges and hurdles, not the least of which is re-directing long embedded beliefs and back-channel habits which can elevate the probability of failure.
I find such circumstances especially significant when there is no internal champion or compelling rationale for change, i.e.…
- a clear understanding of a company’s intangible assets, of which company culture is one.
- a strategic appreciation for the implications that a culture change will, in most instances, bring to a business.
- tested strategies in which to leverage, exploit, and/or market a company’s culture change once it has been achieved in financial contexts.
So, a company management team that is unable to effectively promote its culture internally, will also experience challenges defining and promoting its brand externally. In part, this may be due to some of the skill sets expected of management teams today which are related to company profitability and sustainability, are not necessarily skills that coincide with initiating, valuing, managing, and monitoring changes in company culture.
While I do not consider myself to be a ‘company culture’ expert, I have held numerous positions of leadership and management which allow me to state with confidence…
- a company’s culture can be a useful and influential intangible asset that can deliver substantial value and competitive advantages to any company and most any transaction and/or venue, be it large or small.
- the above is largely dependent on management teams, employees, and stakeholders believing it, i.e., the culture is favorably recognized as delivering intangible value.
Probably the two most significant errors made in characterizing a company’s culture, McCracken notes in his book ‘Chief Culture Officer: How To Create A Living, Breathing Corporation’ are…
- presuming a company culture evolves from the presence of a single individual, and
- that an individuals’ personality is synonymous with an organization’s culture.
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