“Strong” Business Culture is about “Alignment”

Let’s take a moment to define what a ‘strong culture’ means. Here’s what it doesn’t mean:

  • Foosball tables and happy hours
  • Free food
  • One big party
  • All fun, all the time
  • A culture just like Zappos, Netflix, JetBlue, Google or anyone else

A strong culture is all about alignment. Alignment of everything! From the vision you’re all trying to realize and the values that actually dictate team member behaviors, to the go-to-market strategy and objectives, to the way you measure and reward performance – all must be aligned. A strong culture is the environment created through this alignment ..

The golden age of the Western corporation may be coming to an end

The golden age of the Western corporation, they argue, was the product of two benign developments: the globalisation of markets and, as a result, the reduction of costs. The global labour force has expanded by some 1.2 billion since 1980, with the new workers largely coming from emerging economies. Corporate-tax rates across the OECD, a club of mostly rich countries, have fallen by as much as half in that period. And the price of most commodities is down in real terms.

Now a more difficult era is beginning. More than twice as many multinationals are operating today as in 1990, making for more competition. Margins are being squeezed and the volatility of profits is growing. The average variance in returns to capital for North American firms is more than 60% higher today than it was in 1965-1980. MGI predicts that corporate profits may fall from 10% of global GDP to about 8% in a decade’s time.

.. How can Western companies navigate these threats to their rule? MGI advises them to focus on the one realm where they continue to have a comparative advantage—the realm of ideas. Many companies in labour- and capital-intensive industries have been slaughtered by foreign competitors, whereas idea-intensive firms—not just companies in obvious markets such as the media, finance and pharmaceuticals, but in areas such as logistics and luxury cars—continue to flourish. The “idea sector”, as MGI defines it, accounts for 31% of profits generated by Western companies, compared with 17% in 1999.

 

 

Giving More Corporate Chiefs the Steve Jobs Treatment

I admired the film’s effort to capture both the complexities of Mr. Jobs’s personality and the relationship between his professional and private lives.

There are very few books like this written, and I think it has an effect on the way business leaders manage their enterprises. Most observers attribute a chief executive’s short-term orientation to the pressures of capital markets or the lure of market-based incentive compensation, and I agree these are powerful forces.

But there are also quieter, inner-directed, psychological forces that play a role in C.E.O.s’ managerial myopia. I believe the outside world’s limited interest in making long-term evaluations of business leaders’ legacies is one factor that leads them to prioritize the here and now over the long term.

Like political leaders, every business leader thinks about — and should think about — his or her legacy

.. Business leaders can take no such comfort, because in their world this re-examination rarely happens. Once they leave office, even the best-known business leaders are quickly forgotten. Last year in my commencement address, I had planned to refer to Lee Iacocca, who wrote a best-selling memoir of the turnaround he led at Chrysler in the early 1980s. My staff talked me out of it: They argued that today, more than 20 years after his retirement, many M.B.A. students may have no idea who Mr. Iacocca is.

.. Today many of the brightest M.B.A.s may know little of Thomas Watson or even Andrew Carnegie.

Against this backdrop, it’s only natural for business leaders to want to manage in a way that allows them to enjoy the fruits of their efforts during their time in the job — and to make decisions that cause the company to be successful now, while they’re leading it, instead of tomorrow, when hardly anyone will remember that they led it.