In my last post, I discussed the idea that a shared vision impacts on:
– How people communicate and relate;
– What we all value and pass on; and
– How companies achieve their vision.
The structures and systems we have in place convey subliminal, yet powerful, messages about how we communicate this vision through the culture we create. When these elements don’t quite link with your firm’s espoused vision, we allow confusion to start creeping in. At the same time, things can become much more difficult throughout the whole of your organization.
All three—power structures, organizational structures, and control systems are interlinked. And they all send a message.
Here are some ways this can happen.
Often, competing companies have similar visions. And this is natural. After all, we’re usually aiming to be a ‘leading provider’ or ‘the best’ in something or another. But excelling and outstripping the competition means something different in each sector, industry, or field. Which is why a clear vision usually goes a little bit further.
A good example is Toyota’s company vision, which embeds clear values alongside the main goal of “enriching lives around the world”. These include:
– Commitment to quality;
– Constant innovation; and
– Respect for the planet.
Then there are the company’s organizational structures. Within one giant MNC, we have geographic divisions for each of Toyota’s established (and growing) markets. This allows for some distributed decision-making, and within each area, it’s possible for teams to develop innovative products that are relevant to each market. Adaptive, locally responsive, and conducive to growth in the most competitive ways possible.
What wouldn’t work? Probably a functional system, with all of Toyota’s designers working together, far away from their related marketing teams. Does that sound ridiculous? Again, probably—but it can happen very slowly, over long periods of time, which is why it sometimes helps to get an outsider’s perspective on things.
It’s easy, then, to see how power structures are related to our organizational set-ups. Within each organization—and not just Toyota—we use communication (in some form or another) to keep things running smoothly. Depending on your vision, once again, these can hinder or facilitate your organizational efforts.
If your vision is to innovate, you may want to encourage rapid cross-fertilization of ideas. You’ll want your design team to bounce ideas off the marketing team as quickly as possible to get traction for good ideas. And you’ll probably not want a control system where one minimum viable product needs approval from seven layers of globally-dispersed hierarchy. Because you’d be beaten to market in no time.
An important thing to remember is that not all power structures are formal. Often, informal power structures can mirror the older, formal systems that once were until a new formal structure really comes to life.
We also often see other, less formalized reporting systems that can be ingrained, and which occur in practice alongside—or counter to—what’s officially documented. For example, a company’s CEO may be officially at the head of things, but decision-making processes require a CFO to sign things off. He or she, in turn, may be doing so in response to pressures from other stakeholders, perhaps more risk-averse. A misalignment between formal and informal power structures can do considerable damage to a firm’s ability to adapt swiftly.
The control systems at your organization are the processes and procedures that aim to keep things functioning properly. Often, however, they become a means of reinforcing or discouraging specific outcomes. KPIs or financial incentives, for instance, can be a very direct means of steering behavior.
In my experience, control systems are probably the most important element of the Cultural Web when change is needed. And yet, they often remain unchanged.
For example: an organizational vision can emphasize inclusiveness, while managers continue to receive bonuses on the basis of individual performance.
A mixed message when inclusiveness means cross-functional collaboration and effort.
Returning to Toyota, the structures that we encourage can support our systems. Or not. The manufacturer’s ‘kaizen’ philosophy is a famous example, where shop floor insights are consistently being fed back to improve manufacturing processes. Not just that, but to streamline and enhance the environments where employees work, with intrinsic motivational benefits.
In this Toyota example, there’s no one, top-down, directive when it comes to improvement and innovation: there’s company-wide involvement and engagement. Here’s a firm with systems that support its vision of constant innovation, all the way down to the factory floor. What might the ‘ideal’ control systems look like in your company?
The cultural web elements which I’ve looked at so far are more enduring facets of culture. Because of this, they receive most attention during times of change, when communicating your vision becomes even more important.
I facilitate quite frequently with companies that are restructuring, because ‘growing global’ can involve a lot of change. Divisions, teams, and functions come together, and new ‘ways of doing’ define how teams work towards that overarching vision.
In these situations, new roles often need to be clarified, and this is where it’s intensely important to ensure a shared knowledge of what I call ‘The Playing Field’. That means helping people understand their shared context, and it’s where the ‘WHY’ plays a huge role.
With a clear rationale for not only how we’ll be doing it, but why we should, we develop the most supportive structures and systems for our vision.
And not just that, but we can build genuine commitment to them.
In my next post, I’ll look at more elements of company culture—the stories, symbols, and routines that can support or sabotage our progress toward our vision. In the meantime, I’d love if you would share your thoughts with me on our Time To Grow Global LinkedIn.
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