This column is part of Globe Careers' Leadership Lab series, where executives and experts share their views and advice about leadership and management. Follow us at @Globe_Careers. Find all Leadership Lab stories at tgam.ca/leadershiplab
Have you ever had your idea killed? If the response you got sounded somewhat like "It won't work around here," or "We've always done it this way," odds are it wasn't necessarily because your idea was bad, it likely didn't align with the cultural norms of your organization. As the world changes quickly and companies seek to reinvent their products, services, and business models, the "silent killer" often appears. It isn't for lack of great ideas, fierce competition or shortage of resources. It is the very culture that lurks within the walls of your company.
You've likely heard the popular phrase "culture eats strategy for breakfast." Organizational culture is reflected in nearly every aspect of a company. We see culture exemplified through factors such as whether a company is willing to take risks or prefers to play it safe. Do they focus more on driving results and achievement or on people and relationships? Are they open to new opportunities and change? How do they generate and move ideas within the company?
Throughout history, companies have rapidly faded into irrelevance, not because they didn't see change coming, but because their culture couldn't shift into a new paradigm and innovate fast enough. You can have the best talent, best ideas, abundant resources and cash, but at the end of the day, if the key attributes and behaviours ingrained in your organization's culture do not align with the concept or idea, the success of your idea starts looking as if it's a matter of luck.
Let's take a recent example at Nokia. Nokia never suffered from a shortage of ideas. It spent $40-billion on research and development over the past decade, almost four times what Apple spent over the same period. Yet, if you read between the lines of Stephen Elop's now infamous Burning Platform memo, Nokia's culture grew so complacent and complex that despite having a product that resembled the look and functionality of the iPhone over 14 years ago, it shrugged off the idea and it never got to see the light of day.
Clearly, culture has a huge impact on the success and relevance of today's businesses; for some companies, culture has become a clear competitive advantage. Competitors can replicate your product, brand or business model, but replicating a winning culture is a difficult – if not impossible – task. Lou Gerstner, who is credited for turning around IBM in the early 1990s said, strategy by itself, though "terribly important," is not enough to save a dying company. "You don't 'win' with strategy, everybody's strategy in industry is fairly similar. There's no way to create a unique strategy." What Mr. Gerstner learned at IBM is that "culture is everything."
Despite its tribulations, Canadian success story Lululemon makes a good example of culture as a competitive advantage. Lululemon built their culture by fostering a place of entrepreneurship, giving employees the freedom to pursue creative endeavours and connecting with customers on an authentic level. In an industry saturated with competitors, where most players can set up similar stores and undercut pricing in a heartbeat, Lululemon continues to gain loyal customers who are brought into the fold through a unique store experience that their educators (their name for store associates) continue to execute in a consistent, yet personalized, fashion.
Netflix is a disruptive force in their industry and has out-innovated many incumbents. They openly share their organization's cultural handbook, which details how Netflix aligns all of its employees to nine behaviours and skills that are drivers of innovation and organizational agility (which include, among others, selflessness, curiosity, communications and courage). They also clearly call out behaviours and attributes that can inhibit innovation such as the intolerance of 'brilliant jerks' and curtailing process-adherence in exchange for creativity and self-discipline.
Cultures that foster innovation are unique to startups, right? Not exactly. As a 112 year-old company, 3M proves that fostering the right culture for innovation isn't only possible in smaller companies or startups. Though 3M has changed many CEOs over the past 40 years, the philosophy of William L. McKnight, its inspirational leader from 1929 to 1966, is passed along to every new scientist or engineer. The company's culture was shaped to firmly believe in tolerating mistakes, promoting networking, and allowing employees freedom by using 15 per cent of their paid time to "chase rainbows" and hatch their own ideas.
Innovation is too important to be left to chance. If you are not seeing progress in your company, consider how your culture needs to be adapted instead of considering moving around boxes on an organizational chart. Cultures aren't easy to change, but with the right leadership mindset, leading from the trenches to establish and foster the right norms and values that support innovation as a top priority, the door opens for growth, and who knows, maybe even your next competitive advantage.
Reuven Gorsht (@reuvengorsht) is global vice-president of customer strategy at SAP (@SAP) where he leads the company's global go-to market initiatives.