Fall 2009 issue of Horizons

GUEST FEATURE Jack Smith, Collaborative Strategies Inc.

What Really Creates Market Advantage? How many books have you read on this subject starting back in 1982 with “In Search of Excellence” by Tom Peters and Robert H. Waterman Jr.? Having read just about every one of those books, I believe they get very close (most notably “Good to Great” by Jim Collins and “The Breakthrough Company” by Keith McFarland). However, after having the privilege of working in more than 250 organizations and learning from both the successes and failures of some of the very best, I’d like to share a real world answer to: What Really Creates Market Advantage? One thing I learned early on is that no firm is as great or mediocre as they may appear. Just like in our own lives, we’re not as sensational as people think when they see us on a roll, and we’re not as incapable as they perceive us when we’re down. (Pro athletes can certainly relate to this truism.) What I’ve also learned is that every company thinks they have great people. In almost every SWOT analysis we conduct in strategic planning, firms cite their people as a strength. Never have I heard … “our weakness is our people.” So where the above is the same with most every company with which I have had the privilege to work, let me share with you what is most different in companies who really create market advantage. By Jack Smith, Collaborative Strategies Inc.

Culture — The best definition I’ve heard for organizational culture is: “How people come together to get things done.” Recent research* suggests that seven aggregate characteristics capture the essence of an organization’s culture:

1. Innovation and Risk Taking 2. Attention to Detail 3. Results Orientation 4. People Orientation 5. Team Orientation 6. Aggressiveness 7. Stability

Evaluating each characteristic on a continuum from low to high will give you a good composite picture of any organization’s culture. Once again, I believe this research gets it very close, but I believe it does not adequately illuminate the two most critical elements of an effective culture: Trust and Responsibility. Trust is defined as “the ability to say anything to one another respectfully without fear of reprisal; while I reference responsibility in terms of “taking responsibility for the success of others, e.g., customers, coworkers, owners, suppliers, etc.” In fact, in an 11-year study, John Kolter (author of “Corporate Culture and Economic Performance”) showed income growth to be six times higher in strong and effective cultures, with effective defined as “performance oriented and balanced (customer, employee, owner).” Leadership — I can sense it on the first day of an engagement, especially at the top of the organization. Great leaders expect and get the best from their people … no exceptions. And, great leaders make the tough “trade off” decisions that cause a company to remain truly distinctive. They say no to things that divert precious resources from what they do best. My own bias on leadership leans toward servant leadership in which one genuinely cares about people to the point where one serves and enables them.

It comes down, time and time again, to three things: Culture, Leadership and Relationships.

23 u fall 2009 issue