What is the secret to business success? The question has been asked, endlessly. And the answers by both pundits and practitioners bring a multitude of concepts, principles, and theories.
While it is true that one size does not fit all, the general consensus settles on the triumvirate of leadership, strategy, and execution. Without leadership, a business enterprise will eventually fail. Survival is possible without a strategy, but seldom over the long haul. Great strategy with lousy execution isn’t worth the piece of paper it is written on. The consequence of these proclamations is rather obvious; get it right, bring it all together and you have the commercial magic every enterprise desires.
But, how do you bring it all together? The glue that binds leadership, strategy, and execution is culture – quality individuals working together at the board level, in the executive suite, in the general office, on the factory floor, and out there in the field, the domain of the customer.
The glue that binds leadership, strategy, and execution is culture…
Until the information age, companies needed scads of people to run machines in plants and warehouses all over the country. The assets their shareholders valued most were tangible. Today, 80 percent of the asset value of the S&P 500 is intangible. These assets cannot be seen, touched or physically measured. The knowledge economy appreciates the fact that trade secrets, trademarks, patents, knowledge and know-how are what matters. This ethic explains why they spend so much on research and development. Last year, the world’s top 20 R&D spenders dished out more than $150 billion in this regard. Eight of these 20 companies participated in the healthcare sector, seven were in software, computers or electronics, and five were automakers.
In the new world of business, competitive intangibles are the source from which competitive advantage flows or goes, and human capital is the source of every competitive intangible. When it comes to recruiting great talent, the edge goes to organizations known for great cultures. Company cultures continue to become more and more transparent. People know that Southwest Airlines and Google are great companies to work for. Others, the likes of Sears, and American Airlines, not so much.
Finding the right people, motivating them, retaining them, facilitating their personal and professional development continues to be problematic for so many organizations. CEOs come and go. Wall Street demands quarterly results. Recessions thrash astute strategic intent and pressure CEOs and leadership teams into a mishmash of tactical “quick fix” solutions. If those in power are not careful, chaos will rear its ugly head in the complexity that is self-created.
Strong leadership, strategy, execution, and human capital are for naught without the bond of a great culture.
Strong leadership, strategy, execution, and human capital are for naught without the bond of a great culture. Culture is not only the best glue in business, it is also the best bargain in business. Why? Because it is attitudes, and not bank accounts that create this competitive advantage.
Can you add to this discussion? I invite your thoughts and comments below.