Back to basics: The three pillars of organisational success
Most of today’s organisations are still structured and modelled on rigid hierarchies full of bureaucracies - models that force them to merely ‘react’ to the constant change happening all around them, instead of getting ahead of it. (How often have you heard business leaders talking about wanting the organisation to be more proactive in the market, rather than reactive?) Considering that those rigid hierarchies were first developed during the Industrial Revolution, surely it’s time we reconsider our perspective on organisations and figure out how to adapt them to become relevant and effective in today’s reality. So let’s start by reframing things.
What are the basic needs for any organisation to flourish today?
- Maximise profits and improve cost efficiency. This is a no-brainer and, by far, these tend to be the most important KPIs for most organisations (including non-profits, as they need to raise more money than they spend, which is impossible without cost-effectiveness).
- Balance quality and growth. Business growth alone is not enough, and does not translate into sustainable success unless it’s paired with quality – of the product or service, of course; but also of the organisational processes required to sustain that growth, an aspect oftentimes (and surprisingly) underestimated.
- Keep up with technology. Few organisations have enough cash flow to keep pace with the speed of technological advancement, so informed decisions are needed about if and when to purchase or upgrade technology to benefit your organisation and your customers.
- Find and nurture the right talent. Talent is and will always remain the lifeblood of any organisation, so finding and retaining the right talent is paramount to organisational success.
- Deal with competition. Tactics and strategies that worked in the past may no longer be relevant today, and knowing how and when to change tack requires honest introspection and self-awareness as an organisation.
- Attract new business. This is all about retaining old and gaining new customers, which boils down to how you treat them. However, while most organisations talk a great game about customer-centricity and about being customer-centric, few are truly committed to walk the talk.
- Manage business uncertainty. Weathering economic turbulence needs a long-term vision and plan, and a shift from the myopic, unrelenting, and almost irrational obsession with quarterly numbers.
Now that’s a lot to unpack, so let’s boil things down even further – for the sake of simplicity – and summarise all of the above into one basic and fundamental need: to create a sustainable competitive advantage, i.e., one that can be sustained consistently over time.
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But how do you create that advantage in a hyper-competitive, fast-paced, globalised environment?
At its very simplest, competitive advantage is a consequence of two things: what you do (your products and services) and how you do it (operational efficiency). So let’s reframe our thinking around these two elements.
‘What you do’ manifests itself externally and is the sum total of all your products, services, and marketing: your product development, technology/IT, pricing, value proposition, customer journey mapping, brand and touchpoint design, communications, sales, service delivery, etc. ‘What you do’ is essentially your external product or, to put it another way, it’s your customer experience (CX).
‘How you do it’ manifests itself internally and is the sum total of your organisation’s strategic alignment, cross-departmental collaboration, and culture: level of competence, access to resources, clarity of communication, space and infrastructure, distribution of effort/skill, organisational policy, governance, personal relevance, emotional drivers, support systems, group cohesion, sense of belonging, rewards and recognition, leadership role modelling, and social norms*. ‘How you do it’ is essentially your internal product or, to put it another way, it’s your organisational experience (OX).
The truth is that a great CX is really nothing more than a reflection of a great OX. To deliver the first, an organisation must have shared goals, system-wide thinking across all departments, flexible design (of processes, procedures, and even structures), incentives that encourage loyalty to superordinate goals (not subordinate ones), healthy cooperation, and strong, customer-centric leadership.
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The point I’m trying to make is that CX and OX are two sides of the same coin – you cannot address one without addressing the other. And yet, most organisations will invest much time, effort, and money in designing a great CX, with only a fraction of that invested in designing the OX. The assumption (or rather, the hope) is that the CX will somehow transform and shape the OX over time – and this is a huge mistake. Just like any product you put in the market, your internal product must also be carefully designed, tested, debugged, and iterated – it cannot be left to chance.
Having said that, there is one more piece to this puzzle, and that is the brand. Now, I have to be careful here, as the word ‘brand’ has become tainted over the years. I’m not talking about your logo, design, or advertising – those things are tertiary and, dare I say, superficial.
When I reference brand, I’m referring to the essence of what your organisation stands for, the thing that makes your organisation different from your direct and indirect competition. Your brand is the thing that guides what you do and how you do it. Without a clear sense of your brand essence, all efforts to design your CX and OX will be subjective and arbitrary, often leading to even more disconnects within your organisation.
At its simplest, a brand provides your organisation with a clear sense of purpose around which you can align all your teams and activities, and it provides your customers with a clear sense of what they can expect from you in terms of product and service delivery. (There’s more to brands than that, but that’s a topic for separate consideration.)
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By simply reframing our perspective on organisations around these three pillars – brand, CX, and OX – rather than departmental structures and processes, we can start to envisage far more interesting and relevant ways to create a sustainable competitive advantage.
This approach provides a framework to create change by working on these three pillars simultaneously, systematically, and methodically, and in ways that don’t overwhelm your organisation. It also provides a framework to help you change the way teams solve for a specific opportunity or challenge, and then scale that change to ultimately transform the trajectory of your organisation.
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The bottom line is that you’re running an organisation of people, with the sole objective of delivering something of value to other people. Times have changed, and so too must we. It’s time we seriously question and let go of the outdated models and structures that are relics of a bygone era, and redefine how we work in today’s realities.
Imagine this: an organisation where everyone is aligned behind a shared sense of purpose. Where teams understand their role in the bigger picture, and are able to calibrate their activities for the greater good of the organisation. Where communications do more than just inform teams, by keeping them involved and invested in the success of the whole. Where team members contribute their individual knowledge, experience, and perspective towards the success of the whole. Where ‘business as usual’ becomes a continual process of learning, adapting, and evolving, one that involves the entire organisation – which, by the way, is how you will create sustainable value for your shareholders.
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This is not wishful thinking.
Everything I’ve described can be learned over time by any organisation. It just requires a bit of (un)common sense and an appetite for change.
In the words of Buckminster Fuller, “You never change things by fighting the existing reality. To change something, build a new model that makes the existing model obsolete.”
If you’d like to learn more, please get in touch. I would love to start some introspection with you.
Disclaimer: My sole purpose in writing this is to stimulate an honest, open, and much needed discussion about how we can create meaningful change in organisations. So I encourage you to please join the discussion and share your questions, opinions, and experiences so we can challenge and advance our collective knowledge on the topic.
* Leans on the work of SYPartners