Filling The Gaps

Yesterday, besides my normal lectures (on International Politics and EU Policies), I had an opportunity to attend a panel discussion:

“Innovations in business - how to be ahead of competitors in reacting to market trends?”

At the email I received some days ago was also written:

“Why it is worth coming? The debate is a unique chance to contrast our vision of fast changing market with experiences of top managers and try to answer vital questions of today business: How to distinguish between crucial changes and vagaries of fashion? How to react more effectively then competitors? How to maintain flexibility of a giant company?”

The talk was quite interesting, although went beyond the innovation topic. It was held by two of the best professors at SGH plus a young lady, working at Johnson&Johnson.
Below are some of my notes:

–> Before talking about innovations as something that enhance the success of a company we should first try to answer questions like “What is success?”, “How we could measure it?” etc. /the conclusion was that there`s no a single definition and it has different meaning for different companies/
–> Companies should try not to look good in market but to be good in it
–> One decides to invest at certain activity in case the latter would bring him/her value more than elsewhere
–> Market share it s not good enough indicator in terms of measuring success of a company (what would bring you growing market share in a dying market?)
–> There’s no a single definition for value creation (it differs for owners/stakeholders/shareholders; in ST or LT etc)
–> Innovations usually are not successful from the very beginning. Change requires learning. The question is how long should your patience last?
–> ST indicators are easy to be manipulated
–> Innovation could be started in order to catch up our competitors or to surpass them
–> Nowadays innovation is a “big world” in all companies, but usually most of the innovation ideas are too expensive to be implemented
–> The smallest innovations brings the most profit
–> Innovation means always risk. Most of the innovative products don’t bring success (profit) but help the growth of the “old ones”.
–> Innovations should be at first place at IT solutions. The problem is that most of the companies treat IT solutions as cost instead of value enhancing tools
–> Innovations are not only at portfolio level- distribution, delivery, information system etc
–> A good manager should be able to identify trends
–> Corporate culture could be seen as a competitive advantage for companies (“something that could not be copy, at least not easily”). It `s not equal to bonus system It`s intangible. It helps attracting same kind of individuals. It’s also something that employee could not understand, explain etc, just feel, being a part of.
–> Nowadays the relation with a customer could be much more important than the product itself.

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I got this inspiration a couple of days ago to write an article about corporate culture (last week at my OB/OD class we discussed the topic and where are the limits of an employee integration). Do we really need it and if yes, to what extent? Is the corporate culture sign for higher social consciousness (“we put employees first”), or isn`t it just a necessity (an easy way to attract, motivate and retain employees)?

Today’s business world doesn’t operate only with strong economics terms as it has been used till the last couple of decades and the success of a company no longer depends only on its policies toward maximizing profits and revenues. Today’s purpose of business is value creation and building a stronger longterm relationship among employers-employees-customers. Companies are trying to create such an atmosphere that will permit them to identify themselves as big families, places of like-minded people having the same values and beliefs. The key factor to achieve this goal is through creating unique corporate culture, but what I am asking is “Doesn’t business go too far?”.

First, have a look at the title- it`s not DO WE NEED corporate culture but TO WHAT EXTENT we need it. We all know that corporate culture contribute to the success of a company but do we know what exactly corporate culture stays for?

Corporate culture refers to the shared values, attitudes, standards, and beliefs that characterize members of an organization and define its nature. However, the real purposes for its implementation are quite contradictory.

Earlier this year, Prof. Rosabeth Moss Kanter has published an article in Harvard Business Review called “Transforming Giants”. The focus is put on some of the biggest TNCs, the same who usually have the strongest and well-known corporate culture. One of the key messages is: “When giants transform themselves from impersonal machines into human communities, they can transform the world.” What I asked myself after reading it was “should it be this way?”. Should companies transform into human communities, is it their responsibility of making the world a better place and don`t you think that the likeness of the people involved in a company (in term of shared beliefs, values, attitudes) would become in the near future more an obstacle toward business success, than a condition for it? Another question one should ask is if the real purpose of companies with strong corporate culture is transforming the world or isn`t that just a new management tool. Even if I would like to think for a corporate culture as a sign for higher social consciousness, in my view is on the first place an easy way to attract, motivate and retain employees. Nowadays people are what differentiate companies and namely the human capital is the key strategic asset a company possesses so the main purpose of corporate culture is securing its survival on the market through policies of keeping its major source of success.

Along with the above mentioned there`s one more reason I refer to it as a necessity- the end of the hierarchy model. The power is much more spread away as it has been in mid 50s , the number of employees much higher and the cultural differences much bigger. What corporate culture does is unifying the people and secure they all understand the main purposes and values of the organization, so in any given case they would act according to company’s policies. The latte also make employees much more flexible.

One of the classic article related to CSR is “The Social Responsibility of Business Is to Increase Its Profits”, by Milton Friedman. As corporate culture is a part of CSR policies or it is going along with it, one could say that the policies for implementation of corporate culture is to increase a company’s profit. The rest (“making the world a better place”) is cause-related marketing.

What do you think? Do you really believe in the concept of corporate culture?

I would like to emphasis that I am not against corporate culture. I am against fake corporate culture and against corporate culture which goes too far. The effects of all nice activities companies undertake nowadays are easy to be noticed and have really great impact in the society. The question is that the same activities somehow take off the focus from the main business purpose… It`s like too show-off policies. I really could not agree that executives put people on first place, although if they want to survive, they definitely should start doing it. But not only on paper, because take whoever big TNC is, proud of its corporate culture and core values, put its name along with “scandal” in google and you would see where it would lead you. It would give you much better picture than the one from the main web page of the same company. I don`t want to say that this is always the case, but it often happens that all nice sentences a company stands for are just a new marketing campaign.

Aren`t the quality of services and products, along with good (satisfactory salary, opportunities for promotion etc) and safety conditions for work, the only things a company should take care of? Including, of course, the environmental issues. However, in my opinion that`s something a company must do anyway and it`s not related with CSR for ex.

Last thing, concerning values… Aren`t values culture-determined?

*Notes on “Organizational Behavior and Organizational Design” lectures, taught by Prof. dr hab. Piotr Płoszajski (see the end of the post), Warsaw School of Economics. Have in mind that we are provided with all of the materials in power points so these are only sentences I`ve wanted to remember, questions without answers, things that should be check out etc.*

Management is contextual. There`s no a single sentence “If A, then B”- everything is changing.

What is motivation when you don`t see the employee?

“Time is money” vs “Money is time”- the changing role of the time (our major resource).

The business environment it`s not only complicated, but also complex; not only global, but globally intensely interconnected.

Change requires learning. (fast )

Knowledge differs from understanding. Understanding is beyond the knowledge.

How we learn to understand? How to go to the point we don`t think? (ex. golf players- considering the weather, the grass etc)

There are 3 levels of managerial understanding: 1) Staring at… (learning, reading, seeing etc); 2) Level of seeing; 3) Level of understanding (the underlying mechanism)

Soft knowledge- intuition, feeling, guessing. (simple intuition- close in time and place.) But then: is feeling a knowledge?

The-ever-present dream –> to know whatever is to know. The consequence- nowadays the world is full of information. We probably know less today, than yesterday. The kind of knowledge company may need in order to have success and survive may not exist yet.

To have a look at the chaos theory.

Critical dependence of initial conditions (ex. 2 leaves in a mountain stream at the same initial position- always take a different direction)

How to go from complexity to simplicity?

Children have the ability to see the nature of things; growns-up seek safe equilibrium.

Century of right side of the brain?

We should see what everybody has seen, but think what nobody has thought.

Creativity doesn`t mean the same for everyone.

“Grey revolution”

For the first time in history the society will be rather old than young. (in next 10-20 years and up)

Pension funds will be one of the major factors in the market.

The health sector would be with the highest growth rate.

Could we talk for “The end of capitalism”? (Because of the aging society and different kind of social policies needed)

Reverse mortgage

Will China become rich before getting older? (to have a look at the FT archive if I remember correctly)

Immigration is no longer enough to compensate the low fertility rate in most of the western countries and USA.

New customer majority! (55+ ; the only one customer group which will raise in numbers)

Changing of the advertisement. (ex. Dove)

The scarcest resource nowadays- the attention of the customer.

Is it good for business to divide life “at work/ at rest/ at play”? (I`m not completely sure, but should be again a title from FT)- Isn`t it better when employees think all the time for the business, even if that means to make a phone call or send an email not connected with the work itself through the working hours?

Personalization of the products in order to achieve not only the customer’s satisfaction , but to take him to the stage of perfection.

Puma: the first one to make the connection between sport and fashion.

Where is the limit of integration of an employee?

How the new technology influence privacy?

P.S. If something differs a bit from what has been said during the lectures, that means that I have “changed” it through my perception…

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Prof. dr hab. Piotr Płoszajski (in brief):

Director of Theory of Management Department at Warsaw School of Economics (SGH)
- Director of CEMS programme at SGH
- Chairman and founder of Polish - Japanese Management Center
- Lecturer at Harvard University, Princeton University, Boston University, Sloan School, MIT, World Bank, Oxford University, Cambridge University, London School of Economics

If there would be a sentence I`ll always remember my “Network Economy” class with, this would be:

The only way a company could achieve a competitive advantage nowadays is through creating something that could not be copy!!!
Prof. dr hab. Piotr Płoszajski

We are trying to find out some ideas and solutions for reaction to the fast changing environment… And almost everything we come to has 3 main characteristics: it`s on-line based , it`s giving the customer an option for personalizing it and the major source of income for the business it`s not from the main product, but from the additional ones.

What I`ve heard today was also “Traffic is the king”…