Tomorrow’s leaders will be defined by the culture they craft, not the products they create.
Some may argue against this statement, but let me explain why I believe this to be true.
It starts with the world we live in today, which looks very different than the way the world looked 30 years ago. In 1988, mobile phones had an antenna that could poke your eye out and weighed almost as much as my dog Winston. Today, more than 36% percent of the world’s population has a smartphone in their pocket, and it’s probably more powerful than their computer. This fact alone means that we as consumers, employees, employers, and citizens already work, play, communicate, commute, shop, learn, and live very differently than we did in the past. Technology is embedded in everything we do and who we are. Cars are now self-driving and bodies are now self-healing. Employees can work from anywhere in the world, and anyone can find the answer to nearly anything at the click of a button (or by asking Alexa).
In 2016, Professor Klaus Schwab, Chairman of the World Economic Forum, dubbed this age the “Fourth Industrial Revolution,” a new era that extends the impact of digitization and blurs the boundaries between the physical, digital, and biological spheres. In this new era, we are experiencing an unprecedented and exponential rate of change and innovation that few companies are dealing with well today, and even fewer are prepared for in the future.
The companies that thrive in the Fourth Industrial Revolution will require a much different mindset and way of operating than companies have had in the past. We need to embrace change and speed, over safety and stability. We need a passionate workforce who has the specialized technical skills needed in the digital age, but who also isn’t afraid to leave their comfort zone. We need leaders who can combine instinct, empathy, and data to make faster, smarter decisions — and, perhaps more importantly, connect the dots where others don’t. We need, as Schwab so eloquently writes in his blog, “entirely new systems of production, management, and governance.”
None of this is about having the best idea, the best product, or the best platform. Those are short-term goals, in a time when products can become irrelevant in a matter of months.
Just ask Nintendo, which saw its star rise again with the launch of Pokémon Go — an app that was downloaded more than 10 million times in its first week of release — only to lose most of its players within a couple months.
Or ask Netflix, who after putting Blockbuster out of business, almost put themselves out of business when it announced out of the blue that customer rates would increase by 60 percent. Luckily, neither Nintendo or Netflix were one-hit wonders. Both adapted to their circumstances, continued to innovate, and are still leading the charge in their respective industries. However it does illustrate the pace and fickleness of today’s business environment.
The only way companies will keep pace and lead in this new environment is by focusing first and foremost on their organization’s culture, a topic I addressed in a recent Forbes blog. First let me clear something up. Culture is not about perks, parties, and programs. Those are tactics. In the simplest terms, I define culture as the underlying organizational DNA that influences management decisions, employee behaviors, and how a company operates. It is what drives all those things I mentioned earlier in this blog — who you hire, how you manage them and keep them engaged, as well as what systems, structures, and processes you put in place (or choose not to put in place) to support and empower them to be successful. It’s the culture you create and scale that will dictate whether you create one disruptive product or service — or whether you maintain that leadership over time, even through the ups and the downs, like Netflix and Nintendo experienced.
Most business leaders inherently know that culture is important, but few know exactly how to go about crafting, building, or shifting a culture. That’s because it’s one of those nebulous things that is difficult to measure and nearly impossible to mandate. And us leaders don’t like grey area. There is a lot of grey area when it comes to culture.
One of Chris's favorite coworkers.
It’s not about having a good or bad culture. Those are subjective terms, and what is good to one person might be bad to the next. Think of how people feel about Amazon’s workplace culture. It is well documented to be a notoriously tough, hard-driving place to work. However, most people I know who work there appreciate how the environment pushes them to think harder and focus so intently on the customer’s experience. It’s hard to say definitively whether Amazon’s culture is good or bad, but few people would argue that it sets them apart in all the various areas in which they compete.
But we are not all Amazon or Netflix. How do companies early in their lifecycle create a culture that differentiates them from the competition? How do midsize companies scale their culture? How do larger, more established companies shift an existing culture to lead and win in a changing business environment?
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