New Business Models & Culture Building in Organisations

New Business Models & Culture Building in Organisations
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While we come to the close of the series, I will like to focus on the need for organisation’s culture to be flexible and nimble as per new business models and changing working environments globally. Organisations make businesswise decisions to match or outbid competition, business models are therefore framed to meet certain objectives while balancing the cost efficiencies.

Today, most of the business models are multinational engaging multicultural, multidimensional and multidisciplinary aspects. Employees sit miles and miles apart and often quality of communication become a challenge. When communication is not in sync with desired culture as outcome, it is certainly a grey area, almost a threat to an organisation – as we had earlier observed culture has a bearing on performance or rather under-performance.

The world is much flatter now in terms of work flow than we had ever imagined before. In 2012, Wild Brain, a company which made animation movies took advantage of global supply chain that was now available via web. Higglytown Heroes, an American Children’s television series developed by Wild Brain aired on Disney Channel was an outcome of the transformed working business model. The recording for the show was done in New York or Los Angeles in California, the design and direction in San Francisco in California, the writers from Florida, New York, Chicago, LA, San Francisco used to network with each other while the animation characters were done in Bangalore in India with edits back to San Francisco. All these groups worked together on VPN system and shaped up things from various locations almost half a world away from each other.

When teams are sitting across thousands of miles, it can pose challenges in coordination or binding the group into a common culture to help get things done fast yet of superior quality. Video conferencing, emailing are more of basic necessity or hygiene; they certainly do not fill in the gaps of impersonal communications and understanding the spirit of communications completely. For organisations to stay nimble, often business structures are tweaked or moulded for the sake of ever changing culture or developing the most appropriate one.

Almost a decade ago, HP in its pursuit of creating horizontal value creation, rationalised and consolidated its supply chain. They had 87 separate divisions and 87 separate supply chains and were not able to leverage much value. They reduced it to 5 influencing power of a $50 billion supply chain, the largest in technology industry, pooling expertise and building synergies within.

WPP, one of the global advertising giants eliminated barriers of departments or office cubicles. They literally and metaphorically took down the walls to foster dialogue and collaboration to co-create. They created cross- functional teams again making them flatter and faster. They emphasised a lot on diversity both in creative thinking and work force to challenge conventions and bring ideas, technologies and trends from various parts of the world.

The new models are radical and revolutionary. Organisations are happy being small yet focused. They do no mind sticking to their core competence rather than offering myriad diversified services, it allows them to concentrate on less but extremely important tasks. In such organisations creating cultural values in parent organisations is handled well, but passing on the same set of values to outsourcing companies is a tricky job yet imperative for seamless coordination and performance excellence as a long-term gain. Outsourcing companies are generally seen as undertaking transactional jobs; they do not see permanency of association with parent organisations hence is less emotionally driven. Often observed, employees of outsourcing companies consider themselves as lesser to employees of parent company and may not have as much ownership and passion. Inclusiveness is the only solution possible.

Talking further about new business models, a new breed of employees has emerged – Collarless Workers. They have freedom of time though they have their own dos and don’ts. Across many industries, they are dealing directly with customers and provide brand MOT to customers. Examples of such organisations are apparent where business revolves around aggregating services or service providers like Ola, Uber, UrbanClap, Swiggy etc.

Culture to seep down to multiple levels while in absence of hierarchy that had anyways long gone redundant is a very daunting feat to achieve. The models are yet to pass through the test of time, which means many numbers of years before it can be said that values can travel and get absorbed by third party-outsourcing companies the way it was originally formed in a parent organisation. Imagine a driver of Ola resonating with its vision of ‘growing business in a socially responsible way’ then we may hear lesser incidents of passengers being harassed or where security and safety was compromised. Interestingly, organisations like Uber and Ola have understood with time that their business models may not be able to cultivate reverberating cultures, not at least within the first few years, they are investing time and energies in conducting trainings and strengthening their customer care teams for regular customer feedbacks but their vision remains technically attached to the business core and not to create larger than life societal impacts. Eg. Uber’s vision as Travis Kalanick spelt out at their fifth anniversary “smarter transportation with fewer cars and greater access” primarily centred on ‘transportation’ aspect of the company, while they had demonstrated eagerness to convert drivers into business partners, they seem to be still struggling as there are pros and cons of hiring this newly formed ‘Collarless’ brigade.

‘‘ Culture to seep down to multiple levels while in absence of hierarchy that had anyways long gone redundant is a very daunting feat to achieve.

Cultural build up also seems a challenge to many startups. Despite the high level passion and emotional bonding with business, there is also an immense pressure to ‘earn’ the respect in the industry. Business must show profitability especially if it is funded by investors. The focus from processes and systems shifts to revenue priorities. Employees remain confused about organisational way and attrition break loose.

It is common observance that society influences culture of organisations. Society can either be an enabler or a barrier in creating healthy communication flow, building teams or resolving conflicts. Professor Geert Hofstede conducted one of the most comprehensive studies of how values in the workplace are influenced by culture. He identified six distinctive values which differentiate culture of countries or organisations:

  1. Power distance Index: Degree to which people in a society or an organisation accept inequality.
  2. Individualism Vs. Collectivism: A society’s position is reflected in whether people’s self-image is defined in terms of ‘I’ or ‘We.’ It has a bearing on decision making process and team efforts.
  3. Masculinity Vs. Feminity: The Masculine culture gives importance to higher salaries and recognition whereas feminine culture is more about team work, job security and importance to family life.
  4. Uncertainty Avoidance Index: It signifies degree to which the members of a society feel uncomfortable with uncertainty and ambiguity, how a society deals with the fact that the future can never be known: should we try to control the future or just let it happen? Countries exhibiting strong UAI maintain rigid codes of belief and are intolerant of unorthodox behaviour and ideas.
  5. Long Term Orientation Vs. Short Term Orientation: Every society has to maintain some links with its own past while dealing with the challenges of the present and the future. Societies who score low on this dimension, for example, prefer to maintain time-honoured traditions and norms while viewing societal change with suspicion. Those with a culture which scores high, on the other hand, take a more pragmatic approach, they encourage efforts in modern education as a way to prepare for the future.
  6. Indulgence Vs. Restraint: Indulgence stands for a society that allows relatively free gratification of basic and natural human drives related to enjoying life and having fun. Restraint stands for a society that suppresses gratification of needs and regulates it by means of strict social norms.

Creating culture in Head Office and subsidiaries based out of different markets get affected by above value factors. Fixing culture is critical.

But as per my experience and of many others who have successfully led major transformations, culture isn’t that something you fix. Rather cultural change is what you get after you’ve put new processes or structures in place to tackle tough business challenges like reworking an outdated strategy or business model. The culture evolves as you do that important work. Leadership beliefs, attitude and style plays critical role in evolving cultural values. Continuous and consistent communication helps and a true leader who walks the talk and reinforces it all.

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