World Knowledge Forum – Seoul, South Korea

wkf banner

Last week I had the privilege of attending the 15th Annual World Knowledge Forum in Seoul, South Korea as both a panel moderator and speaker.  And this Forum attracted an impressive collection of politicians, academics, business leaders and entrepreneurs. The keynote speakers were the President of South Korean, Madam Park Geun-hye, and former President of France, Nicolas Sarkozy.

¼¼°èÁö½ÄÆ÷·³ °³¸·½Ä Âü¼®ÇÑ ¹Ú ´ëÅë·É My speech to about 200 participants of the Forum was titled:  The Importance of Corporate Culture in Asia’s Global Business Expansion. However, the majority of the forum panel topics and presentations focused on the uncertainties of the Asian economy and the Asian political arena as key drivers of the current slow growth of the region.

What was most interesting to me, however, is that while my topic was the only one specifically focused on corporate culture, at nearly every panel discussion or speech I attended, issues of corporate culture and national culture came up repeatedly in the discussions! The most frequent culture topic centered around the traditional Korean corporate culture of hierarchy, loyalty and top-down decision-making and whether this set of corporate behaviours was still a benefit in a more globally competitive world. Is the Korean culture of efficiency and low-cost still a competitive advantage? Should Korea shift to more of a Creative Economy, given that China is now the world low-cost producer and technological innovations seem to be the driver of modern business growth?

The panel discussion I moderated dealt with the topic of how Korea could build a more creative and innovative economy. We had a very engaging discussion on this topic due to the expertise and diversity of the four panelists: Professor Andrew McAfee from MIT, Ben Casnocha, an entrepreneur from Silicon Valley, Yigal Erlich, the founding father of the Israeli Venture Capital industry, and Ryu Jung-hee, CEO of Future Play and serial Korean Entrepreneur.

What became apparent was the many fundamental strengths of the Korean economy and society, including government support, education for all, technological infrastructure, work ethic and many others.  All the panelists agreed that with shifts in certain government policies to encourage start-ups and entrepreneurs, the Korean economic miracle to the past 50 years could successfully be refocused on innovation and creativity for the next 50 years.

100728_p26_korean1

If you are interested, here is a synopsis of the panelists key points.

The World Knowledge Forum was a stimulating gathering of bright minds and business experience and the over 3000 participants who attended certainly came away with food for thought and tool for improvement.

John R Childress
Senior Advisor on Corporate Culture, Leadership and Strategy Execution
Author of LEVERAGE: The CEO’s Guide to Corporate Culture
Visiting Professor, IE Business School, Madrid

email: john@johnrchildress.com

 

 

 

 

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When National Culture and Corporate Culture Collide . .

Military+discipline+hats+off_6e0bb0_4398712

A frequent reader of my blog postings on leadership and culture sent me the following paragraph from a much longer article:

The British military recently revealed that this past August they had to deal with a mutiny among 300 Libyan soldiers being trained at a British base. The Libyans were selected to receive combat and leadership training so they could better train and command Libyan soldiers back in their own country.

The mutiny occurred when British officers in charge of the training put three of the trainees under guard after police picked them up for being off base without permission. Then twenty other trainees went and threatened the British soldier guarding the three Libyans. Rather than risk violence or an incident, the guard let the three go free. Senior British officers were uncertain about how to further handle this seeming act of insubordination.

What seems like insubordination to one culture looks entirely different to another.  In this case, the behaviour of both British and Libyan officers were determined more by national culture than organisational (military) culture. In the British national culture, rules and regulations are viewed as critically important for order, civility and efficiency.  In the Libyan national culture, man-made rules are more like suggestions with loyalty to friends and family being far stronger! In terms of strong behaviour motivators, National culture trumps organisational requirements every time.

A National Culture Test

Here is a classic example of how different National cultures would respond to a situation:

You are riding in a car with a close friend, who hits a pedestrian. You know that he was going at least 35 miles per hour in 20 miles per hour zone. There are no witnesses. His lawyer says that if you testify under oath that he was only driving 20 miles per hour it may save your friend from serious legal consequences.

What would you do?

As much as we in Western society would like to think that honesty is a universal human value and is always “the best policy”, not all national cultures see it that way.  Below is a representative graph of how different cultures would behave in the above situation:

car accident

In other words, not understanding or taking into account national culture when dealing with others can lead to seemingly hopeless and intractable situations, such as the British military situation above.

Below is a chart I often use to explain the differences between National Culture and Corporate Culture:

national vs corporate

As you can see, of the two, national culture is by far the earliest, deepest and strongest in determining how people react to situations, events and other people.

No wonder the Libyans reacted the way they did, it’s in their DNA, not in their training!

 

John R Childress
Senior Advisor on Corporate Culture, Leadership and Strategy Execution
Author of LEVERAGE: The CEO’s Guide to Corporate Culture
Visiting Professor, IE Business School, Madrid

email: john@johnrchildress.com

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Risk and the World of the CEO . . .

financial-risk

Risk comes from not knowing what you’re doing.  ~ Warren Buffet

I was having lunch the other day at one of my favourite business restaurants in London with a colleague. At one point the conversation turned to the “world of the CEO”; that is, what those in charge of large groups of people and organizations have to deal with and what really “keeps them up a night”.

At one point in the conversation my colleague put our whole discussion into sharp focus with these words:

“There are three risks that keep CEOs up at night: financial risk, market risk, and reputational risk!”

The first two, financial risk and market risk are easy to understand. Overspending to get a product to market poses a financial risk since there is no guarantee adequate sales will materialise.  Opening new facilities in emerging markets in order to capture early entry advantage is an example market risk since emerging markets are notorious for not growing as predicted.

These two risks, while potentially huge, are the most studied and analysed. Every newly minted MBA spends hours devoted to lectures and case studies on them.  CEOs surround themselves with risk experts of all sorts to assess and analyse financial and market risks. The probability of making a giant mistake in either of these areas is becoming less and less as we learn more and more about the world through the use of new technologies such as Big Data, market intelligence and sophisticated analytics.

Reputational risk is less well understood.

Imagine that the company has an account similar to a bank account. Every time the company does something good its reputational capital account goes up; every time the company does something bad, or is accused of doing something bad, the account goes down. What’s interesting about a reputational risk account is that it can be filled or depleted with either actual actions, or perceived actions. And the consequences of reputational risk can be enormous.

For example, look at the current state of global banking. As a result of excessive profit seeking individual traders and others in the banking world have crossed the bounds of ethical activities, such as the LIBOR rate fixing scandal and  pension mis-selling activities, causing fines in the billions from regulatory authorities and others. To date, the financial services industry, and mainly banking, has been fined more than $100 billion.

2013-edelman-trust-barometer-global-financial-services-industry-13-638As a result of poor behaviour at all levels and an unwillingness on the part of banks to really address rogue and unethical behaviour, the reputation of big banks is at an all time low.  Basically the financial services industry, even 6 years after the global financial crisis of 2008, remains the least trusted of all industries (Edelman 2014 Trust Survey).

“The most remarkable finding is that risk professionals – on the whole a highly analytical, data rational group – believe the banking crisis was caused not so much by technical failures as by failures in organisational culture and ethics.”  ~ UK Institute of Risk Management

An additional example is the poor media handling by BP and its former CEO, Tony Haywood of the Deepwater Horizon oil spill in the Gulf of Mexico in 2010. The cost alone to BP has been upwards of $40 billion, but the reputation and trust in BP took a giant hit in the eyes of the public, and its share price has yet to fully recover.

Corporate Culture at the Heart of Reputational Risk

Risk is not knowing what your culture is doing!

Our conversation then turned to ideas on how CEOs can more effectively deal with reputational risk.  Since reputations are usually damaged by behaviours that are out of alignment with company values and/or consumer values and regulation, and since corporate culture is the habitual behaviours used by employees at work to solve problems, deal with colleagues, customers and stakeholders, then a greater understanding and management of culture can be an effective way to mitigate reputational risk.

The problem is, most CEOs and senior executives don’t know what their culture is, and most importantly, don’t realise that their corporate culture is not one unified element, but actually is a collection of subcultures.

Subcultures are formed when employees trust and respect informal leaders (trusted colleagues) more than management (Edelman). As a result, they take their clues on how to behave not from Company Values Statements or CEO speeches, but from peer and subgroup pressure to “fit in” and “be a part of the team”.  And all the regulation and corporate training cannot overcome the power of peer pressure in determining how people behave at work.

subcultures

When subcultures are aligned with the overall company strategy and values, culture can be a significant business asset.  But when subcultures are out of alignment, corporate culture becomes a significant business (and reputational) risk.

Who is advising you on culture and reputational risk?

 Thanks for joining the conversation.

John R Childress
Senior Advisor on Corporate Culture, Leadership and Strategy Execution
Author of LEVERAGE: The CEO’s Guide to Corporate Culture
Visting Professor, IE Business School, Madrid

email: john@johnrchildress.com

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The Seven Faces of Corporate Culture

John’s Note:  The following is the first draft of the Introduction to a new book I am writing. A book prompted by readers of my last book suggesting I give them more detail, more “how to”, more specifics on corporate culture.

I will be putting successive chapters out on my blog, Rethinking . . . , in the hopes that it will stimulate readers and those interested in corporate culture and leadership to further the dialogue and also send me ideas and suggestions that I can work into this new book.

The book title is: The Seven Faces of Corporate Culture.  Here is the first draft of the Introduction:

Introduction: The Seven Faces of Corporate Culture

Regard the holy trinity of change and progress: insight, implication and application.

 
Buddha 4 facesOn my office desk sits a small brass bust of a Buddha with four faces. Each of the four distinct sides sports a different facial expression. One shows contentment, the other amusement, another empathy and the fourth face laughter. The purpose of a Buddha with four faces in different directions is to ensure that no matter from which direction prayers emanate, the Buddha could hear them and respond. Sort of a spiritual omni-directional listening device.

 The business concept of corporate culture reminds me of a multi-faced Buddha in the sense that corporate culture exists everywhere inside a company, no matter in which direction you look, yet the internal subcultures are not always the same. As one of my business partners likes to say, “Whether you like it or not, whether you designed it or let it happen, you have a corporate culture!”

 For being such a popular business term (especially with “consultants” and the business press), corporate culture is still a mystery to most C-suite executives and managers, and even among business academics it remains poorly understood. There is no standard or agreed-upon definition and on the market today there are currently over 70 different corporate culture assessments, each purporting to diagnose your real culture. And even the large global consulting and executive search firms are now offering culture surveys and culture change programs. (If it’s branded by a big consulting firm it must be good, or at least expensive.)

 In my recent book, LEVERAGE: The CEO’s Guide to Corporate Culture (The Principia Press, 2013), I took a practitioner’s scalpel to the entire corporate culture movement; from culture assessments to culture change methodologies to culture consultants in an attempt to find the most useful business principles in the vast ocean of culture literature. My goal was to provide CEO’s and business leaders practical insights and useful tools to better understand their own corporate culture and how it influences, both positively and negatively, tangible business performance.

A review in The Economist magazine (Jan. 11, 2014; Vol 410, No. 8869) called my book one of the most “sensible efforts in an otherwise charlatan-infested field”. Okay, so I’m experienced and sensible, and maybe a bit of charlatan!

 In the past several months I have received many emails and letters from readers urging me to provide even more clarity and useable business applications relating to corporate culture and business performance.

 After over 30-years consulting and advising on corporate culture and performance, I have consistently run into seven scenarios where costly business mistakes are being made due to a lack of understanding of corporate culture.

 These seven scenarios are:

  1. Culture as a Hidden Business Risk
  2. Leadership Culture: Organizations are Shadow of the Leaders
  3. M&A: Avoiding the culture clash train wreck
  4. Business Turnaround: Culture and a sustainable turnaround
  5. Rapid Growth: How to avoid diluting your culture
  6. Start-up: Culture by design
  7. Building a Global Corporate Culture

 This short book is designed to provide insights, implications and useful applications for these seven specific business scenarios, where a better understanding of corporate culture could prove the difference between success and failure.

Comments and suggestions welcome, and thanks for joining the conversation.  

John R Childress

email: john@johnrchildress.com

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Reinvent Yourself . . . especially with a short runway

Doolittle raid

 People who cannot invent and reinvent themselves must be content with borrowed postures, secondhand ideas, fitting in instead of standing out. ~Warren Bennis

pearl harborOne of my favourite movies is the 2001 epic war film, Pearl Harbor,  starring Ben Affleck, Josh Hartnett and with Alec Baldwin as Col. Jimmy Doolittle. There is a particular scene in the movie that stands out for me as containing an important message not only for each of us an individuals, but also for business organizations.

In trying to decide how to counter the devastating sneak attack on Pearl Harbor, Doolittle and his team come up with a daring plan to bomb Tokyo and other key Japanese cities, thus showing the Japanese war machine that the US was still strong, capable and determined.  The problem was how to get bombers to Japan from a safe location, especially given a limited fuel supply and range.  The solution? Launch them from an aircraft carrier in the Pacific 500 miles off the coast of Japan.

Brilliant idea, but seemingly impossible, since the flight deck of an aircraft carrier at that time was shorter than the normal B-25 take-off length required.

The solution, reinvent the B-25 Bomber!  To do this, they stripped out all unnecessary extra B-25's En Route to Tokyoequipment and weight, loaded only 4 – 500 pound bombs, added extra fuel tanks for the long journey and a crew of 5.  Then they practiced short-field take-off techniques in Florida before loading 16 planes onto the USS Hornet in San Francisco harbor for the highly secret voyage across the Pacific.

The result was a significant morale boost for the US military and an action which forced the Japanese to change their war strategy and beef-up their homeland defense, at the expense of continuing to press their previously successful Pacific conquests. The rest is history, as they say!

Insights and Applications:

There are many highly experienced business executives and managers who are approaching the age where retirement is traditional, and getting hired again is extremely difficult.  In essence, they are running out of runway!  They don’t have 20 years to devote to a company, but on the other hand have well over 30+ years of experience and knowledge learned by doing, not by reading books.  Yet most companies are looking for younger talent with new ideas and a “longer runway”.

When the rate of change on the outside exceeds the rate of change inside, the end is in sight!  ~Jack Welch

The same is true of many businesses today.  The world is getting smaller and the pace of change faster and faster.  And competition is coming from all directions, even from outside your traditional industry.  How to keep up? How to stay ahead?

The solution? Reinvent yourself!  Think like Colonel Doolittle. Take your core strengths, strip away the no longer required, and morph into a valuable, lean mean machine that is all about adding value.  Lose some weight and get your energy and creativity back.

How big is your company headquarters? Radically reduce it, push accountability out.  How big is your monthly living budget? Cut it back.  Live simply. Read outside your field.  Use your knowledge from one industry or profession to come up with ideas to help solve challenges in another company or industry. Believe in your people.  Believe in yourself.  What you have learned along life’s journey has value. Figure out how to use it.

One of my earliest and most influential tutors about life and success used to say:

“The next time you see me, you won’t be able to say ‘Here comes the same old Tom Willhite’! I will always be changing, evolving, learning and doing new things.”

Yet I see too many capable executives and managers who keep doing the same thing over and over, and loving it less and less.  I see too many corporations just marginally improving their products rather than reinventing them for new markets and a new consumer.

So, what are you waiting for?

Thanks for joining the conversation.

John R Childress

Senior Advisor on Leadership, Culture and Strategy Execution
Business Author
Visiting Professor, IE Business School, Madrid
email: john@johnrchildress.com

View my website: www.johnrchildress.com

Latest books:  LEVERAGE: The CEO’s Guide to Corporate Culture; FASTBREAK: The CEO’s Guide to Strategy Execution.

PS: John also writes thriller novels: http://novels.johnrchildress.com

 

 

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The Curse of the Start-Up . . .

rabbits

If you chase two rabbits, you will lose both.

Start-Ups are fascinating.  Those who found or join a start-up company find it exhilarating, inspiring, creative, fast-moving, hectic, exhausting and thrilling at the same time. There is always something exciting and new to work on, new ideas to develop into products or services, new people to meet and pitch to, late nights and of course, a mountain of pizzas.

So with all that creativity, energy, excitement, passion and hard work, why is it that so many start-ups fail? It’s not for lack of trying.  The normal answers are that they run out of money or fail to get their product to market fast enough.

But Why?

I have to ask, “Why do they run out of money? Why do they fail to get to market quickly?” It’s the answer to these why questions that can provide great insight for other start-ups and entrepreneurs.

The curse of the start-up is lack of focus!

In most start-ups there are so many cool and exciting things to work on, new ideas to bruce-leepursue, new functionalities to add.  One of the most frequent phrases heard inside many start-ups goes something like this: “Wow, wouldn’t it be cool if we could  . . ?“, or another version, “What if we added this . . . ?”  One entrepreneur I spoke with recently said this about his company: “It’s organized chaos around here, with an emphasis on the chaos!”

I believe many start-ups fail due to lack of focus on the few key success factors that will get them from start-up to sustainable business. Not because they don’t know what these key success factors are, but because they don’t religiously focus on them enough. Chasing new ideas and new functionality may be exciting and stimulating, but it wastes time, energy and cash, and all the while the market keeps moving away from them.

An Execution Roadmap

Discipline and focus are hard things to instill in a start-up and they need help, an execution process if you will, to avoid the “what if we . . .” syndrome. Too may start-up are long on ideas and short on process, yet a few appropriate business processes can be critical in moving from start-up to sustainable enterprise.

One important process for the start-up is to implement and use a robust Goal Alignment and Execution Roadmap.  Using such a process keeps the important tasks and initiatives in constant focus and aligns the entire organization around those few critical success factors.  Once a Goal Alignment and Execution Roadmap is developed, it becomes easy to check each new idea or proposed functionality against the roadmap, using the simple questions: “Is this critical to our overall success?  Will it help deliver our end goal, or is it just a cool idea?”

A good Goal Alignment and Execution Roadmap has the following elements:

strategy flow

Which can then be easily turned into a Roadmap, with a traffic-light system for keeping everyone focused on the overall delivery of the business results.

SoaP traffic

Such an execution roadmap helps not only keep everyone focused on the important activities and goals, but is an excellent tool for communication, getting everyone on the same page, real-time updating, accountability, governance and open transparency.  One of the joys of working in a start-up is knowing everything that is going on and seeing how each person’s actions fit into the overall goal of building a successful enterprise.

That’s been one of my mantras – focus and simplicity. Simple can be harder than complex: You have to work hard to get your thinking clean to make it simple. But it’s worth it in the end because once you get there, you can move mountains.  ~Steve Jobs

To learn more about the organizational benefits of an Execution Roadmap and how to build one for your company, see FASTBREAK: The CEO’s Guide to Strategy Execution, available in paperback and eBook from Amazon.

Thanks for joining the conversation.

 John R Childress
Senior Executive Advisor on Leadership, Culture and Strategy Execution Issues,
Business Author and Advisor to CEOs
Visiting Professor, IE Business School, Madrid

e: john@johnrchildress.com
Twitter @bizjrchildress

Read John’s Blog:

John’s Business Books Website

Just Published: LEVERAGE: The CEO’s Guide to Corporate Culture

Read  The Economist review of LEVERAGE
Also on Amazon:   
FASTBREAK: The CEO’s Guide to Strategy Execution

PS: John also writes thriller novels 

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Just What Do You Mean by Leadership Development?

dunce

One of my favourite business stories:

 One day Little Johnny came home from school and asked his mother why Dad was always working late and why he had to bring work home as well.  Mommy replied that daddy has a very important job and can’t get all his work done at the office so he has to work in the evenings as well.

Little Johnny thought for a moment: “Then why don’t they put Dad in the slow group?”

In a recent Deloitte study  on UK Human Capital Trends 2014, leadership development ranked the number one concern for UK companies.  I suspect a global survey would find the need for more leaders and leadership development to be high on most senior executive’s wish list.

But what exactly do we mean by “leadership development”?

When I look across my years of experience and talk with senior executives, I find a wide range of differing definitions.  Some are adamant that leadership development means finding and training high-potential managers and executives for senior executive roles. Giving them the various experiences, jobs and advanced business training required to step up into senior leadership positions.

In other cases, “leadership development” is seen as either coaching for special needs, training for skills, personal development and communication training, and even team building programs get lumped under leadership development.

And who are the most likely recipients of the majority of leadership development? Managers and mid-level executives of course!

But could we be missing something important?  What if instead of focusing on high-potential managers and executives, we decided to build a “culture of leadership” at all levels? Which might have the greatest ROI and impact on company performance, leadership training for advancement or developing leadership skills at all levels?

Leadership is taking accountability and solving problems.  ~Colin Powell

Developing leaders or developing leadership?

Every employee can be a leader, no matter what level.  Especially if we define leadership as a set of behaviours and not just job or function knowledge.

Instead of asking: How do we develop key staff for higher level positions and responsibilities; perhaps we should be asking: How do we instill leadership behaviours in all employees?  

drucker decisions

Leadership is not knowledge as much as it is action; being accountable to fix it or see that it gets fixed, help a customer rather than passing them to someone else, solving problems rather than pushing them upwards or just saying, “sorry, not my department”, or “I’d like to but I don’t have the authority . . . “

What if your company had a fundamental culture of leadership? What might that look like?  The benefits are many: fewer lost customers, faster problem resolution, greater teamwork, more innovation and creativity,challenge ideas to make them better, everyone takes accountability for safety, quality, ethics, customer satisfaction.

A Culture of Leadership is far more effective than developing more senior executives.  Think about it.

And thanks for joining the conversation.

John R Childress

Senior Executive Advisor on Leadership, Culture and Strategy Execution Issues,
Business Author and Advisor to CEOs
Visiting Professor, IE Business School, Madrid

+44-208-741-6390  office
+44-7833-493-999  uk mobile
e: 
john@johnrchildress.com
Twitter @bizjrchildress

Read  John’s blog
Business Books Website

Just Published: LEVERAGE: The CEO’s Guide to Corporate Culture

Read  The Economist review of LEVERAGE
Also on Amazon:   
FASTBREAK: The CEO’s Guide to Strategy Execution

PS: John also writes thriller novels 

 

 

 

 

 

 

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