How to Engineer an Agile Corporate Culture

bad knees

 

“I finally figured something out. Agile development is a culture, not a process.”   ~Jeff Patton

I have a bum knee.  Actually it’s more than bum, it’s truly dysfunctional, especially after running 15 marathons between the age of 45 to 50, on a right knee where the interior meniscus had been removed 25 years earlier. Long before keyhole surgery.

I don’t run anymore and to be honest, sitting for long periods causes my knee to stiffen up.  The knee action just seems to freeze up and it takes a bit of awkward walking to loosen things up and return to a more fluid stroll instead of a hobble.  The fact is, my knee gets stiff if I don’t move it frequently.  Movement seems to act as a lubricant making the joint more agile and flexible.

Pulling Taffy_thumb[1]The same is true with taffy candy.  Let it sit and it hardens, keep stretching and pulling it and it remains soft and pliable.

So what’s all this got to do with an agile corporate culture you ask?  Lots!

Creating an Agile Corporate Culture:

We all know that corporate culture impacts business performance, both positively and negatively.  And that culture can be a significant barrier to organization change initiatives. In fact, many estimates go as high as 70% of business change initiatives fail due to a rigid corporate culture.

And there is ample evidence that an agile culture improves long-term sustainability and overall business performance.

So, how to develop a more agile corporate culture?

One important action is to move people around.  Don’t let them get ossified and build up mental and work habits by staying in one job or one function too long.  The key to functional excellence, contrary to traditional thinking, is not sticking with the same function for a long time, but continuous learning about the function and how it relates with the other functions and supports the overall business.

Most companies have reduced the amount of cross-functional training that goes on inside the organisation.  Over the past decades we have inadvertently created narrow specialists instead of savvy and agile people who understand how the business works and how their chosen function fits into the overall business model of the company.

What is the frequency of cross-functional learning in your company?  How often are people at all levels given assignments in other functions? How often do we send people to conferences that are not function-specific so they can learn more about the overall business world and customer experience?  Do we make cross-functional knowledge a requirement for advancement?

This is how to create an agile culture where people see change as another learning adventure.

Life is either a daring adventure, or nothing at all.  ~Helen Keller

Written and Posted by: 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,

On Amazon: 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

Posted in corporate culture, Human Psychology, John R Childress, Organization Behavior, Personal Development, strategy execution, Uncategorized | Tagged , , , , , , , , , | Leave a comment

In Search of the Real Corporate Culture

There is nothing more deceptive than an obvious fact. ~Arthur Conan Doyle

As a young boy I read most of the Sherlock Holmes books, watched the old black and white movies on TV late at night when Basil Rathbone was the quintessential Holmes. And of course I watched all the new Sherlock series with Benedict Cumberbatch and Martin Freeman and can’t wait for the next episodes.

What I really like about the Holmes mysteries is that many of the major clues are usually in plain sight, and yet everyone misses them, except Holmes of course!

A Clue About Corporate Culture

Corporate culture is getting a lot of attention these days, and rightly so since we have some pretty strong evidence that culture impacts performance, both positively and negatively. We also know that culture is a complex mixture of many elements including shared beliefs, habitual ways of working, company history, strength of the on-boarding process, company policies, and of course, the behaviour and actions of the leadership team.  In addition there is a lot of focus on one of the outcomes of corporate culture; employee engagement, with the argument being that the more “engaged” employees are with the company and their fellow workers the more productive and innovative they are.  And again there is good evidence, mostly correlative, that high engagement levels lead to better employee productivity and openness to change.

So, an intense focus has been put on the leadership team and employee engagement. But aren’t we missing something?  There is a very important group in the middle between executives and 1st and 2nd level employees: middle management.

I’ve been promoted to middle management. I never thought I’d sink so low.  ~Tim Gould

I believe that middle management attitudes and actions (how they behave in the workplace and in daily work situations) have much larger influence on the overall corporate culture than most people realize, and yet in culture study after study they are virtually ignored, the focus being on leadership and employee engagement.

Yet in many ways, middle management determines the culture. The role of leadership is to set direction, develop the business strategy, determine ways to beat the competition, and also establish the internal groundrules (what some call values or operating principles). And of course at the employee level is where these are put into practice, where the work gets done and the customer is dealt with.  But the vision, values, groundrules and objectives never come directly from the CEO or the senior team.  They are interpreted by middle management!

Middle management are the translators, and we all know that no matter how fluent they are, translators often get it wrong and can easily use the wrong word for a totally different meaning.

UN-translators-003

And since middle managers are often left out of senior meetings where issues are discussed and decisions made, they often do the best they can to translate accurately. Yet many middle managers also feel disenfranchised, especially in a culture where many of the upper management positions are filled from the outside and personal development opportunities are slim.

Middle management is an important part of the company performance equation, yet most companies focus more development time and money on the leaders and front-line employees than on middle managers. Yet middle managers have a great deal of real influence on how work is done, beliefs about leadership and the company, and the lives of day-to-day employees.

This graphic shows the important role of middle management in determining the culture at the front line. And it is at the front line that most customers experience the culture of the company.  Customers don’t sit in the Executive Conference Room, but they do sit in the waiting room at the hospital or stand in line at the check-out counter, or try to get a problem resolved from the Call Center. It is easy to see how a culture can get out of alignment with the vision, values and strategy and in some cases actually become a barrier to execution, innovation and change.

Middle Mgt Translators

When was the last time your company spent as much time and development dollars on middle management as they do on senior executives and front-line employees? When was the last time middle managers were invited to sit in on upper management meetings? When was the last time middle managers were asked to speak or present at company meetings, or Board Meetings, or conferences?

Want to reshape your corporate culture?  Don’t forget to recruit the key translators, middle managers, onto your change team. While organizations may be shadows of their leaders, culture at the employee level is a shadow of middle management!

Elementary, my dear Dr. Watson!

Written and Posted by: 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,

On Amazon: 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

Posted in consulting, corporate culture, Human Psychology, John R Childress, leadership, Organization Behavior, strategy execution, Uncategorized | Tagged , , , , , , , , , , | Leave a comment

The Rights and RESPONSIBILITIES of Corporate Leadership

 

I recently read what to me was a very disturbing article published in the INSEAD online magazine, KNOWLEDGE.  Normally I enjoy reading their articles as INSEAD has some very fine business academics and some well thought through research findings. But this article was different.

The title was “Who is Responsible for Corporate Misconduct?”.  The gist of the article centered on the academic debate as to whether or not the corporation or individuals should be held accountable for fraud and misconduct.

The article began by exploring the growing fines and now legal proceedings against Volkswagen as a result of its emissions cheating scandal.  While the article rightfully acknowledged that a scandal of such proportions over a long period of time could not be the work of just a few rogue engineers and that senior management must have somehow been complicit and created a corporate culture of performance pressure to “make the numbers look good”.

But then the article focused on what to me was a naive and meaningless issue: whether or not a corporation, as an entity, is morally responsible for its actions. The article, in a thinly disguised attempt to promote the authors’ new book, The Moral Responsibility of Firms, took up both sides of this philosophical question: “Whether firms should assume responsibility for individuals’ actions.”

One side of the debate argues that it is the individuals inside the corporation, not the corporation itself, who should take responsibility for actions taken in the name of a firm.  The other side of the argument proclaims that it is best to fine the corporation for moral and ethical misdeeds first, then attempt to seek out those more directly responsible.

Finally at the end of the article comes a meek suggestion.

“Most scholars of business ethics agree that corporations should be doing more to create a culture where bad behaviour is neither condoned nor ignored, and where misdeeds are not covered up but are attributable to both individuals and organisational factors. Better appreciation of moral responsibility in firms will allow managers to structure internal incentives, rules and policies to achieve the economic objectives of firms in an ethical manner. It will also help in providing an appropriate external legal framework to encourage good business conduct.

The difficulty for me in all this business philosophy posturing has to do with the facts.  Between 2009 and 2015, major global banks have been fined a total of over $300 billion for fraudulent activities as governments’ solution to punish and therefore eliminate such actions.  But even with stiff monetary penalties in the billions plus added regulation and more frequent audits, fraudulent behaviour continues. Consider the recent massive fines levied against Wells Fargo for opening millions of fraudulent credit card applications and accounts in order to meet sales quotas.

Obviously, treating the corporation as the perpetrator is not the solution. And large fines aren’t a deterrent.

Rights and Responsibilities of Leadership

When the rights outweigh the responsibility, leadership is lacking.

When it comes to the rights and responsibilities of leadership, I’d say the Navy is the authority on that matter and corporate executives and regulators should take note of where the real responsibility for the conduct of the crew and the actions of the ship really lay.

“On the sea there is a tradition that with responsibility goes authority and accountability. Men will not long trust leaders who feel themselves beyond accountability for what they do. And when men lose confidence and trust in those who lead, order disintegrates into chaos and purposeful ships into uncontrollable derelicts”     – Wall Street Journal – Editorial 14 May 1952

The Navy holds the captain ultimately responsible. Period.  A captain whose ship or crew is deemed unfit will never captain another vessel and is often reduced in rank, if not court-martialed.

Yet not one CEO of a major bank cited for fraudulent activities has been convicted or jailed. Some have resigned, but it’s hard to say in disgrace when they walk away with a severance package of millions.

When those in leadership positions are held directly responsible for the actions of the people they lead and the cultures they create, those in senior leadership roles may take their responsibilities more seriously than their rights and perks.

The quality of an individual’s leadership is not determined by the size of their paycheck, but by the value they create and the lives they improve along the way.

Written and Posted by: 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,

On Amazon: 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

Posted in consulting, corporate culture, Human Psychology, John R Childress, leadership, Organization Behavior, Self-improvement | Tagged , , , , , , , , , , , , , | 1 Comment

Corporate Culture as an IED

“The greatest producer of casualties on the battlefield in the 20th century was artillery, and my assessment is the IED is the artillery of the 21st century,”  ~Lt. Gen. Michael Barbero

An IED is an Improvised Explosive Device, or in simple terms, a bomb, sometimes detonated by remote control and other times with pressure from a vehicle or even a footfall.  They have become the weapon of choice for terrorists who are outgunned in a traditional fight but can kill and maim without engaging their enemy.  And they are inexpensive to build, but can cause great havoc to a traditional army.

I recently read a fascinating article with the title: The IED: The $30-Bombs That Cost The U.S. Billions.  Essentially, IEDs are cheap to make, can be done by almost anyone with just a little training, can be hidden from view to be almost invisible, and easily detonated with a cell phone or pressure sensor. A nearly invisible hazard that causes great damage.

Corporate Culture as an IED

After reading that article it dawned on me that corporate culture can be very much like an IED.  We all know that culture impacts business performance, either positively or negatively and a culture that is not in alignment with the strategy and goals of the company can actually derail otherwise excellent business initiatives.

Yet while most culture experts talk about values, the role of leadership shadows and try to measure the overall corporate culture, I believe they are missing a hugely important element of corporate culture.

Culture can be a significant business risk.

Just like an IED is a risk to people driving or walking along a road or shopping in a crowded marketplace, culture can be a risk to business performance and the well-being of employees at all levels.

Let me explain.  First of all, there is no such thing as an “overall corporate culture”.  Culture is not one unified thing, but instead a collection of subcultures, many of which have strong group beliefs about work, the business, management and their jobs.

Subcultures exist in all organizations and are a result of both peer pressure to fit in with the group (team, department, etc.) and the very real human need to belong to a group.  And the importance of belonging to a defined group is hard-wired into our DNA from our early ancestors.  Individuals couldn’t survive alone, so being accepted into a tribe meant survival.  And the way to be accepted was to blend in, not stand out. To accept the norms of behaviour peculiar to that tribe. And those tribal behaviours were then reinforced by peer pressure. So when a new employee enters the workplace for the first time, they have an innate need to fit in, to belong to a group, to be accepted.

And in every subculture there is an informal leader who either by force of personality or experience or wisdom is trusted and respected and tends to set the basic ground-rules and beliefs of the group. He or she may be the lead engineer with the most experience, the head nurse, the Master Sergeant, or the person who has been in the company the longest and has the most insight into how to survive in the job.  Rarely are the informal leaders on the radar screen of HR as a key influencer or high potential, yet they have as much or more power over how things get done as any senior executive, probably more.

And this is how culture can become an IED.  When a subculture is not aligned with the overall business values or strategy, it can easily block a new change initiative or business improvement attempt.  And there are times when the subculture becomes an even greater risk to the business.

Think about the subcultures of greed and fraud within investment banking that led to the global economic crisis of 2009.  Or more recently the subculture within Volkswagen of a group of engineers and managers falsifying emissions data and unleashing a PR and financial disaster for the company.  Or the 5-years of opening over a million fraudulent bank accounts by Wells Fargo for customers who didn’t exist in the effort to satisfy the subculture pressures of the sales and marketing department.  And a subculture can even be lethal, as we have seen in the explosion of the Deepwater Horizon Oil Rig in the Gulf of Mexico and the death of 11 workers, caused by a subculture of pressure to make schedule and reduce costs that led to excessively risky decisions.

Keep Your Eyes Peeled

The best defense against harmful IEDs in a war zone are the eyes of the soldiers, keeping a lookout for the telltale signs of roadside bombs.  I am encouraging senior managers to look for the subcultures that exist within their organizations, to identify the informal leaders, to work with them to align the subculture with the overall values and strategy of the company.

And The Biggest Risk?

But the biggest risk is not the subcultures themselves, but the fact that in most companies senior executives and leaders don’t know where the subculture are and how they are influencing, either positively or negatively, company performance and employee engagement!

 You get the culture you ignore, just as you get the culture you actively create.

Written and Posted by: 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,

On Amazon: 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

Posted in consulting, corporate culture, Human Psychology, John R Childress, leadership, Organization Behavior, strategy execution | Tagged , , , , , , , , , , , , | Leave a comment

A Deeper Look at Corporate Culture

The deeper we look, the more we learn

As a young man I picked up a copy of a little book by James Allen, As A Man Thinketh.  I stuffed it in my backpack and finally pulled it out on the Greyhound bus heading home from college for the Thanksgiving holiday.  In the glow of the overhead reading light I read this amazing little book three times during the long bus trip. To me that evening on the bus was an epiphany and gave me a fundamental principle that has guided my business consulting, and my personal life ever since.

Men do not attract what they want, but what they are. ~James Allen

The lesson is very simple:  our thoughts create our reality.  Not physical reality, but our psychological reality, what we believe and how we feel about ourselves, other people and the world around us.  And what we believe obviously drives our behavior, which in turn influences the results we create.  Sounds fairly straightforward and at a simplistic level it seems like all you have to do is “think positive thoughts” and everything will turn out wonderful.

But it doesn’t really work that way, does it? When we delve a little deeper into how the human mind works we learn that only 5% of our thoughts are conscious, while the vast majority of our thinking takes place at the subconscious level.  Most people are totally unaware of the thoughts going through their mind at any given time.  So trying to consciously think “positive” thoughts won’t really shift behavior if the majority of the time our subconscious thoughts are giving an entirely different message.

Every action and feeling is preceded by a thought. Thought is the genesis of our happiness, and our despair.

Thought, Culture and Business Performance:

What’s all this got to do with business performance you must be wondering?  Quite a lot actually, because Corporate Culture resides in the unconscious, habitual thoughts and beliefs of employees. A few presentations on corporate values or executive speeches on vision are akin to addressing the 5% of our conscious thinking.  During the presentation heads nod, a few people promise to do better, then it’s back to work and the unconscious thoughts take over.  “My boss is such a jerk!  Nobody cares if I have a good idea or not. I can’t wait to go on my break. Customers are so difficult, etc.”

And that’s the problem with most culture change programs  They target the conscious, logical thought processes, but miss impacting the real cause of the culture; the habitual and collective unconscious thought patterns of employees. In most cases the business would be better off using the money spent on culture trainings to redecorate the employee lounge.

Corporate culture can only be changed from the “inside out”.  Until all of us, executives, managers and employees accept the accountability for the current culture (it’s a product of our collective beliefs and thoughts) a shift in culture will elude us.

Organisations do not attract what they plan, but what they believe about those plans.

Written and Posted by: 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,

On Amazon: 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

Posted in consulting, corporate culture, Human Psychology, John R Childress, leadership, Organization Behavior, Self-improvement, strategy execution, the business of business | Tagged , , , , , , , , , | Leave a comment

The 7 Corporate Culture Questions Every CEO Should Ask

Leadership and learning are indispensable from one another.  ~John F. Kennedy

I like questions.  Questions make people think.  Statements may go in one ear and out the other, but a good question will bounce around inside your head until you come up with an answer.  And good questions often breed even better questions.  And the outcome of all these questions is often a new insight.

Executives have been trained to make statements, to deliver facts and information via PowerPoint and to overwhelm others with massive spreadsheets no one can understand. It’s what I call “razzle – dazzle” management.  Energetic and impressive, but not really educational or insightful.

Education comes from the Latin word, “educo” which roughly translated means to draw out.  Real education then comes from the ability to draw out insights and answers from the student rather than pour in facts and data.  And one of the best ways to draw out new insights for the learner is to ask questions!

While must time is spent in senior team meetings talking about sales, products, costs and profits, little time is spent on corporate culture, even though culture directly impacts performance, and a recent survey of 1,900 CEOs and CFOs rated culture as the number one driver of business value.

7 Important Culture Questions:

  1. What is the business case for culture in our company?

Before you can really use the power of culture as a business value driver, it is important to try to understand the “cost of a poor culture” and the business benefit of a culture that is aligned with your business strategies.  One of the ways to get your team to understand the business case for culture is to talk about how cultural barriers such as poor cross functional handoffs, withholding information, not following up with teammates in a timely manner, and other dysfunctional behaviours get in the way of project delivery and execution on important strategic initiatives.

In the case of the recent incident at United Airlines where a passenger was forcibly removed due to overbooking, the day after the story broke the market value of the stock was reduced by $1.8 billion. That’s a big case for culture.

Another broad rule of thumb is to ask your team how much of a productive days work is wasted through blaming, finger-pointing, slow responses, lack of trust of other departments, poor teamwork, poor customer service, etc. Usually the number is around 30%.  Take your total employee cost figure and multiply it by that number (say 30%) and you get the cost of a poor culture.  It’s a staggering figure in most cases.

2.  Is our culture an asset or a liability? How would we know?

Does your team know the current strengths and weaknesses of your current culture?  Have they done a culture assessment?  Have they held conversations with their team about the culture. A strong culture can be a significant competitive advantage, since anyone will sooner or later copy your products and services, but they can’t copy your unique culture.

3.  Is building and sustaining a high-performance culture a part of our formal, written business strategy?

When an initiative shows up on the formal strategy document and specific accountabilities get assigned, more often than not those initiatives get funded and resourced.  Have you put a High-Performance Culture as one of your key business strategic initiatives?  Do you have specific plans with milestones and deliverables against it?  Is it properly funded or just a “hope to improve” item?  What gets measured and reported often gets done!

4. Is alignment with culture and values a part of performance reviews, bonuses and promotions?

In many companies, values and behaviours are just words on the wall or in the employee handbook and have little impact on the day-to-day work.  By putting culture and values as a significant part of performance reviews, promotional criteria and bonuses, they suddenly become more important. And if the scores are given through a 360-degree evaluation process, they have even more power to influence behaviour.

5.  Have we mapped the various subcultures and their alignment with the overall values and strategy of our business?

One of the major recent insights into corporate culture is that most companies are composed of numerous subcultures rather than one overall corporate culture. And these subcultures can be strong influencers of “how things get done around here”.  If you don’t understand the subcultures inside your company, then you really don’t understand your operational culture.  In some cases, subcultures are strongly aligned with the vision, values and business strategies.  And in other cases they present significant barriers to productivity and positive change.

6.  Do we as a senior team talk about culture as often as we talk about costs, profit and business performance?

Much of corporate culture is developed through stories and the things people talk about the most.  Stories of hight creative or accountable individuals are often told to new employees long after the individuals have retired or left. Stories contain the viral seeds of your culture.  If the senior team routinely talks about sales, costs and profits, but not about values and cultural behaviours, the few times culture is mentioned it will be discounted, because everyone “knows how important cost are to management, not culture”.

7.  Does our new employee hiring and on-boarding process help people understand our desired culture and why it is important?

When was the last time the senior team sat through a new employee indoctrination process? To often these are becoming menu driven and few put much emphasis on expected behaviours and culture. It is important to remember that if you don’t indoctrinate new employees, at all levels, in the company culture, they will bring their old company culture with them as the default.  And when many employees come on board without a good acculturation process, you will wind up with a very fragmented culture.

These 7 questions, as good as they are, often lead to even better questions being asked and explored by your leadership team and will undoubtedly spark a new focus in everyone’s part on the importance of culture to your business success.

And a bonus question:  How often do we have open debates and reviews of our culture and values?

Sometimes asking the right questions takes more courage than finding the answers!

Written and Posted by: 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,

On Amazon: 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

Posted in consulting, corporate culture, John R Childress, leadership, Organization Behavior, strategy execution | Tagged , , , , , , , , , , , | Leave a comment

The 3 Deadly Sins of Poor Leadership: Part 3

bad-customer-service-2

In previous postings I began a series on the sins of poor leadership. The first article,  Part 1,  focused on not moving fast enough to replace poor performers, either for performance or behavioural reasons.  The 2nd Deadly Sin of Poor Leadership detailed how the avoidance of face-to-face communications and regular one-on-ones leads to lack of respect for the CEO and poor commitment among the leadership team. The 3rd Deadly Sin of Poor Leadership is one that many CEOs and business leaders know is debilitating, but somehow get tripped up by it over and over again. While this is the third and last in this series on poor leadership behaviours, it is by no means the mildest, and in fact may be the greatest cause of poor business performance.

Profit in business comes from repeat customers, customers that boast about your project or service, and that bring friends with them.  ~W. Edwards Deming

Everyone in the corner office realises how important it is to know and understand their customers, whether it be retail shoppers or B2B customers.  Understanding the needs and wants of a customer gives an organization the opportunity to produce products, services and a customer experience that directly fulfils the customer’s needs.  And the better the customer understanding, the better you can out manoeuvre the competition.

Young, trhollisterendy teens (with money from Mom and Dad) shop Hollister, Gilly Hicks and other boutique retailers because the clothes fill their social and style needs, and the shopping experience is designed directly for them.  At Hollister they appeal to a definite market niche, using young models to signify the classic California “Dude and Betty” look.

MRAPSOn the B2B side of the business equation, Textron Marine and Land Systems has an enviable backlog of business and orders for its various products. Military Armoured Vehicles, used to protect Allied forces in hostile situations where roadside bombs have all but destroyed the once ubiquitous military Hummer vehicles.

By getting close to their customers, the service men and women on the ground in hostile areas, and understanding the changing nature of IEDs (Improvised Explosive Devices, also known as homemade roadside bombs), they are able to build vehicles that deflect and counter such terrorist threats.

hovercraftAnd by better understanding their customer’s amphibious needs, the team at TMLS were able to innovate and recreate the old hovercraft for modern warfare.

But many CEOs and business leaders somehow forget the importance of being close to the customer.  It seems to me they get caught up in internal politics, useless meetings called by their corporate owners, endless debates about NOP, EBITDA, sales $$ per employee, and budget meetings that take up so much of the day, and very few of these meetings have the customer on the agenda! With all this internal focus there is no time left to go sit with customers and do what business leaders should be doing – listening and understanding customer needs and requirements!

Too often the question asked of heads of sales is “How much did we sell this week!” instead of “What did you learn about our customers’ requirements this week?”  Sales dollars are an outcome of understanding and fulfiling customer requirements better than the competition.

Looking at the average CEO’s calendar will tell the real story. No matter how much the slogans broadcast “Customer First”, the CEO’s day is filled with internal meetings, not customer meetings.  Maybe that’s their job, but if the customer is not at the heart of many of these meetings, then are they really creating value or just managing numbers?

Those CEO’s who get caught up in the internal aspects of their job and pay little attention to the external aspects actually do great harm to their company by not putting the organisation’s focus on the most important ingredient in sustainable business success, the customer!

Written and Posted by: 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,

On Amazon: 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

Posted in consulting, corporate culture, John R Childress, leadership, Organization Behavior, strategy execution, the business of business | Tagged , , , , , , , , , , , | Leave a comment