Culture, Competitiveness and Underutilized Human Capital
- Posted by J. Nirdosh Reddy
- On November 6, 2022
- Company Culture
Sources of competitiveness
What are your sources of competitiveness? Technology? People? Strategy? Or something else?
Any enterprise’s competitiveness is determined by its technology, human resource capabilities and overall strategy of product and service offerings. However, recent history has shown that – given the same or similar technology, human resources and products – some companies perform much better than others.
This is because there exists a gap between intrinsic capability – what an enterprise is capable of achieving – and what it is actually delivering. This gap represents untapped potential – a hidden treasure – waiting to be discovered and harnessed. Changes in work culture hold the key to this hidden wealth.
Work culture is how management and employees think and behave toward their customers – external as well as internal, their suppliers – external as well as internal, and their coworkers.
Six guiding principles of high-performance enterprises
One way to get an idea of the current work culture of your enterprise is to assess how well you are practicing the 6 guiding principles characteristic of high-performance enterprises, shown below:
- Salaries are paid by satisfied customers
- Results come from processes
- Continually improve processes
- Manage with facts, not opinions
- Management must establish priorities
- Involve everyone through teamwork
These guiding principles have a profound impact on the way businesses conduct themselves. They touch every individual in an organization. They form the core of its culture. Use the diagram below to map your work culture.
Work culture self-assessment
Where does your enterprise stand on each of these principles?
In many organizations, the mindset of the leadership team might have changed as a result of their exposure to the emerging concepts of management. The key question to answer is ‘have our management practices evolved? Are revised practices rewarded within our enterprise?’
As you go through your self-assessment, keep in mind that:
- Many of these phrases have become buzzwords
- Familiarity is not same as in-depth understanding
- Implementation is not same as merely ‘knowing’
While more elaborate diagnostic assessment is possible, reflect on the following questions to get an idea as to how well these guiding principles are institutionalized in your enterprise.
- Do all managers and employees understand that their salaries are paid by satisfied customers? Do they support each other? or, do they try to meet their targets without any regard for how their actions affect others?
- Do managers understand that results come from processes? When things go wrong, do they ask where processes are breaking down, or, are they still asking ‘who did it’?
- Are all key processes being continually improved, or do managers say ‘we have been successful, so, don’t rock the boat’.
- Is important data readily visible, even if it shows that the performance is not up to mark? or, is the data buried, and therefore, one has to dig for it?
- Are management’s priorities based on data or opinions? Are they focused on preventing process breakdowns and improving process performance or are they driven by arbitrary targets?
- Are all employees involved in improvement projects? or only a select few? Do managers believe that every employee can make a contribution?
On a scale of 1 to 10, high performance enterprises score over 9 on each of these dimensions. If your scores are over 9, you are world class. You only need to maintain them. However, if your scores are lower, then you would benefit from undertaking initiatives to improve them.
Let us take the example of Enterprise A which has scores of 5, 3, 3, 3, 5 and 2 on these six dimensions (fairly typical of enterprises operating under conventional management styles). In the Figure below, the red area covered by these scores is an indicator of its competitiveness relative to its potential. The white space surrounding this area reflects the untapped potential available for this enterprise. It represents opportunity for growth.
Transformation of work culture
As discussed in an earlier post, the Anaar Process Review System (APRS) Platform – a cloud-based process management tool – helps enterprises streamline processes, improve alignment, and clarify accountability.
As Enterprise A progresses through various stages of implementation of APRS, the engagement of employees increases substantially. Its human capital will be better utilized unleashing the so far untapped potential of your employees. Its work culture and consequently its competitiveness improves.
- As the workforce internalizes the concept that ‘salaries are paid by satisfied customers’, satisfying internal and external customers becomes the pre-eminent goal.
- As leadership starts asking ‘where our processes are breaking down, not who did it’, employees begin to suggest ideas for improvement.
- As emphasis shifts from status quo thinking to continual improvement, improvements become more common.
- As the fear of data is removed, more accurate data rises to the surface.
- As management priorities become more rooted on facts, implementation of ideas becomes faster and more effective. Strategies get executed properly.
- As management gives more opportunities for employees to be involved in making improvements, self-esteem of employees rises.
Its competitive picture changes significantly as shown below.
- Its technology will be better applied.
- Its human potential will be better utilized.
- Its strategies will be better executed.
It will be on its way to becoming a high-performance enterprise. Over time, its competitiveness approaches its intrinsic capability.
In summary, better alignment and accountability leads to improved work culture, better utilization of human capital, improved competitiveness and higher profits!
Enjoy your journey to peak performance!
- Culture, Competitiveness and Underutilized Human Capital - November 6, 2022
- The Power of Process-Oriented Thinking - October 24, 2022
- Do You Know Your Enterprise? - October 16, 2022