Strategy, Culture, Knowledge Management, Firm Performance: How Are They Linked?

StrategyDriven Corporate Cultures Article | Strategy, Culture, Knowledge Management, Firm Performance: How Are They Linked?
 
Organizational culture includes three dimensions of collaboration, trust and learning. The cultural aspect of learning is enhanced though providing further opportunities and information sharing. Executives can enhance knowledge sharing by providing access to knowledge, and stimulate new ideas and knowledge generation, transfer an individual’s knowledge to other members and departments, and improve knowledge capturing, storing, and accumulating, aiming at achieving organizational goals. Executives that employ corporate strategy can propel knowledge sharing in the company to generate more innovative ideas and solutions for new and demanding issues that come up constantly in our hypercompetitive economic environment. In doing this, executives can employ corporate strategy to share experiences gained by imitating, observing and practicing. Executives that use corporate strategy have found that it impacts learning culture through facilitating knowledge sharing throughout all levels of the organization. Corporate strategy focuses on defining and recognizing core knowledge areas, sharing organizational knowledge, and scanning for new knowledge to keep the quality of their product or services continuously improving. Therefore, corporate strategy is an essential requirement of learning culture by which knowledge is shared among people.

Further, executives have found that corporate culture impacts knowledge management. Particularly, the three cultural aspects of collaboration, trust and learning play a critical role in enhancing the effectiveness of knowledge management practices. For example, collaboration provides a shared understanding about the current issues and problems among employees, which helps to generate new ideas within organizations. Trust towards their leader’s decisions is a necessary precursor to create new knowledge. The key is for executives to inculcate a culture of trust and transparency of knowledge sharing within organizations so that informaton can be found and used instantaneously. Moreover, the amount of time spent learning is positively related with the amount of knowledge gained, shared, and implemented. Therefore, executives can reshape, and in some cases, manipulate corporate culture to facilitate knowledge management practices within departmental and business units of organizations.

Knowledge is shared and synthesized with an aim to providing higher quality products and services. This can improve firm performance in various metrics such as the customer focus, the quality of products and services, and the organizational revenue. Shared knowledge can contribute to the development of a learning organization in which people continuously grow and develop both personally and professionally. It enables organizations to actively respond to environmental changes through developing interactions and awareness from the external environment, which can in turn improve firm performance through increased sales, customer satisfaction, the quality of products and services. In fact, the key function of knowledge management is to help executives use it for employee development. In this context, training is becoming the forefront to success in large corporations worldwide. Why is this, you may ask? Because learning is a process that leads to acquiring new insights and knowledge, and potentially to correct sub-optimal or ineffective actions and behaviors that cause companies to spiral out of control. Ergo, corporate culture indirectly improves firm performance through disseminating and managing organizational knowledge that can play a crucial role in enhancing various firm metrics such as the quality of products and services and the organizational revenue.

StrategyDriven Corporate Cultures Article | Strategy, Culture, Knowledge Management, Firm Performance: How Are They Linked?In addition, executives that employ corporate strategy may enhance goal achievement. For example, corporate strategy can develop opportunities for human resources development within organizations, by assessing current situations. It has major effects on firm performance through focusing on analytical decision making process. Corporate strategy can also positively contribute to the efficiency of companies through helping companies to find better opportunities for investment that potentially leads to better financial performance for companies in terms of return on investment and profitability. Moreover, corporate strategy, which adopts basic studies to develop an effective and comprehensive vision for future, can enable companies to identify and actively response to the changes occurred in the external environment. Executives can, therefore, improve firm performance through embracing corporate strategy.

The figure provides a snapshot of how strategy, culture, knowledge management and firm performance are linked.


About the Author

Mostafa Sayyadi works with senior business leaders to effectively develop innovation in companies, and helps companies – from start-ups to the Fortune 100 – succeed by improving the effectiveness of their leaders. He is a business book author and a long-time contributor to HR.com, People + Strategy, Consulting Magazine and The Canadian Business Journal and his work has been featured in these top-flight business publications.

5 Myths About Combining Purpose With Profit

StrategyDriven Corporate Cultures Development Article |Business Culture|5 Myths About Combining Purpose With ProfitHow do we put aside the connotation that purpose and profit can’t co-exist? Let’s start with addressing these 5 myths:

1. Purpose doesn’t resonate

According to Forbes’ analysis on Cone Communications’ 2017 CSR Study, letting employees lead around social and environmental sustainability issues from within helps a company evolve into a true leader. This goes beyond being purely philanthropic…it’s identifying ways for company employees to feel vested in the future of the company and not just “what it stands for…but what it stands up for.”

2. Purpose is the same as philanthropy

Being philanthropic is not the same as being a social impact, leader. If a company seeks to achieve some sort of social, environmental or economic development goal, philanthropy won’t cut it alone. Those businesses that have truly ingrained purpose and mission into their way of operating are doing more than giving away money or time. They are learning that changing their operations to address social impact challenges is pivotal to making the world better through their decision making, and not just by writing a check. When companies recognize that there are other needs outside of the philanthropic domain for their active engagement, making the world a better place is not only possible, it’s inevitable. And guess what?! Companies are making money this way too!

3. Companies will stay profitable no matter their view on “purpose”

Companies must answer to many constituents: employees, customers, partners, shareholders, boards, etc. ? This puts pressure on companies to be almost everywhere at once and be everything to everyone. They must make good products, provide an excellent level of service, and also invest in employee engagement and internal operations, processes, etc. It’s no wonder that many companies scoff at the added responsibility and cost of investing in other programs around “purpose.” The realization that many companies have made, however, is that these “outside” programs are way more than “nice to have.” They are indeed critical for many consumers that prioritize this level of commitment to issues other than making money.

4. Bigger companies don’t need to worry about purpose because they are already making so much money

I can name six massive companies investing in social enterprises or socially-responsible, purpose-oriented brands, not just because it’s the right thing to do, but because these brands are making (more) money from them. General Mills and Annies. Kelloggs and Kashi. Clorox and Burts Bees. I could go on. Companies recognize that to evolve and stay relevant, and to make an impact in a long-term, sustainable way, they must consider different types of models, like social enterprises or B Corps, as viable and necessary partners. The notion of purpose is evolving as new ways of doing business take into account the personal and professional impact of doing the right thing.

5. Businesses are putting purpose before profit

Last year I was in Kenya for a convening of big brands and social enterprises. I was asked to facilitate a session with the big brands on partnership for social impact, and as I sometimes do in these scenarios, I led the 50 or so attendees in a “four corners” exercise where participants self select which corner of the room to stand in based on their response to: “What is the main role should business play in society?”

The answers were: (1) produce goods for consumption; (2) advocate for pro-business government policies; (3) inspire change in local communities; (4) invest in innovation.

Which answer do you think everyone picked?

Of the 50 or so participants in the room, 49 traveled to the corner assigned to “produce goods for consumption.”

A few did change their answers after we discussed what a business role in society looks like. That’s because while businesses exist to produce goods for consumption, they also exist for all of the other reasons we gave in our exercise. This may seem lofty, but it’s happening. The growth of social enterprise models is just one example of the recognition that making money and “doing good” are not mutually exclusive.


About the Author

StrategyDriven Expert Contributor | Joanne SonenshineJoanne Sonenshine is Founder and CEO of Connective Impact and author of Purposeful Profits: Inside Successful Businesses Making a Positive Global Impact, out May 22.

Culture Change – Slow Down to Go Fast

StrategyDriven Article |Workplace Culture|Culture Change – Slow Down to Go FastWhen my children were taking violin lessons and were given a new piece to learn, they would start from the beginning and race through the song at breakneck speed. One day, their teacher offered an insight that radically altered how they were able to progress. He told them that if they wanted to play fast, they would first have to practice slow. Similarly, taking the time to slow down and plan improvements to workplace culture also produces more effective results down the line.

Workplace culture isn’t something you can instantly fix, swap out, or quickly reboot. It’s not like a used car you can trade in when it no longer runs smoothly. Culture change requires culture work – and success necessitates effort and attention. Rather than being daunted by this task, we need to take a breath, slow down, and intentionally chart our course forward.

We recently worked with an organization who took the advice to slow down and take the time to invest in their long-term workplace culture to heart. Their decision was precipitated by a harassment complaint that revealed many layers of dysfunction – they could no longer ignore the impact their unhealthy culture was having.

Management was distant and unaware of the tension between employees, staff turnover was high, valued customers were leaving, and the human resources department admitted they were overwhelmed with the flood of complaints. The task of improving their workplace seemed enormous, but they decided to roll up their sleeves and get to work.

Senior management started by doing a cultural assessment and mapping out a plan. They began with a number of simple fixes to jumpstart the process. They revamped their respectful workplace policy, as well as held a training day for all staff to inform them of the current cultural assessment. Supervisors and management began joining employees in the common area during breaks.

To begin the long-term work of culture change, the organization initiated dialogue with staff and instituted weekly check-ins. They also revamped their performance management process to include a quarterly focus on employees’ goals, and provided all supervisors with training on conflict resolution and how to give effective feedback. These, along with a number of other changes, started to slowly shift their workplace culture in the right direction.

Now several months into the process, they are beginning to see the positive results! Staff are happier and more engaged, which has led to better productivity and an improvement in the quality of work being done. Their human resources department feels supported by management, and complaints have dropped as supervisors gain confidence in their ability to coach and support employees.
This organization realized that it would take time to replace the unhealthy culture with a healthy one, and that it couldn’t happen all at once. As a result of their patient and intentional work, they have seen a slow but marked improvement in their culture.

Culture is often so ingrained that people take it for granted. When we recognize that there are long-standing issues that we need to address, the work ahead can feel overwhelming, but culture won’t be improved with one-off initiatives like taco Tuesday or yearly surveys. Culture develops over time, and therefore takes time to change. Taking small steps to create a culture that will become the new standard may feel like slow work, but the rewards of a healthier culture are more than worth the wait.


About the Author

StrategyDriven Expert Contributor | Wendy LoewenWendy Loewen is a mediator, facilitator, and the Training Development Specialist at ACHIEVE Centre for Leadership & Workplace Performance. She is co-author of the book, The Culture Question, and is the author of many ACHIEVE workshops including Respectful Workplace, Assertive Communication, and Performance Management. In her work as a mediator, speaker, and facilitator, she is committed to helping organizations create dynamic and engaging places of work where people care about each other, are productive, and deliver quality services and products. Wendy believes that learning is a dynamic and life-long endeavor, and with commitment, guidance, and individualized support, this process should be enjoyable and motivating.

Why Ethics are Essential for a Strong Team Culture

StrategyDriven Corporate Culture Article | Ethics | Why Ethics are Essential for a Strong Team CultureBuilding a team culture that is magnetic or lasts means better productivity, positive engagement, and higher retention. However, what has been largely overlooked by many business leaders is the essential foundation for a culture that sustains and thrives: Ethics. An understanding and common ethical language is missing for many organizations. This makes it impossible to establish a strong, cohesive culture where the interests of the individuals and the collective move forward together. In order for both the individuals and the collective whole to move forward together, a common language and appreciation for ethics is essential.

The Culture Fad

Culture is a company’s collective personality. To fit into a company’s culture, your personal attributes as a team member should be compatible with the personality of the workplace. Culture entails work environment, vibe of the people, values, and mission. Examples of cultural attributes are values like collaboration, creativity, learning, and professionalism. Culture also entails environmental preferences like a casual workplace with a dog-friendly environment. Culture entails policies and rules, like a work-from-home policy or a vacation policy. A strong collective culture fuels the individuals and therefore fuels the mission, since when the individuals are supported and motivated, they contribute toward the collective mission with energy and dedication. With a strong cohesive culture, the individuals are aligned and united around the mission, as well as around how the mission is achieved day-to-day in practice. A strong culture is one where individual peace and progress thrive, and therefore the company’s progress thrives.

Ethics as the Essential Foundation

Why are ethics essential for a strong culture to work and sustain? Ethics are principles that guide our behavior toward what is most good or guide as to what is the right thing to do in a given situation. Ethics guide how we conduct our work and how we interact with and respond to others. Aren’t these the most basic, universal actions of any organization? Surprisingly, these basic requirements can be very tough to align around without a common understanding and appreciation for what is ethical. Though the individuals in an organization may all value the work-from-home policy and free lunch, without a common understanding for how to communicate with each other, build relationships, and foster development for each person, the work environment and perks become obsolete. Though a company or team’s culture may change with time – the policies, the environment, the people, a common language for ethics are timeless. A common language, understanding, and practice of ethics is the basic foundation for any strong culture.

Modern Obstacles to an Ethical Culture

An ethical language is challenging to design and align around. Many companies define their culture as built around Integrity as a value. Most organizations describe integrity as “do the right thing” and stop there. However, this leaves many individuals asking: What is the right thing in a given situation? There are a few reasons that this isn’t so straightforward anymore. Firstly, we have become so accustomed to hearing “do the right thing” that it has almost lost its meaning. Secondly, organizations have diverse teams of individuals that have different perspectives on what “the right thing” is. Finally (and most relevant for our need for ethics now), with the fast-paced, dynamic society we live in, new products and situations arise everyday that require a newly interpreted understanding of what “the right thing”, or the ethical thing, to do really is. In many organizations, people on the same team are speaking a different ethical language and this causes misunderstandings and does not serve the mission. Many organizations believe that is human-centered action is prioritized, business progress and impact will be jeopardized. However, actually the opposite is true. If human-centered action is not prioritized, business progress and impact will be jeopardized.

Ethics in Practice

In a business environment, the culture is often professional and mission-driven, however, it so often lacks an ethical backbone. This is to say that it lacks a common understanding for what is acceptable and conducive behavior toward work and toward each other. In interpersonal situations like meetings, team projects, or when giving feedback, people do not know how to treat each other in a way that both serves individual peace and progress, as well as collective peace and progress. The result? Lack of ownership, lack of productivity, high stress, low morale, and ultimately poor retention. Teams become environments of animosity that are not aligned or focused on the mission. Without this foundation of ethics, productivity and retention are impossible. Therefore, without ethics, a strong culture is not possible. Building a culture without building it upon a common language and appreciation of ethics is like building a skyscraper on a foundation of sand. In harsh weather, when misunderstandings and debates arise, the shiny skyscraper you have built will waiver and come tumbling down.

The Solution

Ah, the good news, finally. A culture built upon a foundation of ethics is a culture that will sustain and continuously thrive. How can you build a culture that that is build upon a foundation of ethics?

To build a strong culture, you must build a common language, understanding, and appreciation of ethics into your own cultural DNA. A common language of ethics can be found in Awake Ethics. This language of ten principles is a timeless system with clear, universal appeal. The interpretation and stories from the field are from recent business experience. Next, schedule regular ethics trainings for your team every quarter. With an understanding of ethics and time to share recent experiences as a team, you will feel more confident in your own decision-making. You will have a shared team understanding about what positive, constructive collaboration and interacts look like. Finally, encourage ethics. Incorporate ethics into performance reviews and acknowledge outstanding ethical behavior. Incorporate ethics into your cultural values, as the foundational value.

A common language, understanding, and appreciation for ethics is the foundation of a strong culture. Once you have the ethical foundation in place, then feel free to add your perks, policies, and decorations. A shared practice of ethics enables individual peace and progress, which fuels collective success. Ethics align and accommodate the desires of the individuals and the whole.

Get started in building your culture upon a solid foundation of ethics.


About the Author

StrategyDriven Expert Contributor | Hilary Jane GrosskopfHilary Jane Grosskopf is the author of Awake Leadership: A System for Leading with Clarity and Creativity (2018) and Awake Ethic: A System for Aligning Your Action with Your Core Intentions (2018). She is a leadership guide, strategist, writer and Founder of Awake Leadership Solutions.

3 steps to creating a culture that retains your best employees

StrategyDriven Customer Relationship Management Article | Corporate Culture | 3 steps to creating a culture that retains your best employeesEmployees can do the minimum, or go the extra mile, and the difference between these two levels of performance, multiplied by the number of employees, can make or break a company. And when your employees are going the extra mile, it means they are engaged, and engaged employees don’t leave.

Losing employees is costly, especially if they are your best ones. Not only do they take specialist know-how and client relationships with them, but often straight to one of your competitors. And if you are operating in a context of skills shortages, which many companies are, you simply can’t afford to lose those skills you know are going to be impossible to replace.

The key to overcoming all of the above issues is culture, because as Peter Drucker famously said: “Culture eats strategy for breakfast”. Making sure your company culture is one that engages and retains your best employees is an ongoing endeavour, and there are three proactive steps you can take to build it:

1.Turn your company into a cause

Make sure you have a vision that is ambitious enough and inspirational enough to become a cause that employees rally around and makes them want to go the extra mile. Engagement for engagement sake will only ever bring short-term results; engagement around a cause, however, will keep your employees motivated for years.

Most companies have a vision, but with confusion rife around what a vision actually is, rarely do we find one with that essential emotional ingredient that makes employees put aside personal agendas for a collective one that appears much more attractive.

2. Set a minimum standard for people management

“People don’t quit companies, they quit their bosses”. How often have you heard this said? And how often on exit interviews do we find it to be true! This simple fact, disheartening as it might seem, is exactly the information we need to change our company culture.

By focusing on our people managers, and equipping them with the skills to better manage their relationships with their subordinates, we can minimise the loss of good employees because of bad management.

Giving feedback, for example, in a way that motivates rather than demotivates employees, is a skill in short supply among today’s line managers, but is something that can be easily taught and quickly put into practice.

3. Make Confidence a daily discussion

Confidence is discussed regularly in sports, because the sporting world knows that it is critical – that difference that makes a difference when athletes and sports people need to find that elusive next level of performance.

Confidence is multi-faceted and often misunderstood, but when discussed and worked on regularly, will make a huge difference not only to your employees’ performance but also their motivation. When employees are engaged, they will stay with your company, but you don’t just want them to stay, you want them to offer you their best performance possible. Confidence is the thing that moves them from commitment to action and gets them through turbulent times.

Creating a culture takes time, but results in a workplace where employees can give their best, making them feel good, and benefiting the company bottom line.

When you focus purely on Engagement, the tendency is to look to extrinsic and largely superficial motivations, such as gym memberships, extra holiday and shopping discounts, which only drive short-term results.

Investing in culture, however, addresses the more long-term and intrinsic drivers of human motivation – the need to grow as a person and make a difference – and sustainable Engagement, and employee retention, is the return that investment brings!


About the Author

StrategyDriven Corporate Cultures Article | 3 steps to creating a culture that retains your best employeesKaren J. Hewitt, author of Employee Confidence: The New Rules of Engagement, is an Engagement and Culture Change specialist who is fluent in five languages. Her book is a finalist in the Leadership category of the Business Book Awards 2019.

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