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Within the world of business and fast-moving companies, there is one mantra that rings true for all of them “culture eats strategy for breakfast”. Mark Fields, the former CEO of Ford, realized in 2006 already that culture is more important than strategy. His reasoning revolved around the customer and the fact that the modern organization should be agile and adaptive to the ever-changing needs and desires of its customer. This does not mean that Fields believed strategy to be unimportant, but it means that it does not matter how good your business strategy is, it will fail without a company culture that encourages and empowers your people to implement it (read more here). In other words, according to another great thinker; “Power to the People!” (John Lennon, 1971).

Freedom and Autonomy

Although it is strange to find CEOs and political peace activists to be of the same opinion, there is a truth in what they believe. But what does this mean in reality? According to me, that means that, over time, we have got more freedom and autonomy to make decisions, in our personal and professional lives – which is for the better. Globalization and the internet have opened a window of choice and opportunity. This has naturally only been enhanced by free market forces in our everyday personal lives, but also in our professional lives. The entrance of a new, generally higher educated, workforce in the market and the flattening out of traditional hierarchies within organizations over time, has propelled the advance of professional positions with more decision-making power. A company used to have one or a few bosses who called all the shots. Rigid hierarchical systems made for narrow and isolated decision-making processes, causing all kinds of problems from obvious biases, tunnel vision, and even blatant arrogance or naivety. More and more decisions are being made outside the board rooms and C-level suites.

Just think about the number of vacancies that have included some sort of requirement related to decision-making, e.g.: “excellent decision-making skills”, “ability to make sound and effective decisions”, “proven track record of effective decision-making”, and “excellent problem-solving skills”. All these requirements show some form of autonomy and decision-making power that is included in the position. More evidence can be found in the tech industry which is often a frontrunner for economic and societal trends nowadays. Within the software industry, we see a lot of these similar ideas and terms. Terms like “hive-mind decision-making” and “mob programming” indicate a similar trend and a better understanding of democratic decision-making.

Culture, Decision-making & Empowerment

So, you might wonder, how are culture and decision-making related? Simple. Empowerment is the bridge between culture and decision-making. Once you empower your employees to make their own decisions, they will need some sort of guide to lean back on. A guide that will help them to make decisions related to setting goals, making priorities, scheduling, time management etcetera. In other words, they need a sort of guiding set of principles that help them motivate and prioritize decisions. Do you feel where I am going with this? Exactly, they need a culture that helps them in their everyday work life. A good culture means that people can take more decentralized decisions. They are not reliant on leaders to show them how to act, prioritize or behave in relation to their work. This means that your organization becomes more agile and resilient as leaders can be busy or absent. Less dependency also means that it is easier for your organization to exchange actors if need be. Think about your company as a sports team. It is easy to exchange players from your team if the overarching system works and if the team spirit is good. Individual players know what to do (overarching structure) and how to do it (team spirit).

The strong case for a competent culture to create a resilient and adaptive organization does not exclude the fact that a good strategy is needed to achieve the goals of the business. That is also not the original point that Fields made. His point was that, if you must prioritize your time, your first priority should be your culture and your second priority should be your strategy. A company with a bad strategy but good culture might succeed because empowered individuals can overcome the lack of structure through their individual decisions. But a company with a good strategy and bad culture will almost definitely fail as the unempowered employees will or cannot implement the strategy in practice. That is the key difference. That is why culture eats strategy for breakfast if you want to create a sustainable business.  

Read more about how culture eats strategy for breakfast and how we can use culture as an organizational tool here.  

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In the last post, I discussed how culture eats strategy for breakfast, which is almost a well-accepted mantra in the business world. If I elaborate on that train of thought, then I believe we can almost certainly say that culture eats processes for lunch and dinner. Not only because processes are the consequence of a strategy, but also because we even look at the theoretic idea of a process versus the practical application of a process.

A strategy is an overarching plan for an organization on how to achieve its business goals. From the strategy, we derive tactical and operational plans and create processes to ensure that we achieve the goals of those plans as efficiently as possible.  

When we look at the general idea of a workplace, we see that the overarching framework for a lot of workplaces is very similar. People travel to an assigned geographical location, have a time that they start and finish, have colleagues they work together with, and collectively they work towards an objective. Apart from that, professions differ in a lot of different ways. A police officer has a distinctively different set of tasks and responsibilities than a receptionist or software developer. Still, they have a lot in common too. One major thing that most jobs have in common is that they must deal with a lot of ambiguity. Whether you ask a police officer, receptionist, or software developer what they do on a daily basis, a lot of the answers boil down to a variant of “every day brings new unforeseen challenges”. It is hard to describe daily activities as they can vary immensely. No day is the same. Still, each one of those people knows what is expected of them in various situations. They know how to behave, even when the situation is new to them.  

Structures & Processes

One way of dealing with this problem is to build processes that give people guidelines on how to act in different situations. These processes are good to show other organisations on how you intend to run your businesses. A prime example of this is ISO certifications. Huge amounts of documentation on how an organisation has set up its processes to be able to guarantee a certain level of standardization and quality. But even the detailed documentation of ISO certifications leaves room for interpretations and ambiguity and requires employees to be adaptive and creative. Do not get me wrong; ISO certification can be critical for organizations to improve both the quality and efficiency of their work. I merely argue that it is not the ultimate tool for guiding your employees in their everyday work. These are often sophisticated texts and process flows to guide individuals on how to deal with complex issues, hidden in manuals or quality support systems. Only a small proportion of people have read these manuals and to make matters worse the theory always slightly differs from reality. This means that we need to give our people more guidelines on how to act, even with ambiguity and ever-changing situations.

Culture to the rescue

This is where culture comes in. I have already extensively talked about how decision-making, culture, and empowerment are correlated here. But besides taking decisions, we also behave in a certain way as people. Our behaviours are shaped by motivations, that which drives us individually, and by what is acceptable in a group, that which drives us collectively. As I am not a psychologist, I will not speculate too much here on how individual motivations are shaped, but as an HR specialist, I can tell you that group behaviours form and are shaped by company culture. In other words, as a company we cannot determine the motivations of an individual person, however, we can influence the overarching culture of our organisation. The culture that we create will in turn influence group behaviours, which in turn will influence individual behaviours and decisions.  

By creating the right culture, we can create the right group behaviours which will provide guidelines for individuals on how to behave and make decisions. This is the set of guidelines that help people make consistent decisions despite ambiguity and ever-changing situations. A good example of this is the cultural value of Facebook “Move fast and break things”, which got adopted by a lot of small fast-growing companies. Why? Simple: these companies often lack the structure to properly guide their employees through their decision-making process. A company value like that shows your employees that they should not be afraid and wait too long with making decisions. They are rather encouraged to rely on their own strengths and “Move fast and break things” instead of “Going slow and steady”.  

Although I am not arguing that this is a good cultural value (Facebook had to roll back its original bold value), it is a clear guideline and message to people on how to act in unclear situations that demand adaptability and creativity. That is something that processes can never give your employees. Processes can only help you with the predictable, but culture can help you with the unpredictable – and remember it is the case for most jobs that “every day brings new unforeseen situations”.  

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AI is a broad term of all forms of demonstrated intelligence by machines. It encapsulates everything from simple customer-service queries to sophisticated deep learning networks. It has been around since the 1940’s and has become a real hype in the last ten to twenty years. The problem with AI is, is that it is something like the internet in the 1980’s: everybody is talking about it, little people actually know what they are talking about, and even less people are getting business value out of it. Today we find AI in: self-driving cars, chat-bots answering questions, email spam filters and more. In this blog I will try and make an attempt to belong to the second category and show you where AI stands right now in HR and where I believe it will go to.  

Firstly, let’s start off with a quick note for sceptics towards AI and their idea that robots will take over the world, as Hollywood shows us in movies like ‘I, Robot’, ‘Terminator’, and ‘The Matrix’. Experts themselves have no idea when we can achieve Artificial General Intelligence (AGI), as in the movie robots, and are guessing somewhere near the end of this century or even after that. Furthermore, they argue that it is simply impossible for us to create beings which think like us because of one simple reason: we know very little our own brain. In other words; we almost know nothing about our brains, let alone reproducing them. Now that’s out of the way, let’s see where we are today in HR.  

Where we are today

Today AI is being used within HR on a limited scale, let’s start of by looking at recruitment. There are already algorithms who help recruiters source the right candidates and there are also applications which can scan resumes and search for certain key words and sentences indicating that he or she has the right profile. Another feature of AI which is currently being used is in the first stages of contact with a candidate. You can think of automated messaging, scheduling interviews, providing ongoing feedback about the recruitment process and answering their questions in a chat function. The main idea behind these simple tasks is to reduce bias and save recruiters time which they can spend on more important tasks, such as: assessing cultural fit, holding technical interviews and finding qualified referrals.  

AI is also being used within HR as a chatbot for general HR-related inquiries (such as Una from Unilever). These bots function as first-line HR support for all your employees. Another interesting development is the use of VR (Virtual Reality) within HR. It is being used to simulate real-life scenarios and test, measure and improve behaviour. VR is and will be an integral part of training for real-life situations and how your employees will handle them. The idea behind these developments is to, yet again, relieve your HR employees from simple tasks, assignments, and recorded training sessions and let them focus on the harder tasks, such as talent development and culture building.

Finally, there are also early signs of applications which analyse the data and computer activity of employees to predict who is thinking about leaving the company and when. The idea behind it is that with big data analysis you can see which digital office behaviour indicates that somebody is thinking about quitting the company. This will allow your HR employees to take up contact with the individual to see if there is anything that can be done to change the individuals mind or if you need to think about a mutual agreement on ending the employment and start looking for a replacement. In this sense it is important because these early signs can let you be ahead of the curve so you can have a smooth transition from one employee leaving and a new one taking his or her place.  

Want to find more on where AI stands in HR today? Have a look at this article from the HR Exchange Network.  

Where we will go in the future

In the short term the abovementioned methods will become more sophisticated. So automated sourcing, resume scanning, messaging, chatbots, VR training and employee data analysis will be able to direct you towards more specific answers. We all know the frustration of a chatbot which just keeps you sending to the same general page on the topic from the FAQ, while the info you really need is somewhere else. Just as anything in real life, that on its own will take time. The AI will need time learning from the input that we give it.  

More interestingly, I believe that AI will also have a place in face-to-face contact with the first interviews. I think that companies like Future Robotics will also introduce their life-like customer service robots in the realm of HR. This can be via a digital setup or even in person. The robot will deal with the basic questions which get asked in a first interview. Algorithms will then analyse the answers given to see which candidate made the best first impression. Additionally, I also think that VR sessions can be used to test candidates on their capabilities into handling different situations. The upside here is that it takes out all personal bias from a recruiter’s perspective towards the candidate.  

Another thing that AI will bring HR is new jobs. Up until now I have only described AI as a possibility of downsizing activities and how it might replace jobs in the future. On the other hand, it opens up opportunities for HR to be a real tool to increase the productivity of your company. The future of HR will be more focussed towards behaviour, culture, ethics and values and how these can be pointed in the direction which makes sense for your business. Those areas of focus are, not unimportantly, also the main reasons of motivation on how you motivate somebody to JOIN and STAY in your company, so therefore it should be the main focus of your HR department.  

Want to find out more about present and upcoming trends of AI in HR? Have a look at this article from Forbes.  

In conclusion

For now, I am not ready to board the hype train about scientific robots who think and act like humans. I do think however that AI will clear up routine tasks for us which will leave us in HR time to deal with more important issues, such as creating the right culture, stimulating and describing right behaviour and increasing productivity. Do you not want to wait ten to twenty years until AI clears up your HR department’s time for these issues? Contact us and see how we can help you to develop the right culture, motivate right behaviour and increase productivity.

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When we think about culture, we think about HR departments who coordinate culture related projects and value determining group activities. However, culture adds more value than it is often credited for, also for the marketing department.

Let’s say you believe that there is some value in culture, but that it is not that important for your company. Let’s even say that you do not care about internal atmosphere or how productive your employees are. Let’s even go so far to say that you believe that, as long as everybody just does their job, there is no need to really worry about culture. Even then, even if you do not care about these internal factors, then there is another reason why you should worry about your culture: it directly affects your branding as a company, and could either be beneficial or detrimental.

Wait, what?

Yes, you’ve read it correctly. Culture, an internal challenge, will determined how you will be perceived externally. Let’s do a thought exercise. Think about a random company you’ve ever been in touch with. How did you perceive your interaction with that company? Positive? Negative? And what shaped that interaction? Was it the designed marketing message on their website? Their advertisements? Or was it the interaction with their customer service-, helpdesk-, or sales representative? More often than not, our opinions of companies are shaped with how we interacted with individual employees. How those respective individuals interacted with us is heavily dependent on how the internal culture and values are set up. For example, a company whose culture is shaped around serving customers will most likely have employees who are more pleasant to interact with, as consumer, as opposed to a company whose culture is shaped around following rules. This is, in a nutshell, why culture also matters for your branding.

But how does this work in practice? How can you set it up and what do you need to do to improve your branding?

The foundation

In core culture is a mixture of individual behaviours and values. These behaviours and values get translated into how people act and the sum of all these actions is what we call culture: how people behave and interact with each other. It seems therefore that culture is pretty much determined and that there is little that you can change. This is partly true; you cannot fully control culture and it sometimes grows organically. However, good behaviours and values can be stimulated and bad behaviours and values can be discouraged. So, you cannot steer culture as much, but you can nudge it in the right direction (Do you want to read more about the power of nudging? Read this article). This means that you can mould your culture towards the desired internal driver which aligns with your external message. For example, the marketing message: “we are service champions” should align with the internal value “being service minded”. Easy right? Wrong. Adjusting culture is hard. It is a time-consuming process and the people involved are often stubborn and hard to convince.

Turning the idea upside down, you can also see how internal culture will affect your marketing message. If you have toxic values within your culture, this will also translate in how your image will be conducted outwards. For example, if rules come first and customers always come second, then your customers will notice this when they interact with the people within your company. So, although culture and marketing seem worlds apart from each other, they are actually closely related and interconnected.

If you still believe that this is all ridiculous, then think back about the thought exercise. Think about how your perception was shaped, who was involved and what they did. You can deduct their actions back to motivations which are shaped by behaviours and values. That is culture.

Getting it right

What happens when your culture is actually aligned with your marketing message? Well when culture and marketing interlock and supplement each other, that is when you utilize culture to its fullest extent. The result is often noticeable in increased customer satisfaction. Depending on your culture, marketing and goals, it can either: drive sales and/or improve service and/or expand operations and much more. Culture can motivate your employees to go above and beyond and to reach goals which seem unachievable. As your employees feel part of something that is bigger than themselves and the message that your brand displays, they can create something bigger than just the sum of their efforts. Does this still sound a bit vague and fuzzy? Forbes has ranked 50 companies with a great culture (read more here). What do we see? In the top 4 there are 3 companies (Microsoft, Zoom & Google) which are extremely successful in their industry. This is, in large respect, thanks to their outstanding culture which motivates their employees in a positive way. Their stimulating culture increases collaboration, customer satisfaction, service, but most importantly: the growth of the company they are working for.  

In conclusion

So where do we stand? Well, firstly it is important to repeat the mantra: culture eats strategy for breakfast. The importance of culture cannot be overstated enough, not only for your internal atmosphere but also for your external brand. HR herein has to play a more central and steering role within a company and not just “that office where they do the administration and stuff”. CEO’s and directors have to be made aware of this as they need to give HR a more central role. You see that this already happened at companies with a thriving culture. Now how to set it up is more difficult to explain, mainly because it is entirely dependent on the situation and environment of your company.

If you want more information on how to unlock the power of culture for your company, then get in touch with us and see what we can do for you!

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Times are changing, not the products, not the machines, but our human capital is our unique selling point. So why then is the most important function in a company not occupied by a HR-professional?

In this blog I want to open a new discussion. The highest functions in companies are often occupied with professionals who often have their specialization in a certain occupation, these are often specialities in: sales, productivity, the product itself, and sometimes even finances.

However, it is very rare that we see an HR professional on the highest seat of a company (read: never). Why is that? I would argue that HR has the most important role in a company in the 21st century and therefore it only seems natural that somebody with HR-affinity holds the highest office.  

The highest office – a brief history

Historically the highest functions in previous societies were either ranked by ‘birth right’ or age. A prince was born to be a king and a farmer’s son was born to be a farmer. Additionally, the elder brother (because in those times we are not even talking about equality between genders) often held the highest regard in the family.

When we transformed from a feudal society to a capitalist society our order of who holds the highest function and why also changed. Birth right and age made place for private property and capital. In the beginning of our capitalist society, it was the people who were most skilled in their profession (artisans, craftsmen and guildsmen) who held the highest offices in their organizations.

With the industrial revolution in full force, these professionals had to make place for the people who knew most about machines and production. After the second world war these mass-producing professionals had to make place for productivity professionals. Average output and efficiency became the drive of many companies to outperform the competition.

Shortly thereafter the golden age of capitalism required professionals who knew how to handle flows of money. The highest occupation became related to financial specialization. Fast forwarding to current day, the highest office is often related to specialization in terms of sales, productivity, the product itself or finance. CEO positions are, more often than not, occupied by somebody who has a technical skill.

What is important?

Let’s do a recap, what have we had so far; we picked our leaders based upon: birth right, age, artisanry, skills related to production, productivity, finance, sales and the product itself. Are we missing something? Well, I believe we do.

Now in the 21st century human capital seems to be the most important asset for most companies. The people who walk in our hallways, sell and produce our products, facilitate finance, logistics and purchasing, it’s the people who are the beating heart of an organisation. They are our unique selling points. That has not gone unnoticed. More and more companies are busy trying to retain and develop their talent, and more and more companies are started to provide the means of doing so. Especially in niche industries, any industry remotely dealing with software and industries which require specific skills (I think this captures our entire economy), employers know how important it is to retain and develop their talent.

From this I can only conclude one thing, the most important focus of our companies now should be the people working in them. This means that we need leaders and CEO’s who not only understand HR, but who are also proficient in the HR world.

Shifting focus

Why would you go through the trouble of finding a CEO who has a focus on HR? Why do we require such emphasis? Well, because every time before us also required change and new ideas based upon what was important at that time. Now we entered the era wherein the most important part of our company is based on our people and their, often irreplaceable, talents. Society is focussed on letting each and everybody develop their talent to maximise our output. Schools, universities, training centres, they all know the importance of a development focussed approach. Therefore, it is time that companies adopt the same focus, which requires the same type of leaders.

It is therefore important that our future CEOs not just understand a recruitment process, but that they are able to build up an entire talent acquisition strategy. That they are not only able to see the value of teambuilding exercises, but that they understand how to shape and create cultural change. That they are not only concerned with training their employees to stay up to date with technologies, but that they can shape trajectory and development plans to provide opportunities for growth.

In short, it does not suffice anymore that our leaders know and do the basics. It is time that HR takes its rightful place in the centre of a company whose main unique selling point is its people. It is time that we accept that the centre stage of our time belongs to HR and development, but that also means that it is time for our HR professionals to step up to the plate. It is not enough to stand in line and to ‘offer service when asked’, HR departments need to transform themselves from administrators to proactive managers.

We need to find value which we can contribute to our employers. Find cultural problems and solve them, develop training and development strategies and empower our co-workers to be co-champions. It is only by doing so that HR will be lifted to strategic importance and that we get leaders who understand and are proficient in the realm of HR.

In conclusion

For me it is only clear that the next generation of new leaders has a background in HR. We are broadly agreeing that our human capital is in the widest sense the most important aspect of our company. We are recruiting, coaching, training and developing our employees, but to truly stand out for our employees, HR needs to be lifted to strategic importance. Therefore, I believe that we need leaders who understand this importance and have the capabilities to do so.

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