Culture: The Missing Item on Your Growth Checklist

Culture: The Missing Item on Your Growth Culture: The Missing Item on Your Growth

ChecklistChecklist

Part 1: Understanding the Challenging Implications of Culture onPart 1: Understanding the Challenging Implications of Culture onOrganisational GrowthOrganisational Growth

Nicole Hall, Consultant, and Andrew Minor Consultant

© 2012 Frost & Sullivan. All rights reserved. This document contains highly confidential information and is the sole property ofFrost & Sullivan. No part of it may be circulated, quoted, copied or otherwise reproduced without the written approval of Frost & Sullivan.

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Today’s Presenters

• Nicole is a Industrial Psychologist with experience in organisational development, with expertise in organisational design, workforce planning and change management.

• Andrew has extensive expertise in facilitating projects in cross functional group situations and managing people dynamics and implementing senior level strategy at the operational level.

Nicole Hall,

Consultant,

Frost & Sullivan

Andrew Minor,

Consultant,

Frost & Sullivan

Nicole Hall: http://za.linkedin.com/pub/nicole-hall/37/b/53/Andrew Minor :http://za.linkedin.com/pub/andrew-minor/4/286/11a/

@frostsullivanSA

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Focus Points / Agenda

Culture for growth:

1. Introduce Growth

2. Define Culture

3. Examples of successful and unsuccessful growth

4. The Results Pyramid

5. Conclusion

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Occasion for the Analyst Briefing

• Growth is the aim of any business. In today's economic climate achieving sustainable growth is harder and harder to achieve. Over 70% of all change initiatives fail. So just what is it thatallows certain companies to continue growing in this climate?

• This briefing will discuss the importance of the awareness of anorganisation’s culture and indicate how companies can review themselves in light of the questions and examples discussed to help their growth initiatives and future plans.

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Ten Growth Processes for Organisational Survival

Competitive Strategy

Product Launch

Technology Strategies (Licensing, Applications)

Geographic Expansion

Merger and Acquisition

Distribution Channel Analysis

Vertical Market Expansion

Product Development

Strategic Partnering/ Growth Sourcing

Frost & Sullivan focused Growth Processes:

Customer and Branding Strategy

In today’s highly dynamic and competitive business environment, it is imperative that

organisations focus on growth. In an effort to avoid becoming stagnant, organisations

should pay special attention to change, ensuring continuous evolution.

In today’s highly dynamic and competitive business environment, it is imperative that

organisations focus on growth. In an effort to avoid becoming stagnant, organisations

should pay special attention to change, ensuring continuous evolution.

“Without continual growth and progress, such words as improvement, achievement, and success have no meaning.”Benjamin Franklin

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Defining Culture

“Patterns of values, norms, beliefs, attitudes and

behaviours that are shared amongst individuals.”

“Patterns of values, norms, beliefs, attitudes and

behaviours that are shared amongst individuals.”

“Culture is in the mind of the experiencer”“Culture is in the mind of the experiencer”

“The way we do things around here”“The way we do things around here”

“Organisational culture includes an organisation’s

expectations, experiences, philosophy, and values

that hold it together, and is expressed in its self-

image, inner workings, interactions with the outside

world, and future expectations.”

“Organisational culture includes an organisation’s

expectations, experiences, philosophy, and values

that hold it together, and is expressed in its self-

image, inner workings, interactions with the outside

world, and future expectations.”

CULTURECULTURE

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Core to organisational design

Must be aligned with organisational design

Culture and behaviours aligned to organisational core values and

consistent throughout the organisation.

Processes

Culture

Talent

Talent management and leadership development strategies to support the

business vision and strategy.

Performance measurement to drive behaviours that are aligned to the

business vision and strategy.

Infrastructure (systems and property) supports the requirements of the future. design.

Well defined high-level operational processes and strong linkages and communications between functions.

Performance

Effective mechanisms for making decisions and reducing bureaucracy.

Governance

Infrastructure

Sustainability

Strategy & operating model

blueprint

Structure Roles

CapabilityResources

Streamlined & responsive structure

with appropriate spans of control and

management layers.

Capability requirements matched to the right roles and appropriate L&D.

Clear roles, responsibilities, accountabilities & indicative performance metrics.

FTE and headcount requirements defined

to deliver superior performance.

Making Culture Real

“Creating a growth culture is about ensuring an integrated ecosystem within a company, that carefully manages the interplay of the various components.”

Mark Simoncelli, Global Growth Implementation Solutions Director, Frost & Sullivan

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Examples of Successful and Unsuccessful Growth

McDonalds - successful geographic expansion

McDonalds : Successful Geographic ExpansionMcDonalds : Successful Geographic Expansion

IMAGE: Number of McDonalds by country at the end of 2012, from an interactive infographic showing expansion from 2007,

built by The Guardian.

McDonalds:

•Operates in 119 countries with 1.8 million employees

•21% increase � in Total Revenues from 2007 to

2012

•Geographic expansion, menu evolution and increased

restaurant experience

•McDonalds Hamburger University

•Plan To Win: focus on quality, service, cleanliness

and value

Source: www.mcdonalds.com

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Bombardier: Successful Cultural AdaptationBombardier: Successful Cultural Adaptation

Bombardier Aerospace:

•A division of Bombardier Inc

•Is the worlds 3rd largest manufacturer of aircraft

•Employs over 33 600 people

“..if you want to make a change, you need the right

people on board.”

“while we focused on the soft stuff, we didn’t let

go of the hard stuff.”

Pierre Beaudoin CEO and President of Bombardier ,article 2011.

IMAGE: Business aircraft distribution by world region Business Aviation Special 2012

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SouthWest Airlines: Successful Competitive Strategy SouthWest Airlines: Successful Competitive Strategy

Southwest Airlines:

•World’s largest low cost carrier

•Operates more than 3, 400 flights per day with more than 46, 000

employees

•Maintains profitability and low-fare, low-cost business model

•In 2005, for the 10th year in a row, Fortune Magazine listed SouthWest

Airlines as number 3 among America’s Top Ten most admired corporations

Life at SouthwestHappy Employees = Happy Customers. Happy Customers keep

Southwest flying. Our one of a kind Culture includes FUN

events like Halloween, deck, and spirit parties that keep our

Employees motivated and make it worthwhile to work hard for

the Company they love!

Source: Frost & Sullivan www.southwest.com

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Kodak: Unsuccessful Product Development, Innovation Kodak: Unsuccessful Product Development, Innovation

IMAGE: The decline of film roll and analog cameras was evident in 2000, with a constant growth of digital cameras.

Kodak:

•130 year old American icon filed for Chapter

11 bankruptcy

•In 1975, Steve Sasson invented the digital

camera

•Mass-market potential ignored, with fears of

cannibalising core film sales

•Digital photography overtook film

•Failure to reinvent itself in the digital age

Source: Frost & Sullivan The Strategy Tank

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Examples of Successful and UnsuccessfulGrowth

https://www.youtube.com/watch?v=gPvCuc1_mgM

Chrysler - Benz: Unsuccessful M&AChrysler - Benz: Unsuccessful M&A

Chrysler - Benz M&A:

•Formed in 1998 at estimated $37

billion

•Sold in 2007 to Cerberus Capital

Management for $7 Billion

IMAGE: Figure 7. Percentage of global M&A volumes per region, M&A Tracker Q3 2012 E&Y

Challenges to successful partnerships

•Corporate values

•Corporate hierarchies

•National cultures

•Compensation structuresSource: Apex Institute 2013

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The Role of Culture in Achieving Growth Objectives

1 2

Growth = R¹�� R²

C¹≠ R²

C¹�� C²

C² = R²

Growth = R¹�� R²

C¹≠ R²

C¹�� C²

C² = R²

Current Culture (C¹) Needed Culture (C²)

* Adapted from Connors & Smith, 2011

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Key Take-Aways

• Culture is often overlooked at the expense of the growth initiative

• Awareness of the cultural aspect in any organisation allows for a solid foundation for growth initiatives

• Culture is a combination of experience, beliefs, values, principles, and actions which drive results

• There are many examples, as highlighted in this presentation, that illustrate the important role that culture plays in the success or failure of various growth initiatives.

• Part 2 to offer a tool to analyse and quantify the culture in anorganisation in order to determine whether the organisation is ready to grow

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Next Steps

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join our GIL Global Community

Join our GIL Community NewsletterKeep abreast of innovative growth opportunities

Phone: 1-877-GOFROST (463-7678) Email: [email protected]

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For Additional Information

Andrew Minor

Consultant

Africa

(0)21 680 3561

[email protected]

Nicole Hall

Consultant

Africa

(0)21 680 3278

[email protected]

Samantha James

Corporate Communications

Africa

(021) 680-3574

[email protected]