Considering Culture in Your Strategic Road Map

A strategy is a roadmap that guides organizations to higher levels of performance that encourages productive growth. Executives can develop excellent business strategies that take into consideration market projection, resource allocation, human capital, and financial streams. To their own detriment, many CEOs do not factor in organizational culture into their strategies and how it impacts organizational goal attainment.

Culture should support business strategy (Eaton & Kilby, 2015). The values and semantics contained within culture should enhance business strategy through proper orientation of people's expectations. If there are contrary elements within a culture, the values should be adjusted to ensure they realign to meet organizational needs.

Consider an example of how culture can support or detract from organizational objectives. Two companies seek to become market leaders, but one company promotes employees based on patronage and the other from performance. These values become embedded into the culture of the organization and create a way of thinking that impacts daily operations.

Over time, poor values will cost the company their productivity and put them into market irrelevance and bankruptcy. Companies thrive off of their intellectual capital and when this is traded for patronage and personal gain the innovative and productive spirit dissipates.

Building a strong culture supports the achievement of organizational objectives by creating a way of thinking. An organization based in service quality should consider a culture that has focused values. Likewise, a company that relies on lean manufacturing promote efficiency.

Culture is a collective pattern of thinking that leads to action. As a whole organization, the actions of individual workers will determine whether or not a company will be successful. Developing the right culture will create social pressure to recruit, promote and perform at certain standards that helps the organization become stronger. A comprehensive strategy must include the soft cultural skills that support goal attainment.

Eaton, D & Kilby G. (2015). Does your organizational culture support your business strategy? Journal of Quality & Participation, 37 (1).

How ISIS Will Damage Middle East Economies

Trade is the lifeblood of any nation, and when it is disrupted, there are consequences to the economy. In places where ISIS has taken root, traditional trading activities have been replaced. The risk of economic maladjustment in the Middle East grows by the day. ISIS not only destroys economic freedom in the lands they hold but also hampers the activities of the entire region.

War disrupts economies and ISIS is hardly the first to do so successfully. However, when wars are over many of the previous commercial lines will resume, and with effort, a nation will slowly return to its former self. In a few cases, nations like Iraq can even improve their economy by building updated infrastructure that catalyzes business growth.

ISIS isn’t a typical country engaged in cross-border fighting like we have experienced in the past. It is a a new nation spawned from the villages of other nations that seeks to globalize their brand to create new systems to ensure their empire continues to expand. ISIS ideology comes with new (old) ideas about commerce, economic exchange, and currency based in Eastern traditions and supported by millions of people.

If Afghanistan and Libya are examples, the future of the area doesn’t look bright unless things change. According to the World Bank, the % of GNP growth in Afghanistan and Libya are projecting downward trends until 2017 when problems are expected to stabilize. The difference is that ISIS, with their restrictive ideology, will hold those numbers down much longer.

The economic problems of Syria and Iraq also impact their regional trading partners. Turkey and surrounding countries have experienced slower growth over the past few years. These nations have an economic stake in ensuring ISIS doesn’t remain and should consider putting more effort into collaboration and counter-initiatives.

ISIS is one more challenge the world must overcome as many challenges before. Friedrich Nietzsche eloquently stated, “That which does not kill us makes us stronger.” It is possible that Iraq’s and Syria’s economy could emerge out of this crisis stronger if they resolve their sectarian differences. Overcoming this challenge will require Shia and Sunnis to work together to reconcile their disputes by creating a new national identity that shuns division. Abundance can return again to the Cradle of Civilization between two rivers.

Organizational Justice Builds Better Companies

Organizations are collectives of people that create mini-societies with rules, beliefs, and symbols. As a society, there are inherent values that each person expects from their employer that helps build greater forms of trust and commitment. When those values are inconsistently applied and result in distributive and procedural injustice the financial failure of the company is not far into the future.

Distributive Justice determines who receives rewards in an organization while procedural justice describes the treatment of employees based upon the policies & procedures of the organization (Fields, Pang & Chiu, 2000). Employees expect that companies are willing to reward them fairly based on effort as well as have their rights protected by the organization.

When distributive and procedural justice breaks down it is usually the result of the inappropriate application of rewards and punishments. Agenda driven individuals will change the “unwritten” rules to ensure that the goals of making them look good and earn promotions are achieved. Poor management detracts from organizational objectives by wasting time and effort.

Employees will soon learn that the rules are not fairly applied and will either align themselves with the needs and opinion of the manager or leave the organization. People who need jobs to support their families are likely to accept poor management within an organization to maintain their livelihoods. As this encampment continues the value systems and culture of the organization adjust to a lower form.

What is the value of distributive and procedural justice? Job satisfaction and organizational commitment are related to perceptions of justice (Harvey & Haines, 2005). When people feel respected and treated fairly, they will have more commitment than employees who have been mistreated. The retention of progressive and knowledge-driven employees should be the goal of every organization.

Justice can be an elusive because it is subject to all types of interpretations. Those organizations that can create fairness in compensation and punishment are likely to reap the benefits of employee effort. Managers who place their interests first and the needs of the organization and its employee’s second do irreparable harm to employee trust and commitment. Each manager should focus their efforts on the organizational goals and aligning their styles appropriately.  Managing employees is about motivating them to see the value in themselves and the work they do.

Harvey, S. & Hains, V. (2005). Employer treatment of employees during a community crisis: the role of procedural and distributive justice. Journal of Business & Psychology, 29 (1).

Fields, D., Pang, M. & Chiu, C. (2000). Distributive and procedural justice as predictors of employee outcomes in Hong Kong. Journal of Organizational Behavior, 21 (5).  

Developing Innovative Capital Through the Subconscious

Creativity leads to innovation that improves organizational functioning by solving problems. As more problems are resolved, the organization continues growing to become competitive on the market. Even though the subconscious influences creativity and problem solving, it is has been ignored as pseudo-science despite impacting almost everything in our lives; including solving business problems.

Creativity relies on our ability to resolve problems that lead to the survival of both ourselves and society. Creative people like Einstein are honored because they have the capacity to develop new solutions to long unsolved problems. Without the use of the subconscious, creativity would have never been turned into a useful form.

Problem-solving requires preparation, incubation, illumination, and verification (Grupas, 1990). A creative person studies a problem and develops a knowledge base, allows possible solutions to incubate in the subconscious, percolates a solution into a conscious form that is verified through research.

The reason the subconscious is so powerful is that it is a self-organizing system that continually makes associations/connections between information (Andreasen, 2011). As the brain builds framework for handling environmental knowledge, it also connects, categories and comes to conclusions of perplexing problems.

The speed and ability of the mind to do this is based on the intelligence level of the individual. Intelligent people are better able to process greater amounts of information and find associations faster. When put to substantial use that innovative creativity has tangible value for business that want to invent new ways of doing things.

People with creative minds don’t often think like everyone else. They use a divergent system of reasoning that creates many different solutions that are eventually pruned back to the most useful ones. This is in contrast to the general population that has been socialized through schooling to use convergent thinking that relies on step-by-step processing models already planned out by someone else.

Divergent thinking can cause difficulties interacting with people. Many intelligent people lose jobs and opportunities only because of the restrictive social circles inherent in most businesses. They may say things that are true but also run against conventional wisdom that doesn’t sit well with ego driven individuals.

Open environments that respect the diversities of people, and the way in which people process information, are more likely to develop innovative environments. Restrictive, position-oriented, highly controlled conditions will restrict innovation. By developing the right open-minded environment, a company can foster the bringing forward of subconscious ideas to develop higher forms of intellectual capital.

Opening Communication Lines for Better Decision Making

Charles Dickens said in the Tail of Two Cities, “A wonderful fact to reflect upon, that every human creature is constituted to be that profound secret and mystery to every other.” Communication is a process sharing information from one person to the next that lowers this mystery. Problems arise in organizations when communication is not accurate or reflective of actual events. Ensuring lines of communication are open is essential for creating more functional companies through better decision making.

Poor communication wastes intangible assets and creates inefficiencies among resources (Mazzei & Ravazzani, 2015; Hola & Pikhart, 2014). Intangible assets form the nucleus of the company and include relationships, intellectual capital, and decision making. What makes one company different from the next are the internal soft mechanics often ignored because they are not easy to define.

Misinformation can be intentional or unintentional. For example most of us have been subject to rumor or conjecture at one point in our careers. Despite lacking substance, false information can create havoc in our lives and damage work relationships. A corporate culture of rumor mongering is a sure way to destroy productivity in a company quickly.

An inability to solicit and respect multiple perspectives is a sign of short-sighted strategic development. It is easy to make decisions when you have no competing information; try sticking your fingers in your ears next time you don't want to hear something. The problem is that those decisions are based on skewed information and alternatives have not afforded proper weight. Managers expand their channels to ensure they are receiving all of the information needed to make appropriate decisions.

Information is the lifeblood of solid decision making and those who keep their communication lines open are better able to capitalize on that information. Organizations that seek to create productive communication among organizational members find that decisions are well rounded and more holistic in their approach. Short-sighted and self-seeking decisions are a sure way to limit the growth potential of any organization. Open information lines keeps your sonar active and your mind sharp.

Putting the Power Back in Pensions

Pensions are a primary source of retirement savings throughout the nation. Poor management decisions, recessions, and cronyism have depleted these funds to a point where they now become a significant risk, not only to those who rely on them, but to the local economy as well. Chicago recently became aware of the devastation of their policies when faced with a pension budget shortfall of $6 billion that neither they or the State of Illinois can afford. Difficult choices will need to be made that will likely upend entire networks of people and companies that need and profited off these pensions.

The problem with pensions is that when they go South there are few win-win situations, and reform comes with a significant cost; especially to those of older age. The cost either falls on the states, on employees, or on the national economy. As the risk of multiple pension implosion rises at a time when national debt is high, the Great Recession is coming to a close, and international strife is present it becomes necessary to tackle this problem succinctly.

It is difficult to truly wrap one's arms around this problem unless a thorough investigation is conducted to understand not only the underlining mechanics that led to the decisions which created the cash shortfall.  Only through understanding, official integrity, and strategic implementation can new approaches to retirement planning be implemented for the benefit of its most important beneficiaries.

Honest conversations are difficult because they run into the very fabric of how we view our economic and political system. There is a high level of potential fallout from questionable decision-making that is likely to be embarrassing and minimized by internal social networks. Companies could potentially close their doors and thousands of people may march on the street in complaint of the swooshing away of their concerns.

Accountability can be difficult when an entire region has a stake in how the system operates. Whether one is a judge or a janitor the money from these funds fuels the economic and political engines of the area making it challenging to find buy-in for reform; the problem turns into a crisis before action is taken. Political parties are so heavily invested in the outcome and their interpretation of events that few can rise above the rhetoric to make decisions in the best interest of all stakeholders.

Busted pension systems does allow academics an opportunity to research how and why these pension funds go bankrupt  to ensure that sound management principles are developed for future decision-making. With the support of the Justice Department, and those who support the greater good, poor decisions can be analyzed, and new "red flags" created. Academics can use this information to develop stronger models and test those models to help teach students how to handle responsibilities throughout their careers.

A thorough investigation requires the analysis of tens of thousands of documents, interviews, and comparing successful pensions with the pensions in question. Chasing specific rabbit holes to understand individual transactions is beneficial but so is taking a meta-data approach that allows research the ability to see where all these rabbit holes were dug can reveal important information. It is a mammoth undertaking but when you consider the billions of dollars lost, and the growing concern of pension problems in other areas, it is a small drop in the bucket.  

Putting the power back in pension funds means freeing them from the many interested parties that seek personal gain and ensuring a proper team of diversified and qualified professionals are in place to create checks-and-balances on official's decisions. That diversified team should be made of people that represent different political, ethnic/racial, and industry backgrounds. Their ability to see the problem from multiple vantage points makes all the difference in the success of new strategic choices.

Pension reform is a painful process of changing minds about responsibility and how to handle that responsibility. It doesn't matter if a person is a recipient of pension monies,  works for the pension system, is a political candidate, a business that receives investments, or a taxpayer that has to bail out the system because all have a vested interested in protecting our futures. Reform is in the best interest of everyone!

Pension change relies on leadership that takes the high road even when no one else is listening and there is little support for change. It is about making decisions that others are afraid to make and working toward something more idea. A leader's greatest asset is to stand back from the rhetoric, assess the situation, and create a group of collaborators that are connected by the same end goals. Putting power into pensions is about solving problems before they become unmanageable and finding new ways paths for the future.