How do we win in an uncertain world?

How is it like to work in this company? It is a question everyone asks before he or she considers a new job opportunity. Why is it that most of our questions are around “feel” of the organization? What is changing our context and our view of the world? Why perks, salary and benefits are no longer the most important factor in making career choices?

Digital disruption of business models

While culture has always been the fabric that held organizations together, it has now come to the fore against the backdrop of disruption businesses are facing. Earlier, large companies had distinct advantages that helped them dominate the business world-- access to capital, strong distribution network and reputation - all of which helped them win consumer confidence and loyalty. They also created significant entry barriers for new companies.

With the evolution of technology and convergence of digital and industrial world, talented entrepreneurs with bright ideas have easier access to capital. E-commerce has created newer channels to reach consumers and consumers are willing to experiment and engage with smaller companies.

A start-up with an innovative idea today, could disrupt an entire industry in a matter of few years. The entry barriers have reduced and the era of large conglomerates dominating an industry for decades is now history.

VUCA is the new normal

The world has also become hyper-sensitive to information. A Twitter post can lead to a crash in a stock price impacting millions of investors. It can even cost a CEO his or her job. Sometimes, it feels that we are living in virtual reality. Information is easily available, but it is also managed well to paint a picture, which may or may not be real.

We also live in a world of dichotomy. While the world is moving forward in many ways -- in technology, belief in diversity and commitment to environment -- we are also regressing in many other ways. Protectionism, populist movements and trade barriers are making a comeback. Nobody knows where this world will be twenty years from now, but, no one can disagree that it will be more complex, more ambiguous and more uncertain. VUCA (volatile, uncertain, complex and ambiguous) is no more novel...it is a new normal. The only way one can deal with this new normal is to continue to be agile, adapt, change and disrupt with the changing times. It is the software –CULTURE -- which will differentiate organizations of the future, not the hardware.

Behaviour, the new benchmark

What kind of culture will drive success in organisations of the future? How does one build it? Culture takes years to build. While, at one end, it is very complex, at the other end, it is very easy. It is all about the way organizations are run – behaviours, operating systems, processes and leadership.

 Employees today are very knowledgeable and capable of doing things on their own. The tone and context in an organization is set by the behaviours we role model and encourage. Everything else, follows. If the employees feel empowered to solve problems, they are encouraged to experiment and learn from failures, there is respect for diverse opinions, they are encouraged to work in teams and there are no hierarchies in contributions, organizations will thrive.

At Diageo, we believe in developing, promoting and evaluating talent on not just their performance but on our “leadership standards” and “values.” This brings in a holistic view of the talent, much broader than performance on deliverables and enables the organisation to build the desired culture.

Millennials are more driven by fulfillment and learning, than titles and salary. Employees have realized that if they go for the former, the latter will follow. Organisations today have a clear opportunity to reflect and articulate their purpose. It helps build an immediate emotional connect with employees, customers and the communities. Progressive organisations take a step forward in the process to help individuals discover their own purpose to create an opportunity for them to realize it. Building an emotional connect with the employee is the first building block of the culture.

 Changing role of the manager

Webster's dictionary uses words like “directs a team” and “conducts business” to define a manager. Manager used to be an all-in control, dynamic and charismatic person who ruled the roost. Manager’s position was secured by respect for hierarchy. The opportunity for leaders of today, is not in getting tasks done, but in their ability to nurture entrepreneurs inside the organization.

Experience could be a liability in some situations. We need to be willing to unlearn to learn new things. At Diageo, we are experimenting with a “reverse mentoring” program for our senior leaders. Millennials are the mentors and the mentees are the seniors. The tables have turned. We have found that some of the conversations between the mentors and mentees are not just enriching, but eye opening. It is a big opportunity for leaders to introspect and become vulnerable in front of their teams. Research shows that vulnerability will be the single most differentiating trait of a successful leader in the future.

Innovation is the life-blood of successful organisations. It cannot be nurtured by running a once-a-year idea generation campaign or installing suggestion boxes for employees to slip in their ideas or by organizing brainstorming sessions wherein leaders exhort employees to think 'out of the box' solutions for festering problems and the leadership team constitute the jury to review suggestions and give away prizes.

These are relics of the past. Organizations today need to build an environment that enables innovation, it should be the way we work, engage and connect internally with employees and externally with our customers and stakeholders.

Culture is the new competitive advantage

‘Say-do ratio’ must be one of the most over-used management jargons. While it is critical for one to meet and deliver on commitments, but too much focus on ‘say do’ amounts to asking employees not to aspire, not to dream and not to take risks. It is completely counter to the world we are living in. Research has shown that performance management is the most hated process in all organisations. Should the measurement criteria also include efforts to explore possibilities that enable and enhance performance? Is it not strange that more than 75% of our meetings are operating reviews? Shouldn’t we be having meetings for “creating possibilities”? Changing the context can often change the way we operate and behave.

It is important to understand that culture is not a model. It is not a formula. It is not an initiative. Culture is a conversation. Culture is the way we engage and behave. It seems amorphous, but it is real in its impact. As organizations continue to evolve, this will be the only source of competitive advantage in the future.