Organizational Strategy and its impact on culture, and employee engagement in Startups, Small, and Medium enterprises.

Not many Entrepreneurs/business leaders understand the interlinkages, interdependence, and implications their strategy/business model would have on Organizational Culture, employee engagement, and governance policies and systems.

Every Start-up and young entrepreneur starts his journey aspiring to be a Unicorn.

However, all business models/ideas of these enterprises could possibly be bucketed/categorized into the following four:

1.??????Strategy built on a unique Intellectual Property (IP): Focus on heavily guarding, securing, and protecting it, and try to market this to potential customers by charging a premium for the superior IP or waiting for someone with deep pockets to buy them out.?They would like to maintain utmost secrecy and systems and processes to protect their unique IP (This could be a process, product, or service.) Most internal systems and processes are designed to ensure the unique IP is not accessible to any employee or outsider. ?Potential Implications of this approach on:

a.??????Organizational Culture: In such organizations, organizational culture usually tends to value secrecy and a small coterie of founders having access to key IP aspects.

Employees are provided information on a need-to-know basis only, anyone seeking or showing inquisitiveness beyond a point is looked upon with mistrust and suspicion. Culture is likely to be very formal and strictly monitored. IT security systems are constantly updated and protected to ensure IP is protected at all costs.

b.??????Employee Engagement: Everyone agrees that successful strategy execution can happen only with highly Engaged employees. Engagement also depends on Collaboration,

Sharing, and involvement of employees in Strategy formulation, which could be restricted in such heavily guarded IP environments. Unless there is continuous Management communication and opportunities for learning and growth, employee engagement could be a challenge.

?2.?Strategy built around a unique innovative solution: Building Intellectual property around the innovative solution/product yet collaborating with existing vendors to adapt to its innovative solution. These are promoted as a value-added service to their existing offerings by charging a premium.

Potential Implications of this approach on:

a.Organizational Culture: Confidentiality, the secrecy of their IP is highly valued yet the organization also accepts collaboration with competitors as a key to their success. Accordingly, even the internal systems, processes, and governance mechanisms focus on tight control on protecting IP and encouraging collaboration. Employees are trained to handle the competitor’s requirements.

b.?Employee Engagement: As collaboration and sharing becomes pervasive, employee learning, growth & engagement get better attention. Potential opportunities for having enhanced Employee Engagement levels and Strategy Execution go up. Diversity and involvement of more employees enable the organization to anticipate challenges and overcome them more easily.

?3.?Strategy built around a Value-added service or product for existing vendors and suppliers: There is no direct competition but further enhances the utility, product attractiveness, and value-added to an existing product or service. The lack of this service or product does not take away the core purpose/intent of the product or service.

The potential implication of this approach on:

a.?Organizational Culture:?A open and constantly innovating culture and urge to find better solutions and products to add to the existing array of products and services are encouraged. Growth and survival depend on evolving on innovations and solutions. Employees are encouraged and rewarded to collaborate, innovate, learn and grow.

b.?Employee Engagement: With greater diversity & involvement during the Strategy planning phase, Employees are more likely to experience intellectually stimulating involvement leading to a better commitment to strategy execution. These open up vistas for opportunities and ideas. ??

?4.??Strategy built around Value disruption: Innovative product or service that makes the existing products or services completely redundant. The speed at which the product or service can replace the existing competitors is key. There is customer pull generated to the new value disruptor product or service thru marketing new innovative products or services. Speed of gaining market share before new competitors emerge on the scene is critical to the success of the strategy.

a.??????Organizational culture: Speed of execution is likely to be critical in such an organization once an innovative value disruptor service or product is in place. More than attention to detail, speed of implementation, and execution, the acquisition of new customers are in focus. The capture of the market share quickly is essential as the entry barrier for new competition could be low. Employees are recognized and rewarded accordingly.

b.??????Employee Engagement:?As the rapid expansion of a new value disruptor product or service is in focus, employees are likely to be engaged, motivated, flexible and agile. Learning, Management communication, and involvement could be of high order leading to better Engagement levels.?

Leadership and immediate Managers’ behavior have a significant impact on Engagement levels. D&I initiatives, Communication, challenging work opportunities, Development of Innovation culture, Fairness& objectivity all contribute to enhanced Employee Engagement.

One other observation in this regard has been the impact of those founder’s/entrepreneurs a) value systems, b) trust in their immediate leadership, c) their sense of security/insecurity, and d) their ability to confront their immediate circle of friends, family members involved in the business, and leadership members. These factors also impact the approach to Organizational Strategy, Organizational Culture, and Employee Engagement. Facilitation by an external consultant could help address such issues.

I would be happy to hear your experiences and thoughts on how you have experienced Organizational strategy impacting the organizational culture and Employee Engagement levels.