Hack:
Organization culture as an important part of Blue Ocean Strategy

June 18, 2010 at 5:18pm

Summary

As the products, services and prices within a vertical become increasingly the same, one differentiating factor that will be difficult for a competitor to copy is the internal working culture of an organization. This can be an important tool for companies trying to use a Blue Ocean Strategy to stay ahead in the market and align the organization with differentiation. It does not need a huge increase in op-ex or cap-ex to have a distinctive organizational culture that is clearly identifiable by its employees. In fact it can save costs because the rate of pay hikes and other financial benefits will not be the only incentives to keep good employees motivated or from leaving the organization. This is an effective strategy for organizations confronted with many complex issues during their attempts to generate organizational achievement in VUCA (volatile, uncertain, complex, and ambiguous) environments.

PS: This may not really be an original Hack but I believe that in todays VUCA enviroment , Organizational Culture(OC) can be a very important tool particularly as the workforce becomes more and more global. Just wanted to use this platform to highlight this important parameter which is not really governed by forces out side the control of an organization but can be created ,nurtured and implemented within the organization if proper focus is given to it.

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June 18, 2010 at 6:31am

Matt Shlosberg

Bhaskar,

Good observation. I actually wrote an article on this exact topic a little while ago. Take a look at http://content.hcglobal.com/2010/03/31/culture_as_a_competitive_advantage/

Matt

June 18, 2010 at 8:50am

Bhaskar (Bryan) Deb

Matt,

Thanks for taking the time .Your article is good and very detailed . We both agree that ,"OC" can be used as a sustainable competitive tool that cannot be copied easily from one organization to another but at this time this is not getting the focus, or the awareness that it deserves is not there . May be companies think that a buyer will not buy its only because it is has good culture and this may be partially true but I believe that the quality of the product , the time needed to bring it to the market , innovation, passion and other attributes that companies crave to inculcate in employees can be enhanced a lot with a good OC.

Also, as the service sector becomes more and more important in increasing the margin for a company, the BPOs and the KPOs become an industry in themselves , I am sure with passing time , companies will realize that the OC may be the most important differentiating factor and in some cases the only differentiating factor.

Bhaskar

June 23, 2010 at 2:15am

David Sims

Bhaskar,

Matt's article offers examples of companies that relied on a unique organizational culture to create a competitive advantage. But your original post makes a stronger connection to Blue Ocean strategy -- which I understand to mean innovating into new markets rather than (or, in addition to) dominating existing ones. Intuitively, this makes sense. Indeed, seems even more important to have a unique and driven organizational culture to forge a new market than to edge ahead in an existing one, since the team must be focused not only on efficiency and performance, but also creativity. Did you have some examples in mind that show where a Blue Ocean move benefitted from a strong culture?

- Dave

August 22, 2010 at 4:50am

Dr. Willy A. Sussland

Dear Mr. Bhaskar, many thanks for bringing up Kim & Mauborgnes meisterstuck. McKinsey had published a surveys that showed that was a main problem executives have when implementing management innovation.

I believe that should be looked in the comprehensive context of what I call
so as to bring out the interdependencies of the strategy fundamentals, the style of the leadership, the systems of the management, the structures of the organization, the shared knowledge. My 5 were obviously inspired by McKinsey's 7 and by Chandler's linking up strategy and structures. Yet, my 5 ~~put in the proper context. Moreover, I do not speak of culture, but rather on the interplay of corporate, industry, and regional cultures.~~

I put in the context of management innovation in my latest book "Innovate out of Crisis - Second (and revised) Edition" published by CS 04/2010. In order to drive management innovation, I use 5 business principles and 3 best practices in order to innovate the 3 drivers of business value (the strategic resources, the management processes, and the 5 stakholders). All these elements are integrated in my "Platform of Management Innovation".

The book is available on amazon.com and if you care to pick it up, I will be happy to respond to the comments and questions you will send me at wasussland@bluewin.ch.

Kind regards, Willy Sussland, Ph.D.

In my latest book published 04/2010, I present a Platform of Management Innovation, which integrates a string of mind-maps that bring out the principles, the value-drivers, and the best-practices of management innovation.

August 22, 2010 at 7:46am

Bhaskar (Bryan) Deb

Willy ...thanks for your kind words . I will surely get this book and then we can touch base .

Dave ...I apologize for not responding to you. Life has been too hectic and I am busy with some projects . Innovation in Management is not the easiest of tasks . I will post some examples in due course .