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Executive Education

Companies That Disrupt the Status Quo Have a Competitive Advantage


Dr. Francis A. Granito

Chief Scientist, The Institute for Digital Transformation

Most who study organizational culture consider it an environmental factor or a constraint — like the weather — that you can’t really do anything about; you just deal with it. Some might consider organizational culture a matter of perception and thus wholly subjective and not measured by or correlated to organizational performance. But, what if we could objectively measure organizational culture through a scientifically designed instrument that filters the inherent subjective bias of perception? Then we could measure these capabilities against a set of qualitative criteria and relate that to an organizational bottom line, for example “customer satisfaction” might be related to revenue.

In the digital age in which we exist, a “disruptive culture” is needed to not only succeed but to thrive.  The digital enterprise requires a culture that is willing to challenge the status quo, as well as embrace innovation, experimentation and “fast failure”. In addition, it requires a perpetual focus on what’s coming next. The culture must permit continual disruption in every facet of the organization, including but not limited to: technology, business models, industry dynamics, offshoring and outsourcing strategies and regulatory management. They must also, however, possess the discernment to only execute disruptive change that results in competitive advantage.

An organization’s culture can be objectively measured by and correlated to competitive advantage by evaluating the following capabilities:

  1. Evidence-based decision-making: making decisions based on data rather than emotion or feelings. For example, is it normal to seek and consider all information even though it may be hard to find or is unstructured? The benefit of evidence-based decision-making is that it improves the quality and outcomes of decisions.
  2. Continual operational reassessment bias: the organization constructively questions any operating model, structure or process that has remained unchanged for an extended period. For example, when considering a change, success is not assumed, the possibility of failure is considered and there is tolerance of a possible failed outcome. This allows the organization to innovate through the natural skepticism of its staff.
  3. Critical thinking and analysis: while continual operational reassessment bias is an organization-wide objective cultural perspective, critical thinking and analysis is more an individual subjective perspective. Critical thinking and analysis is self-directed, self-disciplined and self-monitored, allowing the organization the agility to self-correct.
  4. Management innovation: there must be a management culture that discovers, practices and encourages entirely new ways to organize, lead, coordinate or motivate staff. Therein lies the opportunity — you can wait for a competitor to stumble upon the next great breakthrough, or you can become a management innovator and find it now.
  5. Organization innovation: the organization displays a culture of continual service improvement and practices affirmative and proactive encouragement and rewarding of innovation that challenges the status quo. An organizational mindset of continual service improvement is an engine for innovation and thus agility.
  6. Organizational leadership: there is a “visible and consistent support for change” from top management. This leads to a sense of ownership and accountability for overall performance which makes leadership of change and agility an organic effort.
  7. Agile values: the organization has a culture of following agile values like proactivity, responsiveness, trust, support of proposals and decisions of employees. For example, the organization views and accepts change as a tool to gain competitive advantages. An organization with agile values facilitates a well-directed approach for improvements and continuous assessment of actions taken.

These disruptive culture organizational capabilities can be qualitatively measured to drive innovation and agility necessary for competitive advantage. So, unlike the weather, don’t just complain about your culture; do something about it and treat it like any other organizational capability.

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