I was recently reflecting that over the last few years I have worked in Organisational Development (OD) with more than a hundred Scottish companies; these have ranged in size from small university spin-outs right the way through to large PLCs. A mantra I have often heard is that “People are an organisation’s biggest competitive advantage” and it is certainly true that a well-trained and highly motivated team is one thing that competitors will find difficult to replicate.
Despite this I regularly encounter leaders who continue to focus on developing business strategy in isolation, with little or no consideration to OD issues. In many cases leadership is unfortunately still viewed as charisma and getting things done through sheer force of character. The research suggests it is those organisations that focus on developing people and culture within an organisation to meet the business strategy, which get the best results. This is particularly true where organisations are in a period of sustained and rapid growth.
To illustrate this I have summarised in the table below the key words and phrases that three Scottish based executives use to describe the success of leadership initiatives within their organisations:
These three companies have worked with Scottish Enterprise and video clips of their experiences are available on http://www.scottish-enterprise.com/grow-your-business/leadership/case-studies.aspx.
The key link between these three clients is empowerment. When everyone in an organisation is aligned behind a clear vision, then staff become more engaged and they will apply more discretionary effort to drive the business forward.
Across all three companies consistency features prominently. This is a message for leaders that once a vision has been set out then it is important that the strategy is not compromised by operational pressures, inconsistent decision making or different treatment of inviduals/departments. From this consistency comes confidence and there is an inextricable link between confidence and not fearing mistakes. When employees feel confident they aren’t afraid of making mistakes and, provided these are used as learning opportunities, then companies become more innovate and ultimately more successful.
In the 1990’s I worked for Toyota (GB) Plc and I think Toyota provide a good example of some of these themes. They are often regarded as a company founded on a management philosophy based around lean manufacturing and Just-In-Time production. However this is slightly simplistic and to better understand the organisation we need to understand “The Toyota Way”, where the strategic direction of the organisation is based on two key principles; Continuous Improvement and Respect for People.
This acknowledges that people actually drive systems and process. Where people are respected they take time to understand each other, they build trust and ultimately employees take responsibility. By removing the fear of mistakes employees take decisions, for example any employee in a Toyota manufacturing plant can stop the production line if they see a problem. This level of empowerment is unique in the motor industry it shows how people drive continuous improvement in an organisation and ultimately deliver the strategy. From the vision created by Toyota we can see how a multi-national organisation can be aligned behind a strategy, with all parts of the organisation working toward the same goal and become the global leader in their field.
However even with the same unifying vision, coherent strategy and a systematic approach to production things can go wrong, as they did in 2010 when the company was affected by unprecedented quality problems. It was not through continuous improvement that the organisation survived with its integrity intact, but respect for people and the consistent acts of the leadership team within the organisation. In the face of adversity the company created a strategy they actively communicated both within the business and externally, thus ensuring that all stakeholders received a clear message.
It is my conclusion that people are indeed a company’s greatest competitive advantage, but only when they are aligned by a clear vision that creates a culture within the business where they can thrive. It isn’t enough for leaders to have a strategy; they need to spend time communicating and making it relevant to everyone in the business, so that every part of the organisation pulls in the same direction. This can only be done through spending time with those who deliver the product or service because if they don’t understand your strategy; they will make up their own.
For further information about this article please contact email@example.com