Culture Is Key For Social Business Success

Culture. Culture is how an organization makes sense of the world, a set of assumptions internalized by all its members. Most organizations are the cultural equivalent of stone age tribes: focused on “the hunt,” “the kill,” and what’s for dinner today. Like stone age tribes, they’re fractious, unproductive, and easily broken. In the culture strategy, social tools are used to help an organization make better sense of the world. Accountability, roles, tasks, processes and incentives shape culture. In the culture strategy, social tools are utilized to reconceive them. Wal-Mart’s Sustainability Index is a radical example of a culture-changer, altering all of the above, helping Wal-Mart’s entire ecosystem make sense of the world anew.

Many organizations are struggling with the changes impacting their workforce. Whether it is shifts in age demographics, talent building and retention, or leveraging Web 2.0, there is an air of desperation for clarity. C7group offers a comprehensive approach that shows business leaders and human resources professionals how to leverage the power of social media tools to build a truly connected global workforce.

The C7group is named for our model for the social business culture of tomorrow. A mathematical model for cyclical group behavior  – C7 is the model for a business culture that is adaptive. Our serendipitous coincidence was the identification of lots of things that began with “C” that have a profound effect on the success of social business initiatives. Some of the C’s include collaboration, costs and cycles, customer service, centralized intellectual property and competitive advantage. We believe if an organization get’s all the “C”s working together in a way that embraces change, they can truly make the radical shift to 21st century sustainable success. Culture or Ideology, we think is the most important when it comes to the success of social business initiatives in large organizations.

” In my view, the successful companies of the future will be those that integrate business and employees’ personal values. The best people want to do work that contributes to society, with a company whose values they share, where their actions count and their views matter.” – Jeroen van der Veer, Chief Executive, Royal Dutch Shell (2009)

As a result of massive doses of external constraints on business, the past two decades have seen a trend in many U.S. companies from aggressive, tough-minded fast movers, with confident independent middle managers, to much more procedure-bound and uncertain or slow-acting bureaucracies. Decisions of importance must now conform to volumes of policy manuals and be ratified by increasing numbers of specialist staff people, particularly legal and accounting staff. Clearly this bureaucratic strangulation leaves much to be desired. To hamstring middle management by imposing layer upon layer of caveats and internal regulations, and by requiring that their decisions be ratified by burgeoning hierarchies of staff specialists, serves only to slow managers’ response times, destroy their initiative, and demotivate those that have any aggressiveness at all. Equally clear, for a company’s middle managers to build and maintain momentum, they need to be able to act autonomously and confidently, yet at the same time there is a need for them to act in ways that are appropriate for the overall company they represent.

There is a growing emphasis within the field of strategic management on the importance of top management teams (TMTs) and their influence on firm performance. “Upper echelon theory” suggests that the demographic characteristics of top management influence decision-making processes which, in turn, affect organizational outcomes. Our studies and experience have examined the relationships between top management demographics, corporate ideology, and firm performance. Corporate ideology mediates the relationship between top management demographics and firm performance. We have considered several important questions. First, do top management demographics influence ideology? Second, does corporate ideology influence firm performance? Third, do top management demographics exert a direct effect on performance? Here’s the science:

Upper echelon theory (Hambrick/Mason 1984) suggests that managers bring a cognitive base and values to the decision-making process that restrict their field of vision. The cognitive base acts as a filter between stimuli and subsequent perception. The upper echelon perspective suggests that demographic characteristics act as observable measures of the givens’ that managers bring to the decision making process. The assumption underlying the upper echelon perspective is that demographic characteristics serve as surrogates for the beliefs, values, and cognitions of managers.

Organizations wield great power over the structure of contemporary life. Using the rhetorical method of cluster analysis, studies have investigated the construction of work/life issues on Web sites of companies on Fortune’s 2004 list of  100 Best Companies to Work for. By identifying key terms and the terms that clustered around them, studies have uncovered a corporate ideology of work/life: 1) work is the most important element of life; 2) life means family; 3) individuals are responsible for balance; and 4) organizations control work/life programs. Research concludes that organizational work/life programs may increase, rather than decrease, the amount of control organizations exercise over personal life.

The literature links top management demographic characteristics to innovation and growth. A recent study reported that innovation in the banking industry was related to greater levels of education and functional diversity (Bantel/Jackson 1989). Size of TMT, tenure, and heterogeneity of industry experience were linked to higher growth in new U.S. semiconductor firms (Eisenhardt/Schoonhoven 1990).

This means that organizations need to apply the fundamental principles of systems thinking, business and personal transformation to what the Dachis Group call “Social Business Design”.

A good culture can achieve the following top 5 benefits:

1. Increased revenues
2. Reduced costs
3. Increased employee productivity
4. Provide a competitive edge
5. Reduce time to market

A culture change program can greatly enhance the working relationships you have with your stakeholders. When we engage with brands and larger companies (such as Johnson and Johnson, McDonalds, Verizon Wireless and Edward Jones) our enthusiasm and excellent facilitation skills make it possible for us to communicate well with senior management teams and your employees to deliver some excellent results with regard to strategic direction.

Building lasting impressions. Moving things from the ordinary to the extraordinary. Transforming expectation into sheer delight where new messages are heard with open minds, new ideas greeted with tremendous energy, award-winning work is produced via excellence in execution infused with unrelenting enthusiasm. The point where passion and precision meet is tomorrow’s business culture.

Too often when social business is discussed, what we hear about are the great new features and functionality of product X from vendors placing technology at the center instead of people.

That is just plain wrong. Sorry tools vendors.

We suggest before you purchase a product from a vendor that you must understand your current culture. Should your culture need to be transformed, who the key stakeholders are, what change management programs might need to be initiated, and what business problems are trying to be solved.

  • A Culture of Sharing
  • A Culture of Collaboration
  • Culture of Innovation
  • A Culture of Knowledge
  • A Culture of Learning

Bringing an Organizational Development Specialist into a mature organization can be very threatening to people, meaning that barriers go up everywhere and people hope it will flop – and the sooner the better. C7group has a way of working with people that is probing and insightful, and at the same time friendly and empathetic. People find the experience nothing but positive. The result is a much more effective and enduring result – and genuine organizational improvement.To succeed in the modern digital World of business we suggest some combination of grass roots, team-based, and top-down; and not completely connected to vision, mission and values.

Culture needs to be sitting at the head table as companies embrace social business. Zappos is the poster child for this. Here are their 10 Corporate Values. (thanks Tom Peters for the slides).

Changing culture is complex and takes considerable effort and time to get right, but it is an effort we need to be expending considerable energy and effort at if we want to enjoy the full benefits of collaboration, sharing, learning, knowledge and innovation.

Using the social to “build buzz” and “push product” is about as smart as using a warp drive to visit your local Wal-Mart. Social tools today are used mostly as a new “channel” to push the same old useless stuff of the industrial era at hapless “consumers.” That’s meaninglessness at it’s finest. It’s the least productive  and most soul-deadening use of a formidably powerful tool.

Social media strategy fits inside a marketing (business, corporate) strategy, and is shaped by it. Social strategy fits outside business and corporate strategies, and shapes them. Social strategies are about rewriting the logic of the industrial era entirely, shifting gears in how we think, envisioning a broader, more powerful, more challenging use of social tools. They are about developing the capacity to understand an organization’s role in society, and how to play a more constructive one, wielding sociality as a source of advantage by acting radically and more meaningfully than rivals.

Social strategies are about reinventing tomorrow. Their goal is nothing less than changing the DNA of an organization, ecosystem, or industry. Want to get radical? Stop applying 20th century principles (“product,” “buzz,” “loyalty”) to 21st century media. The fundamental change of scale and pace that social tools introduce into human affairs, their great tectonic shift, is the promise of more meaningful work, stuff, and organization. Start with “the meaning is the message” instead.

Join the discussion. How has your culture changed to meet the change in 21st Century market conditions? We’ll happily spend an hour or two meeting with your leadership to discuss how we can prevent your business from getting run over by your competition that “get’s it” and has already started to take competitive advantage from social business.

Thoughts? Comments? Questions? Criticisms?

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1 Comment

  • Mark I believe you nailed it.
    We’ve helped numerous businesses with their social media. Those that have the most success are those where the company leadership is involved. That has a direct correlation (in my observations) of companies that have an open, sharing culture. These companies are not afraid of the open, social dynamic. In fact these leaders embrace it and foster social communications which in turn created an air of trust for staff and most importantly customers.

    Thanks for the article.

    Ric Pratte

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