For those companies looking to grow a successful 21st century organisation despite the uncertainties, the important question continues to be: What must we focus on to be leading-edge?
According to James Murphy, founder of Engage International and The Lotus Awards, the following four pillars provide a useful framework to inform the answer: Company culture, innovation, sustainability, and customer experience.
Leaders (at all levels) who naturally understand these four pillars and have the mindset to espouse them, have the best approach to overcoming daunting circumstances and so give their companies a better chance to grow and perform at higher levels.
The four pillars are incorporated into the ‘COLOURS’ model developed by Murphy, which underpins The Lotus Awards 2018 and 2019. “Our philosophy is based on the principle that great organisations need to stop looking at culture, innovation, sustainability, and customer experience, as separate entities. The idea behind the COLOURS model is that white light is made from a spectrum of colours, linking the elements within culture, innovation, sustainability and customer experience.
“If companies work on these four pillars, they will become more aligned, productive, and will give their employees a greater sense of purpose,” explains Murphy.
MARGINALIA spoke with Murphy to explore the COLOURS model and in this interview, he describes how the four pillars can outline a pathway for organisations to approach their challenges and to succeed in the 21st century. He sets out the links between company culture, innovation, sustainability, and customer experience by pointing out that ‘trust’ must be embedded throughout.
Gloria Lombardi: The benefits of a strong organisational culture are clear and established in most people’s minds, but what makes a great company culture?
James Murphy: From the work I have done with companies over the years, the literature I’ve studied, and also last year’s Lotus Awards entries, I have observed at least six common components to a great company culture.
It starts with the vision or mission statement; it’s the purpose of the business, which all the employees can relate to. The mission should guide almost all decisions, providing a framework behind strategies and tactics. It should also orient other stakeholders such as partners and suppliers. For example, Oxfam’s vision is ‘a just world without poverty’ – it is a bold statement, which makes their aims very clear to everyone inside and outside the organisation.
The values of the organisation are at the core of the culture, and must be authentic. Defined values should clearly articulate the principles that guide the organisation around how to achieve its purpose, so that everyone has a shared understanding.
The practices. Values must be made manifest; they must be brought to life through the actual practices of the organisation and people. The organisation, as a whole, must act in alignment with its values.
The people. Culture emerges from people’s behaviours, from the organisation’s practices. To develop a great culture, employees need to believe in the mission and values of the organisation. Not everyone has to agree with everything the company does and says, but everyone should support the purpose of the company. This is why recruiting the right people is so crucial.
The narrative is the history of the organisation; it is the unique story and heritage that the business has lived through and expresses.
Finally, the place. This is the environment where employees work together, interact, collaborate and live their working day. Certain cultures are very progressive in the way they create the workplace, with innovative buildings and working spaces that expresses a distinctive atmosphere. Just think of Facebook or Google offices. But today, of course, ‘place’ also includes the digital workplace, which is driven by the advancement of technology. Place, whether physical or digital, impacts people’s behaviours.
There are other elements that contribute to and influence a great company culture, but these six are the foundation.
GL: How does company culture connect with the other three pillars in your COLOURS model? Let’s start with innovation.
JM: The company cultures that drive innovation almost always celebrate diversity and inclusion in all their forms.
Dr Ian Dodds, the CEO of Ian Dodds Consulting, who won a Lotus Award in 2017, is an expert on this topic. He says that an inclusive leadership drives innovation because of the ‘Diversity Trumps Ability Theorem’, which states that a diverse group of people will consistently outperform a homogeneous group, providing they listen to each other and explore differing points of view. This latter requirement is satisfied through inclusive leadership.
Creating a learning culture fuels innovation too. People feel they have a voice, a way to express their ideas. Ideas can come from anywhere within the company; it’s not just the people on the board level, the senior leadership – office workers, front-line staff, remote employees, juniors, new hires, etc. can all contribute.
A mature learning culture generates numerous, ongoing ideas, creatively; reviews those ideas collaboratively, potentially groups them by theme, and then narrows them down into something innovative, which is put into practice. Innovation isn’t a cerebral conceptual matter, it’s about directly improving, or creating, products, services, and ways of working.
The business must encourage people to be experimental, and to step outside comfort zones. Failure is an option; it has to be safe to try new things.
Damian McAlonan, founding partner of the Boost Partnership, points out that the very nature of innovation is about doing something you haven’t done before. He says, “It’s likely that doing something for the first time means you’re not going to be 100% accurate, thus an element of failure is introduced or seen as a risk. It’s in this four letter word that learning, innovation, and culture is stifled. The nature of risk is therefore wrongly fixed in the minds of decision makers who see themselves as custodians rather than pioneers in companies today”.’
He goes on to say how managing by consensus reduces the appetite for risk and the capability for innovation.
Because of the way the world is changing – just think of all the emerging technology that is entering the business world – if a company does not create a culture of innovation, it will eventually fail and cease to exist.
GL: What’s the link between innovation and sustainability?
JM: At the core of a sustainable business is the ‘triple bottom line‘ (TBL). This is an accounting method for responsible businesses, which consists of three Ps: people, planet, and profit.
If we look at how a culture of innovation can drive sustainability, it goes without saying that such a culture is built by its people; without people there are obviously no innovations. So, how socially responsible is the organisation in conducting its operations? In treating its employees? This is what a sustainable business looks at.
Innovation is a key driver for profit. Coming up with new ideas and new, better, products will create opportunities for sales and profit. A good example is Monzo, a brand new banking company. Monzo is a smartphone-only bank account. There are no set-up fees; there are no forms to fill out; you just take a picture of your passport, you fill in some brief details and you’re done. I love the idea of taking a centuries old business like banking and making it fit for the times we live in. Those are the types of innovations that drive profits. If you don’t keep on improving, someone will come along and do it better.
Finally, the planet. To be conscious of the bigger picture, and socially and environmentally responsible, organisations must measure and understand their impact upon society and the Earth. Today, more than ever before, people want to work for ethical companies; individuals want to buy products and services from ethical companies. They want to know that the service that they’re using is not contributing to the pollution of the environment. They like to know when companies are trying to reduce their carbon footprints. And such sustainable practice complements and drives profits in the 21st century. Anders Dahlvig, CEO of IKEA, recently said, “Corporate social responsibility is not just about managing, reducing and avoiding risk, it is about creating opportunities, generating improved performance, making money and leaving the risks far behind”.
So, within a competitive marketplace, a business can compete on costs, or services. But they are now competing on ethics too. Thirty years ago, there was less concern around sustainability. Nowadays, people have become more socially aware; they are more socially conscious about what they consume. Many will not buy a product that has been made in a workplace that has poor, socially unacceptable working conditions. Many consumers would spend more just to know that they’re buying ethically sourced products.
GL: So logically I must ask about the final pillar, can you explain the link between company culture and the customer experience?
JM: A culture of sustainability and innovation – sustainable practices and innovative products or services – influences the customer experience; such a culture can attract more customers and support the delivery of excellent experiences.
That company culture certainly impacts the whole customer experience. If a business has a great culture, which reflects and manifests its authentic values in what it does, then it’s much more likely to deliver better customer service. After all, if an individual experiences poor service, they’re probably not going to buy again from that business.
Author and motivational speaker, Simon Sinek, shared the example of Starbucks. “Starbucks was founded around the experience and the environment of their stores. Starbucks was about a space with comfortable chairs, lots of power outlets, tables and desks at which we could work, and the option to spend as much time in their stores as we wanted without any pressure to buy. The coffee was incidental.”
Debashish Sengupta, Engage International’s partner and author of the book, ‘The Life of Y: Engaging Millennials as Employees and Consumers’, also argues at length how a volatile, uncertain, complex, and ambiguous (VUCA) world has made it pertinent to make culture a driver of innovation and sustainability. He notes, for example, how Samsung’s transformation from a low-cost equipment manufacturer to a world class electronics giant is a testimony to how cultural transformation successfully led an innovation-marketing-customer centric strategy.
Therefore, aligning the customer experience with the culture of the organisation – for example, through purchase and delivery – is essential to thrive in the 21st century. As Sengupta puts it, “A culture is engaging only when it drives innovation, promotes sustainability and creates win-win customer experience. Sustainable organizations will be more engaging and also profitable in the future, making profits not only for themselves but also sharing them with people and planet”.
GL: The element of ‘trust’ appears into your model too. Why is trust so critical to include?
JM: A sustainable company, which is socially responsible in whatever it does, and that pursues good ethics, makes people trust its brand(s) more. Employees are more likely to want to build a relationship of faith and respect with the employer; as does the customer.
By aligning the company values throughout the loop of culture, innovation, and sustainability, companies can create a foundation of reliability, confidence, and reassurance. There are many businesses that are setting a good example. Lego is certainly one of them. Aside from being a well-known, international firm operating both as toy and education company, the business, which deals with plastic material, continually works to improve its environmental practices.
If, like Lego, a company builds relationships of trust, they will drive better customer and employee experiences. Consumers will be enthusiastic about buying and employees will work harder. Not only that; they’re also going to give you a little bit extra, which, in turn, helps to drive even more innovation. To build successful, 21st century organisations, trust is what we need.