Article (October-2016)


Digital Cultures - Intellectual Drivers

Dr. Ganesh Shermon

Designation : -   Managing Partner

Organization : -  RiverForest Foundation, Canada


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Change reflects intellectualization of the corporation. Making the organization energized with people, process where the intellect turns into the dominant force in the management process. In all change management efforts current business scenario, strategic positioning of the organization, structure, managerial values, corporate philosophy, the managerial styles and practices, impacted players become relevant for consideration of the facilitator. Organizations should make visible the value of intellectual depth and its application. Adequate communication should constantly take place to make members understand the value of application synthesis in all of their new ideas. Each communicating group turns into a network and eventually a network of networks. The premium one digital and social learning and its use as a critical competitive survival strategy should be made known vociferously. Intellectual corporations and digital in nature prosper in making learning happen realistically. It, to our mind, only demonstrates a further application of mind to make the change permanent and effective. Typically the corporation operates through identification of relevant systems, models, people to the cultural change process, bringing their values and identity together, network with relevant cross-team players at a systemic level, assess their intellectual compatibility, bring in commitment, define business goals and results and charges the team to move forward. There is a transparent and open communication involving review and feedback including action-oriented goals. Essentially this stage acts as a facilitation step in the intellectualization process. SMR way back in 1992 addressed  these challenges as the need for applications to be designed, built and nurtured using high level business models. "Emphasis will be on design of robust applications that adapt to both short term operational difficulties and evolutionary change". But there are many needs before organizations can attempt to build a sustainable digital culture. Some of these are mentioned below;

Need to understand Digital Business Models - 
At a simplistic level software organization, consulting, advisory firms, research, new product development, design and generic knowledge based value-adding companies (advertising, financial services, communication, entertainment, education, multi-product conglomerate corporations) are treated as knowledge firms given their role in development of raw data, creation of unknown into known and the utilization of people as the primary state of creators.

Need for Adoption of Cultures - 
People, who work in such organizations, must receive an opportunity to gain acceptance while they change the ways they think, feel and act in relation to the problems, issues or challenges on hand. The growth of learning capabilities and self-renewal attitudes brings in team congruence, candor and transparency in communication. There is a role played by culture, organizational models and Leadership in Creating an Intellectual Company.

Need for Cultural Intellectualization -
 Leaders may not be able to sustain the intellectualization effort without investing to change the fundamental mindset of people. In other words, leaders in the organization may need to create the culture of optimization. In many cases, leaders may need to manage a parallel cultural transformation, with focus on optimization, as they lead efforts to create an optimized organization.

Need for a Good FIT within Organizational Cultures - 
Successful organizations, typically a competing organization or a Performing Enterprise, will also seek a good internal fit, with their culture properly matched to their technology.  As stated, routine technologies provide stability and work well when linked with a culture that emphasizes centralized decision making and limited individual initiative.  Non routine technologies, on the other hand, require adaptability and are best when matched with cultures that encourage individual initiative and downplay control. Voluntary School s tend to ask for steady cultures where identifiable sets of members and member behaviors are asked, understood and appreciated. Intellectual Company models continue to be difficult to identify and map.

Need for Multi Culturalism - 
The organizational population will turn increasingly diverse in social and cultural milieu, perspectives, viewpoints and behavior, competing and at times conflicting and this would be a part of the everyday workplace. Cultural diversity (also known as multiculturalism) is a group of diverse individuals from different cultures or societies. Usually cultural diversity takes into account language, religion, race, sexual orientation, gender, age and ethnicity. Companies started to embrace corporate diversity in the early 2000s. This was due to many trends in demographics and a changing workforce. KPMG Research deals with these aspects. "Education and tolerance in the recent years have allowed gays, lesbians, and trans-identified employees to be open about their sexual orientation in the work place without the fear of persecution. Tolerance and accessibility has also allowed people with disabilities to be employed alongside fully able individuals. For a multinational entity, with customers and employees in different regions and countries, a global perspective on diversity needs to be adopted". 


Need to converge Leadership Styles with Culture, Organizational Models in a Digital Business context.
Leadership in turn becomes key for impacting organizational culture in the context of specific types of organizational model.  The role of the leader primarily focuses on creating key organizational systems and process that provide strategic contribution.  They position themselves to add value by defining organizational priorities in the organizational model that they work in (Example - Competing Organization Models and Market Forces) and by sensing conditions and events in the business environment that affect strategy.  Flatter and more lateral organizational structures and a decrease in the number of layers call for leadership from everyone. Leaders operate effectively when someone or the same set of individuals lead by challenging the group and helping it set priorities and pressing for excellence in performance. The leader sets direction for the organization and builds mechanism to allow people to understand what that direction is and to measure their progress.  It is particularly difficult for managers in their traditional hierarchical organization (Mechanistic or Institutional Model) to give best heroic leaders.  

Need for Aligned Organizational Models -
Effectiveness requires that an organization's culture, strategy, structure, design,  environment, and technology be aligned. The stronger the organization's culture, the more important it is that the culture fit properly with these variables. The successful organization will achieve a good external fit-its culture will be shaped to its strategy and environment.  Market-driven strategies, for instance in competing and performing enterprise models, are more appropriate in dynamic environments and will require a culture that emphasizes individual initiative, risk taking, high integration, tolerance of conflict, and high horizontal communication.  In contrast, product-driven strategies focus on efficiency, work best in stable environments, and are more likely to be successful when the organization's culture is high in control and minimizes risk and conflict.  

Need for Intellectual Hierarchies - 
Corporate hierarchies now turn into "intellect hierarchies", positions of leaders and managers held by those with a knowhow, know-what and the know-why, rather than an upgraded position in the hierarchy made available through a corporate career plan. Dan Schawbel the Founder of Millennial Branding states, "One specific technological trend that has a direct relevance to where, when, and how people work is the emergence of mobile communication and productivity tools. The problem is that most workers grow impatient with their current roles and think that the only solution is to move to another company. In a new study in partnership with American Express, we found that 73 per cent of managers are very willing or extremely willing to support employees who want to move within the corporation and 48 per cent of millennial employees are interested in making these moves. Employees need to look left and right not just up if they want to be successful. At the higher levels in an organization, you need to have a firm grasp on how different groups operate or you won't be able to manage them properly".

Need to understand changing managerial styles - 
Thus, leaders while influencing culture display managerial styles in the organization and may be expected to demonstrate behaviours different from their usual set of expected behaviours. In other words, there may be a need to re-define or adjust the existing leadership styles, competency framework and opportunities to display a variety of managerial skills. Cultural Leadership framework provides the "To-Be" state of the leadership behaviours and acts as a guiding light for leaders. 

Need to Converge with Intellectual Capital Movement - 
Concepts dealt with in this book are an attempt to pull together the developments over historical intervals the Intellectual Capital movement but more importantly to trace the emergence of human capital definitions, measurement tools and techniques. With this as the background the book will establish the need for a comprehensive human capital in the context of three variables, culture, leadership and Organizational Management and an understanding that is leading to the discovery of an Intellectual Company.

Need for Maslow's Hierarchy Has Changed - Individualism - 
Expectations and preferences of employees are becoming more diverse. Employees want more room to express their individualism, and they are expecting that HR services and programs should be flexible enough to accommodate their individual preferences. Monogrammed shirts with your name, as a brand is no longer the prerogative of the C Suite executives. Young executives are wearing made to order work wear that demonstrate their individualism. My work has to be fun, my life has to be fun and I want to do a job that's fun. Generation Millennial often have varying concerns: because of their deep know how with technology, they believe they can work flexibly anytime, anyplace, and that they should be evaluated on work product, not on how, when, or where they got it done.  The real revolution is a decrease in career ambition in favor of more family time, less travel and less personal pressure.  However, this group consists of a large mass that lack consistency in their outlook towards work life. While their expectations from employer's match with generic trends their work ethic to support such an expectation falls way behind. Guess WIFI connectivity, Facebook membership, WhatsApp and Battery are likely to be on top of these needs too!

Need to be Open & Transparent - 
Employers should increase transparency around compensation, rewards and career decisions. They should create a meaningful rewards structure that regularly acknowledges both large and small contributions made by employees. Debbie Amery of PwC, "Compensation and rewards have to be individually charted depending on the intellect brought in by the employee along with the time frame for its delivery. The company should have reward programs on a group basis for knowledge workers. The Performance Appraisal system must have built in rewards for system creators".

Need for Frequent Rewards - "Young are no longer saving as their parents did. Their debt is on the rise. In a North American context, Melanie Reuter, director of research for the Real Estate Investment Network, says, "They will be the first generation that is not going to be better off than their parents were," Her interpretation. 'But, because millennials are such a large group, representing about 27 per cent of the population', says Reuter, it's imperative that businesses gauge this group's behavior and respond accordingly. "If you don't pay attention to what this generation wants, regardless if you agree or not, you won't have a business soon because they are such a large cohort that they do have spending power."Nearly half of millennials (41 per cent) prefer to be rewarded or recognized for their work at least monthly, if not more frequently, whereas only 30 per cent of non-millennials would like that level of frequency'. 

Need for Global Influences & Mobility - 
KPMG research focuses on how enterprises driven by globalization and trade agreements, both employees and employers are now expecting greater mobility within and across the organization. They have seen trends such as increased recruiting at a global level, greater number of international mobility, choices and how employees face a vast array of options with respect to geographic, political, and social-conditions attributes of their employment. Both employers and employees now expect greater mobility within and across organizations. In today's world, employees are willing and often seeking to broaden their range of employment and career opportunities by making request transfers to a different city, region, country, or continent. In the Country, full labor mobility across the continent is now the norm.  

Need to Impact Labor Force - 
An often forgotten reality that is unlikely to ever go away is the presence and impact of labor force and their trade unions. The nature of labor unions can differ by geography and industry but their role, values and purpose at a broad level continues to go on and on. In some geography they have managed to adapt, work their way constructively with their employers to obtain a fair status for their constituents and in other geographies the degree of militancy and unreasonableness continues unchanged. Of greater degree of frustration is the trend of governments managing business enterprises and unable to deal with trade unions to make their support productivity and performance.  Tim Wright from Talent Cultures says, "Competition for talent is fierce because talent is a leading factor in a company's competitive advantage. Recruiting, developing and retaining talent are the tools that build competitive advantage. Talent management starts with recruiting. Stronger recruiting efforts contribute to greater talent acquisition. Employee engagement adds to developing and retaining talent. It demonstrates the company's appreciation of their value to the company - as it builds their value to the company. What company does not look for every possible way to gain advantage over their competition?"Consulting major KPMG Human Capital Practice report of 2012 (Shermon 2012) seeks to focus on the need for HR strategists to tailor their strategies to reflect their own organized labor circumstance, that HR strategy should not neglect organized labor, even in jurisdictions where it is not an immediate risk and how HR strategy should paint a long-term picture of the nature and risks of organized labor in their operating jurisdictions, and possibly even those of their suppliers. 

Need to be Non - Aligned - 
Alignment with corporate strategy on diversity directions needs to be attained. Relationships that are of a reporting nature in today's scenario where accountability is vested in jobs will turn into responsibility vested in people and their relationships.  Jobs by themselves, unless it is deeply entrenched with the overall business strategy, would turn meaningless given the dynamic set of change that would affect the business scenario on day to day basis. If the corporate strategy is driving the diversity objectives, then HR's structure, programs, and policies need to be put in place to support the corporate direction.

Need for Flexibility, Personalization & Customization - 
For many professions, work is no longer defined by the office location, nor by the hours of the day, nor by the specific tool used by the trade. Many employees have home-based offices and may perform their tasks before or after the actual workday. Flexible workdays, part time decisions would become common with employees determining work goals, work content and work methodologies depending upon the technological infrastructure available for effective performance.  Obviously what flows from this would be greater the technology infrastructure the better is likely to be individual output and contribution. Career paths would not be linear, would turn grossly flexible, lateral and would make horizontal growth that are knowledge intensive, real and visibly supervising an intellectual mind. Career paths would create comparable performance yardstick, meaningful measures and performance evaluation would insist customized evaluation process and tailor made compensation reward program. 

Need to Manage Contradictions - 
What is blatantly evident is presence of many leaders in given line functions whose titles distinctly connotes leadership but whose behavior borders on petty mindedness, turf creation, showing poor sensitivities, wining at every issue with a gross inability to courageously put deadlines, chase goals forward and lead the team by example.  These leaders are those who typically would articulate the right thing be it business goals, performance objectives, key tasks and benchmarks, quoting examples of other well run organizations, espouse latest management theories. In practice they are nothing but tyrants to seek power of pleasure and privilege to command and control people.  When not in the current role they are perhaps spending a lot of time to prove their leadership by demonstrating how other units or functions are not doing their jobs.  Organizations in our experience are grossly perceptive of such leaders and over time turn wary. Organizational counseling efforts are critical to up front leaders who continue to practice styles that worked in the past and educate them of the new realities. In our judgement these are classical cases of basic feedback and developmental systems not available in the corporation.

Digital Transformational Agenda requires building a viable business model; 

  • How have you defined your business model. What assets drive value in your business model? What do you consider as your asset? 
  • What "institutional capabilities" do you need to identify, nurture, build, let go, eliminate, alter to support your desired growth? Do you believe that you are managing a strategically focused organization?
  • Do you have an adaptable, reframed, perhaps, right organization and business structure to be able to efficiently identify your customer, market, enable, distribute, capture their needs and then serve, deliver or manufacture and supply its products (and services) to the target customers?
  • Do you believe that you have a reciprocal, sensitive, perhaps, dynamic (open) organizational culture to understand, appreciate and scan its business environment, engage its dynamic nuances and adapt itself for growth in a continually changing World?
  • Is your leadership concerned at the pace or speed or lack thereof, to make change happen given its  objectives?
  • Is the organization reaching a state of inertia reflecting in depleting margins, shareholder value and dissipating customer satisfaction or is the organization is gaining greater degree of competitiveness, value realization and profitability and wishes to consolidate?
  • Has the organization over time gained a degree of complexity that makes it difficult for it to be agile, nimble, responsive & sensitive? Does the organization wish to retain simplicity & nimbleness like when it was small?
  • Does your organization have efficient internal processes and systems to effectively market, manufacture and deliver its products (and services) to its customers?
  • Is the leadership concerned with Single view of the truth? 
  • Is a large physical asset base a strength or a weakness?  Is size and scale a problem or a benefit?
  • Does the company market a bundle of complex product - service offerings, develop complex products, and develop unique processes to meet changing market demands including unique business model processes?
  • Is there a degree of Complexity deeply rooted and embedded in an organization in the way we do things?
  • Is there an absence of cross-functional /cross business/cross segment involvement & requires senior level sponsorship to drive decisions across multiple areas?
  • Has the company stacked new processes, governance models, technologies, and operating principles on top of old?
  • Complexity is a proxy for costs and is it a compounding problem? Have you attempted simplifying processes and the way you get things done? Has technology helped make change happen?
  • Organizations can only do what is within their control- reduce costs, but, lack of technology, KPIs & metrics, a scorecard blocks sustainable cost reduction or value enhancement as it feeds upon itself - Are things within its control being done? 
  • Are your Headcount optimizations supported by process or system simplification? Are you chasing headcount reduction without a strategic end state?
  • Headcount optimization sever informal process ownership, human process integration and reduce the ability to plug gaps - The resulting instability exacerbates complexity, especially when limited resources are left to fix the problem? Do you have a history of such experiences in your company?
  • Companies often define their operating platform in relation to their business strategy, when operating strategies are not aligned with business strategies to define operating requirements, simplification is eluded? Would you consider your enterprise to be Simple Enabled? Or Simply Enabled?
  • Do Technologies, Socio Technical Systems, Self Help Methods& Processes talk to one another? Do you have sufficient Analytics to make appropriate business calls?
  • Where do you see the organization, in a few years from now? Do you have a People agenda supported by an empowered HR Leadership?
  • Is your organization decaying and in a rut? Here are a few questions. Answer YES for you to know where does your organization stand in your personal imaginary and should you be doing something about it? DECAY & RUT, as defined as, presence of autocratic leaders lacking governance, megalomaniacal CEOs, amiable - greedy boards, corrupt financiers or promoters, power hungry, manipulative, fear mongering HR Heads, control centric CFOs? Does your organization thrive in playing games, politics to get things done? Does your organization manipulate your financial statements to play for Wall Street - or BSE quarter on quarter? Does your organization use people as "Staffing Needs", or does it bribe its associates to follow a corrupt path with their customers to win jobs? Does your organization steal IP (Intellectual Property - - products - processes - Knowledge) from its customers, competition and employees? Is your organization technology challenged, do all critical actions not transparent to analytics or scrutiny? Do you see your internal and external auditors more keen to keep your organizational leaders happy rather than do their auditing job effectively? Do you see the presence of many regulators in your company, yet nothing happens to be compliant? Does your organizational lack simple, transparent internal processes to attract, retain, train, reward and recognize people?Do you see top talent not being retained while loyalty is rewarded? Does your organizational staff functions - Cost Centers (Finance, HR, Legal, PR, Spreadsheet Specialists, MIS Managers, CEO's Office) rule / over rule / ride Customer/Client Facing Functions?Does your organizational corridor gossip reverberate with stories of scandals, misrule, inappropriate leader behaviors, leaders sleeping their way up their career ladder and yet you don't see things changing? Are you constantly suspicious of your colleagues not knowing who is squalling against you or another? Does your CEO like to see his photograph plastered in all journals, magazines, press, news media and "whatever" conferences? Do you see your CEO and C suite leaders play with their staff pets and favorites? Do you see - hear - watch more from your CEO or leaders through their Tweets,  Instagram, Facebook or Linked In postings? Is your organization proliferate with leaders who are actively building their personal image, reputation and brand value? Do you see yourself stuck in a cultural decay - rut, visible, real and frustrating? Do you experience an organization and its leadership lacking in values - character - Willing to sell their soul for greed - reputation - tenure and role? And if YES,Are you not tempted to become a "Whistle Blower" and if so what has stopped you so far? Digital Cultures make visible courage and character and challenge organizational cultural decay and rut!

Need to sustain change - Creating and sustaining an Intellectual Company may require extraordinary leadership commitment. The avenues of intellectualization may be explored and leveraged only with the right leadership alignment, a cultural mindset and a business model that focuses on realizing short and long term value. Leaders may be expected to lead organizations in a way very different from the way they may have been traditionally leading the organizations. 

(This is the SECOND of a series from the forthcoming book,"Digital Cultures - Age of the Intellect").