In traditional companies, people often don't pull in the same direction. Why is this? According to a recent study by Hays, only 37% of respondents were transparent about the direction and overarching goals of their company. This is consistent with our practical experience: Even in top management, there are sometimes remarkable differences in interpretation. Purpose, strategy and corporate goals are diluted at the lower management levels and are usually not understood by employees. No wonder there is a lack of implementation!
If there is no common “Why”, people have little or no engagement with the big picture. One common consequence is silo formation and silo thinking: Leaders and employees focus on their immediate environment and hardly ever think or work beyond (departmental) boundaries. This makes it almost impossible to solve complex customer requirements.
"Everything used to be better - even the future!” You “hear” this statement again and again in traditional companies. Accordingly, leaders and employees show little curiosity and enthusiasm for progress. The future is often left out of the equation, and they barely concern themselves with important economic, technological, social and ecological developments. It is obvious that this is not exactly conducive to long-term viability.
What's more, they like to look in the “rear-view mirror of past experiences” when searching for solutions to current challenges. Recipes for success from the past are replicated in the here and now without considering whether or for how long they will continue to meet market and customer requirements.
Experimentation and trial and error are seen as a waste of time. Short-term success is crucial for traditional companies, and almost any investment in the future seems unnecessary. The main thing is that employees don't make mistakes! Individual, collective and system-wide further development inevitably fall by the wayside, especially as people are only considered capable of learning and developing to a limited extent.
Whether companies do the right things correctly is ultimately decided by the market, or more precisely: The customers. This is not a new insight; as early as the mid-1950s, Peter F. Drucker stated in his book “The Practice of Management” that the purpose of a company is to create satisfied customers.
Unfortunately, many traditional companies still seem to believe that they know what customers need better than the customers themselves. And that is how they are organized: Customers and their needs are hardly ever talked about in meetings, and customer feedback reaches employees - if at all - via leaders. Interaction with (potential) customers? Not a chance!
If we imagine the environment as an unknown black space and consider how we enter it, there are basically three options: 1) we don't go in at all, 2) we meticulously plan every single step in advance or 3) we go in and feel our way forward step by step. There are certain risks associated with each option, but one thing is certain: Traditional companies choose either the first or second option. Why?
They prefer to focus on themselves rather than the environment, which they tend to see as a threat. They are worried that their cherished stability is in danger and do everything they can to defend the status quo. Accordingly, leaders and employees have a low affinity for risk and show little determination and courage to tackle things. (Market) opportunities that present themselves are ignored or not seen at all. They also do not have a culture of controversy: Leaders and employees do not argue about the best solution for customers. This means that mistakes, different opinions and valuable ideas remain unspoken.
Dealing constructively with mistakes and errors is a prerequisite for learning, further development and ultimately for adaptability and entrepreneurial success. In other words: Corporate culture makes all the difference! Part 3 of our article series therefore describes selected measures with which traditional companies in particular can initiate their cultural development.
