Or so Bertrand Russell wrote in his autobiography. And being a good patient, I will follow the doctor’s advice, and resume blogging in early January. Best wishes to all for a festive and relaxing holiday season.
Few institutions face greater turbulence than the U.S. Marine Corps. The Marines’ missions include not only combat but also evacuations, humanitarian assistance, peacekeeping, and counter-terrorism in some of the most unsettled spots on earth. The end of the Cold War made the world more turbulent for the Marines, which deployed every five weeks on average during the 1990s, a threefold increase in deployment frequency.
When General Alfred M. Gray became Commandant of the US Marine Corps in 1987, he began a series of far-reaching changes to the Marines. Gray had served in Vietnam, a war in which the Marines’ deaths exceeded the Corps’ combined fatalities in in seventeen of the eighteen
My recent posts have all dealt with organizational agility. The US Marine Corps is one of the most agile organizations around, and over the years I have learned a great deal in discussions with former Marines who bring their point of view to business. One of these is John Brown, who studied history at Harvard, served as an officer in the Marine Corps, helped the newly-formed Department of Homeland Security develop a platform to share data across agencies, and co-founded tech start-up Verical. John kindly agreed to share some of his thoughts on leadership, strategy, and agility in turbulent markets. John’s thoughts follow:
“Some of the most admired leaders in business have failed spectacularly to adapt to the growing complexity of today’s turbulent market – some for firm-specific reasons, but many
Agile organizations consistently identify and exploit opportunities ahead of rivals. An organization’s values, defined as the shared set of norms that unify a group of employees, inspire them, and define appropriate behavior, can promote agility. But not just any values will do. After more than a decade studying more and less flexible companies, I have observed a small set of values shared by the most agile ones: achievement, teamwork, creativity, ownership, and open communication. Firms use different terms to describe these values, and also include additional norms specific to their firm or idiosyncratic to their organizational history. But the core set of values is quite robust across firms that excel at agility over time. This post will describe the core set of values, why they matter for agility, and use the Reckitt Benckiser (RB) case as an example.
1) Achievement (aka performance, results-oriented, delivery, meritocracy, winning in the market)
To out-execute competitors on a consistent basis, agile firms must inspire employees to exert effort equivalent how hard entrepreneurs work in a start-up, and evoke this effort on an
Agile organizations excel at exploiting opportunities that arise in turbulent markets. Structural features of the organization, such as information systems, processes to cascade objectives, and incentives, constitute the organizational “hardware” for agility. But hardware alone cannot ensure the flexibility or urgency needed to adapt as circumstances shift. Corporate values provide the organizational “software” that reinforces systems and processes to provide agility
Corporate values are the shared set of norms that unify a group of employees, inspire them, and define appropriate behavior. Corporate values describe how people ought to behave in an organization, declaring certain behaviors worthwhile or admirable. Values differ from assumptions, or cognitive beliefs about facts and causal relationships. Engineers in a technology firm may believe that higher spending on research and development will lead to greater sales (an assumption), but respect the discipline that goes into a well-engineered product for its own sake (a value). I prefer the precision of the term “value” over the catch-all category of “culture,” which typically includes cognitive assumptions, normative values, organizational routines, symbolic actions, distinctive language, etc., but use the two terms interchangeably.
Abstract values, such as “quality,” “excellence,” or “innovation,” lend themselves to different interpretations, which is both good news and bad news. Abstract values can apply across a wide range of situations, compared
Market turbulence increases the value of agility–an organization’s ability to identify and seize opportunities to create economic value faster and more effectively than rivals. Organizations must align several features, including information systems, culture, and priority setting, to achieve agility. This post focuses on how incentives can help promote agility, using the case of consumer goods maker Reckitt Benckiser (RB) to illustrate the argument. If executives want to promote agility, they should ensure that their performance management system achieves the following five objectives.
1) Attract the “right” people in (and weed the “wrong” people out). Companies (including RB) often state that their incentive system attracts the “best” people, but this is not quite right. “Best” implies a rank ordering of
My last few posts have discussed agility, or an organization’s capacity to identify and seize opportunities to create economic value consistently faster and more effectively than rivals. Multiple organizational attributes promote agility, including incentives, corporate culture, information systems, and the processes to translate corporate priorities into individual objectives. My next several posts will analyze how different companies, including Reckitt Benckiser, Goldman Sachs, Anheuser Busch InBev, and America Latina Logistica have built agility into their organizations. (Note although I have had discussions with executives at these companies, all information in this and subsequent posts comes exclusively from public sources).
We start with Reckitt Benckiser, a company that is not a household name, although many of the products it sells are. With 2008 revenues of £6.6 billion, Reckitt Benckiser (RB) squeezes exciting growth out of boring categories year after year. The company sells leading products in categories including fabric care (Vanish, Woolite), surface-care (Lysol, Harpic), air fresheners (Air Wick), and over the counter health care (Strepsils, Gaviscon, and Clearasil).
Competing against much larger firms such as P&G ($79 billion in revenues for year ending June 2009) and Unilever (€41 billion in 2008 revenues), RB must rely on agility rather than sheer size to win in the market place.