July 17, 2012
I just finished reading Corporate Culture: The Ultimate Strategic Asset by Eric Flamholtz and Yvonne Randle. The book is based on the premise that company culture is a critically important yet often uncredited driver of success and failure, even correlating to financial performance. And, like other aspects of modern corporations, culture requires active management. Companies with great cultures don't get there by accident. The book is a worthwhile read for those with an interest in general management and the implications of culture for mid-sized to large companies.*
The book defines corporate culture as the "values, beliefs, and norms that influence the thoughts and actions (behavior) of people in organizations." The connection between cultural attributes and actions made me think about applying the concepts of culture directly to digital intelligence. Why is culture important in the context of digital intelligence? Because simply hiring people or implementing technology isn't enough to achieve digital intelligence proficiency. I see proof of this on a daily basis as I work with clients who struggle with digital intelligence despite substantial investments in the best technologies and most talented teams. These organizations have many of the individual pieces but cannot put the puzzle together. Culture is the connective tissue that binds technology, people, and action together.
To take the idea a bit further, let's look at the five key components of corporate culture according to the book and their digital intelligence implications:
- Customer orientation. How a company views its customers; in digital intelligence terms, are you able to understand customer interactions across channels and respond to the needs of individual visitors and customers?
- Orientation towards employees. How a company views its people; in digital intelligence terms, are the insights and expertise of analysts and business stakeholders valued, and do staff possess the right skills within an effective organizational design?
- Standards of performance and accountability. How a company measures employees for meeting its mission; in digital intelligence terms, are metrics and KPIs tied to business outcomes and are they effectively delivered and actionable?
- Innovation and commitment to change. How a company embraces change and innovation; in digital intelligence terms, is continuous optimization considered a key approach for assessing the impact of content, promotions, and features?
- Process orientation. How a company operates; in digital intelligence terms, is decision making data-driven and are appropriate processes in place to properly govern and scale analytics activities?
It is notable that the corporate culture framework organically incorporates elements of all four strategic digital intelligence components – technical approach, ownership structure, metrics and KPIs, and optimization.
How can you use culture as a lens into digital intelligence? Putting a cultural perspective on the strategic digital intelligence components provides a framework for understanding elements that are largely intangible, that is, they are rarely visible on balance sheets, org charts, or dashboards. Use the framework to:
- Prioritize investments. Look for cultural consistency when considering staff, organization, project, and technology decisions to ensure adoption and actionability; this perspective is also an effective "tie breaker" when competing initiatives appear to be equal in terms of traditional evaluation points.
- Identify digital intelligence gaps. Build a digital intelligence culture map for your organization against the five components of culture. Expressions of these facets may be very explicit or they may appear to be missing altogether. A "lack" of something doesn't mean it doesn't exist, it is simply poorly defined and should be considered a candidate for active management and remediation.
- Hire staff. Cultural fit plays a huge role in a candidate's ability to contribute to digital intelligence at your firm, arguably more than academic credentials, references, and work experience. Evaluate recruits against your firm's digital intelligence culture. Are they customer focused? Can they work with other staff to develop effective analyses? Do they understand how to build business oriented measurement systems? Do they embrace change? Can they follow your firm's processes?
- Guide career decisions. Are you considering making a move? Be careful about basing employment decisions purely on more compensation and a fancy job title. Evaluate prospective employers' cultures to understand their true commitment to digital intelligence success. Does the firm "listen" to customers? Do they invest in the development and promotion of employees? Is data used to drive business decisions? Do they encourage experimentation? Do processes support efficient analytics without limiting innovation? In the case of earlier stage organizations, use cultural indicators to validate their ability to effectively scale up a digital intelligence program.
It's interesting that the framework described in Corporate Culture provides a convenient wrapper for exploring the digital intelligence components, even in cases where these capabilities are quite subtle or are affected by complex relationships within a company. This is also an important reminder that our success is often determined by much more than technology; the human element deeply impacts even the most analytical efforts.
* Side note – If your interests lie with startups and managing high growth companies, I strongly recommend Flamholtz and Randle's Growing Pains.