VISION: The need for a “performance-based culture”
By Alan Todd
 The question that has to be asked after the aha! moment when Friedman’s thesis is understood is what tools and techniques are there, and what levers can be used, to maximize the effort and take full advantage of the talent that a company has. Only by creating a performance-based culture can business hope to stay ahead of the continuous acceleration of business change that is caused by four mega-factors: Technology, Complexity, Competition and Globalization.
Technology gets better at exponential rates. The faster technology changes, the more organizations need to change to keep up.
Organizations are becoming more complex, with flatter hierarchies, broader spans of control, expanded global reach, and people doing several jobs. An organization that has multiple business units and multiple geographic territories must learn, for example, to cope with a matrix organization where everyone serves at least two masters and is accountable for their own performance as well as that of their team.
Competitors are getting better. Companies have become very good at copying business models, technologies, and processes. This is leveling the playing field. Automate all major business processes with ERP software; check. Outsource overhead functions to India; check. Outsource manufacturing to China; check. At one time, companies like Dell Computer had a competitive advantage based on business model speed. After a decade of leadership based on speed, HP effectively copied the business model and is now shipping more computers.
Globalization is changing the nature of business. Driven by technological improvements and societal changes, it is easier for companies of all sizes to serve a global audience, manage costs efficiently (via outsourcing and other sourcing means), and work continuously in multiple time zones. This results in the rapid launch of a continuous stream of innovative products and services from what feels like a smaller and smaller world. And the benefits to customers are readily apparent in lower costs, quicker deliveries, and higher quality. It is now common for a startup business to launch a global distribution strategy. Startups like Skype, YouTube, and Google all began by tapping into a global marketplace of billions of people, rather than a geographical limitation based on where they happened to live.
Performance
The only sustainable sources of competitive advantage are, to go back to Stewart, talent and effort. And the only way to assure the effective application of that talent is to create a culture where the way forward is clear and everyone knows and understands how to contribute to move toward the stated goals, and where exceptional performance is rewarded. That emphasis on setting a clear path will enable an organization to learn and adapt to an ever-changing business climate.
Alan Todd is the chairman of Corporate University Xchange. He can be reached at atodd@corpu.com
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