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Today we all operate in a Reputation Economy; a marketplace where stakeholder support is now based more on perceptions of your company than perceptions of your products or services. 56% say that reputation is a High priority to executive management and board of directors and 63% expect reputation management to be a higher priority for their company in the next 2-3 years.

Stakeholder perceptions of company behavior are now the lead driver of enterprise value. Studies show that companies with high reputations are worth as much as 150% more than those with low reputations.

More and more companies are managing long-term sustainability to improve processes, pursue growth, and add value to their companies rather than focusing on reputation alone. Yet, organizational culture does not make the priority list of many leaders involvement of sustainable competitive into everyday business activities (Day-to-day operations).

Within business practices, sustainability is closely related to corporate social social, responsibility. But the notion of sustainability has a number of sub-headings. First there is the issue of environmental sustainability, which is essentially the value, the way a corporation conducts its affairs, the importance, and the meaning which something or someone has in the eyes of others. Second standard, which I raise here, is “sustainable competitive advantage” the role of the individual, as employee, as employer and as consumer.

Companies in resource-intensive industries have been dealing with sustainability issues for a number of years, but the pressures are now registering far and wide. Nonetheless, plenty of companies still struggle to view sustainability as an opportunity.

Responsible business and sustainable profits are embedded into the function of the board

Overview: day-to-day operations and stakeholders interests in corporate strategy and risk management: Implementation of new policies in supply chain, standard procedures and other business practices.

Any discussion of business sustainability would include the issues raised above, but it would also bring into focus two other sets of relationships. First is the set of relationships between the corporation and its external contexts. These would include the notion of stakeholder’s interests, and the way companies is perceived and respected by important groups.

In the Reputation Economy, where all senior executives understand how important reputation is, there are still pockets of resistance to the idea that reputation can be strategically managed or leveraged as an asset.

Today, well-functioning boards of directors play an increasingly important part in shaping corporate performance and investor perception. In addition to their checks-and-balances roles, boards’ strategic guidance, oversight, and effective decision making can provide invaluable direction and support to companies as they grapple with the challenges of globalization, enhanced business volatility, and intensifying levels of competition.

The second is the set of relationships between the corporation and its internal contexts. These would include the employees, of the corporation and what is valued, included the “organizational culture” and how to uncover sustainability issues—economic executives see as most critical and to addressing these issues in the organization culture most effective way.

Competitive strategy begins with the iterative assessment of the external environment and the organization’s internal capabilities. This process of looking outside as well as inside is known to strategic planners by the acronym “SWOT”: Strengths, Weaknesses, Opportunities, and Threats.

Many companies recognize that today, more than ever, their people have become their most critical competitive asset. But they need to sharpen their efforts, integrate processes for greater impact.

In the “business context,” the organizational culture is an important determinant of how members deal with customers; how members treat one another as fellow members; and how leaders and managers of the organization motivate, reward and develop members.

Because organizational culture is complex in nature it has been suggested for example, that organizations should strive for “adaptability” by strengthening their culture. behaviors and processes that will make them more responsive to customer needs and more sustainable competitive.

One reason organizational culture does not make the priority list of leaders is that it is hard to define. It’s squishy. It’s complex. Sometimes it’s even contradictory. I can see why culture takes a back seat. It turns out, however, that the complex nature of culture actually drives its power.

Having the best product or making the perfect strategic move doesn’t buy you much time at the top. The competition moves faster than it used to. As Rita Gunther McGrath wrote in Harvard Business Review, the landscape has shifted from looking one thing that sets them apart is that,for that long-term, sustainable competitive advantage to managing more of a portfolio of “transient advantages,” moving from one short-lived advantage to the next.

“The field of strategy needs to acknowledge what a multitude of practitioners already know: Sustainable competitive advantage is now the exception, not the rule. Transient advantage is the new normal.

But remember, the whole point of culture is to drive the success of the enterprise. Waiting to work on your culture until after you become successful actually condemns you to a perpetually mediocre culture. This, in turn, weakens your ability to succeed. It’s a negative flywheel effect.

Focusing on culture not only removes this negative flywheel, it can replace it with a positive one if you do it right. when developed and enacted in a thoughtful way, guidelines for behavior can help employees. And, unlike products and strategies, which can be quickly copied, the culture advantage has more power.

When the discussion turns to “organizational culture” or “corporate culture,” most people have some sense or recognition of what the concept means, at least to them. A fairly simply definition, or explanation, is “the way we do things around here.”

The fact that it is complex and challenging only means that any advantage you gain over your competitors will be tough to match. So, how do you secure this kind of advantage? It starts with understanding what “organizational culture” really is.

A definition

Organizational culture is the collection of words, actions, thoughts, and “stuff” that clarifies and reinforces what a company truly values.

Culture is ultimately about what is valued: Your culture is the collection of things that clarifies and reinforces what is really valued by the system. And that means it’s complex.

Four things in the definition that create your culture:human-task-management

  1. words,
  2. actions,
  3. thoughts, and
  4. stuff.

The first three are brought to life by you and your people. Culture is a complex combination of what we say it is, our behaviors, and the underlying assumptions and thinking behind it. As you might expect, those three areas are often inconsistent, which is one reason why culture can be so messy.

For example, we’ll say we value customer service, but we’ll also say we value being strategic and focused on the long term. Those values are nice, but at times are quite opposed to each other. One is proactive and one is reactive, and to figure out where the culture really stands on that contradiction, you’ll have to assess several things at once. It’s the combination of what people say and what they do that will ultimately determine how those two values are balanced.

Furthermore, “sustainability” is not a state, it is a process; and in order to attain and maintain these processes expertiocratic approaches have to be re-examined. Scientists, consultants and managers do have important roles also in the more sustainable futures, probably not as creators, but rather as facilitators.

Their task is to initiate and support the process of sustainability and to facilitate the continuous common search for balance firms’ efficiency, effectiveness and competitiveness.

It becomes then something that you have to piece together, recognizing you’ll find some contradictions along the way.

Tangible things like office layout, office location, office decor, dress code, what types of computers you use, etc. These also reflect what is valued, so they have to be included in your analysis of what your culture really is.

  1. Words,
  2. actions,
  3. thoughts,
  4. and stuff

give you things you can work with. They give you areas where you can experiment and change and learn. And they keep the conversation about values moving.

“People change when they talk in person. If you get people talking, you’re going to have the ability to arrive at the right decision so much quicker and so much easier.

to uncover which sustainability issues—social,or economic—that are most critical; for your business.

In the “business context,” the organizational culture is an important determinant of how members deal with customers; how members treat one another as fellow members; and how leaders and managers of the organization motivate, reward and develop members.

When companies can find the right balance within — treating one another with respect, while setting clear expectations that everyone must play his or her part — the group becomes greater than the sum of its parts.

To foster such a culture, many C.E.O.’s establish a “simple rule” for their employees: What they have to do and  what they say they are going to do.

  • Simple plan.

When you are creating a culture, you are also demonstrating your belief in what is valued —given the proper tools, objectives and leadership guidance, people can and will step up and give their best.

One of a leader’s most important roles is to boil down an organization’s many priorities and strategies into a simple plan, so that employees can remember it, internalize it and act on it. Dominic Orr, the chief executive of Aruba Networks

  • Think
  • about the words, actions, thoughts, and stuff that clarify and reinforce what your organization truly values.
  • second, understand how companies are addressing them; and third, explore what it is that your companies can identifie and further develop number of ways to improve such sustainable competitive into everyday business activities.
  • think: the value of a simple plan.
  • the big focus is on how you get people invested, so that they care about what they’re doing and feel like they have a hand in things

It sounds easy and simple, but it’s not. And if you get wrong, then you’re encouraging the wrong behaviors. But once you get it right, you see this change in people. They want to get the job done, and not just get it done but integrate processes for greater impact. Most importantly, they understand the value in a simple plan.

Get real about “what is.” What is valued? What is rewarded? What is discouraged?

This post is an excerpt from the Snippet e-book “Culture that Works: How Getting Serious About Culture Unlocks New Performance” (November 2013)

Future post – Identifying issues –  of organizational culture.

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