Many startups and entrepreneurs I advise still default to growing their business via the traditional top-down, order-taking culture. I’m convinced that you can’t stay competitive that way with today’s customers, and today’s employees. It’s time to push decision making down into the organization—insisting that the people closest to the customer and the markets learn and make the decisions.
I saw strong validation for this approach in a new book, “Sense & Respond,” by Jeff Gothelf and Josh Seiden. They argue that successful organizations spend more time building and maintaining a leaning culture of listening to customers, enabling their team to make decisions, and creating new products continuously. Here are seven key elements of the culture we both espouse:
- Accept that you don’t know all the answers – show humility. Anything you or your team knows about the market today may change tomorrow. Don’t demand or assume immediate and certain answers. Foster a culture of constant dialog with customers, experimentation, and multiple pivots required to stay competitive and responsive.
- Give the team permission to fail, and learn as a result. Experiments are how we learn, but experiments, by nature, fail frequently. If failure is stigmatized, teams will take fewer and fewer risks, and your business will fall behind. Practice blameless post-mortems to honestly examine what went well, and what should not be continued.
- Foster self-direction and alignment to a greater mission. If your mission is clear, and the organization is aligned around it, self-direction takes root and delivers superior solutions. Team members will want to take personal responsibility for quality, creativity, collaboration, and learning. You just provide the environment and support for success.
- Promote the honest sharing of information – good or bad. Never shoot the messenger of bad news. Don’t forget to listen carefully to the total message before responding. Ask questions without undue emotion, and always focus on the positive or possible solutions. No one learns from no communication, or misrepresentation of data.
- Practice a bias toward action – not analysis paralysis. Constant debates and re-analysis of data are the enemy in a fast-moving and competitive marketplace. A thriving process culture today assumes that you will be making many small decisions, seeking feedback, evaluating the evidence, and then deciding once again how to move forward.
- Define customer value as the only path to business value. Customer empathy is required today to maintain a strong market position in the face of global competition. Everyone from the CEO to call-center representatives must have a sense of what your customers are trying to achieve, what’s getting in their way, and how you can help them.
- Build a team culture of collaboration, diversity, and trust. The best learning teams are smaller, diverse, and work in short, iterative cycles. There is no time today for lengthy, sequential work with hand-offs between specialists. People with different points of view, who trust each other due to social ties, collaborate well to positive results.
With these culture elements, organizations today are emerging and thriving, based on their improved capacity to sense and respond instantly to customer and employee behaviors. The alternative is another Eastman Kodak, who failed to keep up with the transition from film to digital cameras, or another Blockbuster Video, overrun by Netflix and streaming videos on the Internet.
More successful examples include Facebook, which continues to change and lead today, despite assaults from Twitter, Instagram, and others; and Tesla Motors, still leading the electric car market, despite repeated initiatives from the major auto manufacturers and other upstarts. We will soon see if they can hold that lead in the coming era of totally autonomous vehicles.
These winners, and almost every successful new startup, have successfully established a learning culture that customers, as well as employees, are flocking toward. But a cultural transformation doesn’t happen by default; it must be led, even though employees and customers want to work in the new way. Are you an active agent of this change in your company, or a continuing obstacle?