by Bhaskar L Kandpal, Amity Gurgaon
Over the past few decades as a result of markets and economies across the world opening up for international trade, the competition across all sectors has risen catastrophically. Organizations now find it hard to maintain competitive edge over rivals as a result of constant innovation and meeting changing tastes and requirements of customers, in an instant as a result of breakthrough innovation by rivals or failing to meet customer needs organizations can hand over edge to rivals. Also as a result of many opportunities which exist in different sectors, retention has become a major issue for organizations; poaching top talent from one another is what most organizations are after in today’s era. This and many other such factors have made it hard for organizations to sustain, survive and compete effectively, yet some organizations stand in a league of their own, not only are they growing at a fast rate, but also at the same time they have been able to maintain competitive edge rivals for long periods. The question arises that what is it that these organizations are doing right and the others aren’t?
The answer to the above question is creation of an organizational culture which fosters mutual respect, harmony, sincerity, dedication, hard work at the workplace; this is what differentiates successful organizations from the not so successful and failed ones. I would like to highlight here as an example an organization by the name of Semco Partners Brazil, the company as described by Australian ABC television news broadcaster is the most unusual workplace in the world. This because of the fact that the company does not have any set timings for work, people can come and go when they want, they can take holidays when they want, employees set their own wages/ productivity targets, employees decide who their boss is going to be, there are no designated areas for sitting, everyone has the right to participate in board meetings and voice their opinion including a lathe machine worker and so on. Looking at the above anyone would say that such a case is impossible, such a company does not exist, even if it does exist it would not survive for long, yet the reality is the company exists and has witnessed a phenomenal growth within a short span of time.
Profits have tripled and net worth of the company has increased from $5 million to well over a billion within a matter of few years, how such phenomenal growth can take place despite the company having such a liberal workplace which gives employees absolute freedom. One can easily argue that people would obviously take advantage of such freedom and over a period of time the company would collapse, yet in the case of Semco it is entirely opposite, the company not only is growing currently but also expanding its presence in different sectors. This unusual phenomenon has taken place as a result of the companies culture, the CEO of the company Ricardo Semler believes that people will work only when they want to, pressurizing them to work would eventually result in work being done, but that would be less significant in terms of delivering success as in case when people work out of their willingness. In the interview on a ABC news Australia and also in HBR archives case study he has mentioned the fact that most organizations have a military culture whereby there are set timings of work, set places where people work, hierarchies which prohibit sharing of ideas and innovation and so on. By abolishing all rules and regulations he has created a culture whereby people have developed a sense of responsibility towards work, people work in small self managed teams and cover up for one another at all times, they decide amongst themselves holidays, times of work and other related aspects, their ultimate goal is to deliver high quality services on or before time.
It is clearly evident from the above discussions that creating an organizational culture whereby employees have mutual respect for one another, they are passionate about their work and they respect what the company is doing for them, success will be delivered to organizations in the short and long run. Another example which I would like to mention over here is that of a company by the name of Zappos, the company is into online shoe retailing, the companies’ revenue have grown from $1 million in 2000 to well over $1 billion by 2008, the company was acquired by Amazon in an all stock deal worth about $1.2 billion in 2009. How can a company grow its revenues so much within a short period of time? The answer to the question has been given by Tony Hseigh (CEO, Zappos), in an interview in IBSCDC case study he has mentioned the importance of organizational culture, the company hires employees who match with their organizational culture which focuses on developing within employees the passion and zeal to go out of way in providing customer service. The company does not do any marketing; it focuses on superior customer service over it and places high emphasis on organizational culture which promotes this value in each and every employee. 70% of its customers are repeat customers and it relies on word of mouth publicity, the company was ranked no. 23 in fortunes list of 100 best companies to work for, also the company has a set of 10 core values which make its culture unique. All in all the company, its employees and CEO attribute the success of the company to its unique organizational culture.
It is evident on the basis of both the examples given, that organizational culture is indeed a powerful force that can propel organizations towards success, also in today’s competitive era it will not only ensure long term growth but also create win win situation for all (Employees, employers, customers, different stakeholders) at all times. This article has been discussed in the light of two companies which are not so big and famous, however there are other corporate giants like GE, Google and so on which have witnessed phenomenal success as a result of getting the organizational culture right, all in all to conclude I would like to mention the fact that competitive edge, mega profits, innovation and so on are all delivered to organizations by its employees, taking care of employees and making sure they are happy hence becomes the prime responsibility of organizations, organizational culture if right can be an effective tool which will ensure employees are happy, dedicated, passionate and so on about their work.
References:
https://www.youtube.com/watch?v=gJkOPxJCN1w, Interview with Ricardo Semler
Semler, R. (2004). The seven day weekend: Changing the way work works. Penguin group publishing.
Ricardo Semler & Semco SA, Thunderbird case study, Harvard Business review Archives, 1999
Designing an organizational culture: Tony Hseigh writing Zappos organizational culture?, IBSCDC case study 2009
Article authored by Bhaskar L Kandpal (Assistant Professor, Amity Business School, Gurgaon)
He has done his MBA from University of Wales Institute, Cardiff, UK, BA (Management) from University of Leeds, UK and ADBM (Gold Medal), Forbes college, London.