For anyone to be a successful athlete, one of the most important things you need is a strong core — or midsection — to provide overall stability, control and power. The same applies to growth firms. Without a strong core, the organisation risks instability as it scales up, from cultural challenges, disengagement, lack of heart and loss of focus. It becomes a case of the proverbial wheels flying off as the company speeds down the highway.
The Core provides a crucial link between the People and the organisation’s Strategy. This is especially true when the company has more than 50 to 70 employees — the size at which the senior leaders no longer know everyone’s name and where you start seeing a “culture drift”. At this point, it is of utmost importance that you codify the Core, articulate it, and reinforce it to all the people in the organisation on an ongoing basis.
There are three foundational attributes that form the Core and act as the company’s anchor. There are:
- The core values or beliefs
- The purpose
- The core competencies or strengths
Core Values are the rules and boundaries that guide the company’s culture and personality. They provide a final “Should/Shouldn’t do” test for all the decisions and behaviours by everyone in the organisation. It’s especially important that the top managers lead by example, making sure their decisions and behaviours align with the said values.
When Values are fully integrated into the company, the leadership team can move away from the endless day-to-day operational issues. The rule of operation for everyone becomes, “If you think you need to ask me permission to do something, just consult the Core Values!” Management also gets the confidence needed to delegate important tasks and can trust that the employees will know the right things to do when faced with an ethical dilemma or a decision.
If you try to change an organisation’s Core Values, you risk sending it into endless therapy, just as a parent’s efforts to force their child into a certain mould does. To illustrate this, J. Stuart Moore, the co-founder of Sapient, a global services company, shared that his biggest mistake, as Sapient scaled up, was modifying the company’s 5 Core Values so as to accommodate a major acquisition. “I believe making that change led to the subsequent challenges that we faced at Sapient,” he added. He resolved them only when the company went back to upholding its initial values.
Discerning the Core Values of your organisation is a discovery process, not just the creation of a wish-list of nice-to-have things. By approaching it similar to how archaeologists examine the artefacts of an ancient culture, our coaching process helps firms identify similar artefacts within their own company cultures and establish a starting set of Values.
Jerry I. Porras and James C. Collins’ article on the The Harvard Business Review titled “Building Your Company’s Vision,” gives a deeper analysis on core values and how to identify them.
If Core Values are the soul of an organisation, then the core Purpose, also called “mission”, gives it heart. The Purpose answers the age-old question “Why?” Why does the work we do matter? What difference is it making in the world? What would make our customers miss us if we weren’t around?
Without a Purpose that runs deeper than that of making money, employees’ enthusiasm and energy soon flows into something else and away from their job. Research finds that if you ignite and capture their hearts, not just their heads, they will give you 40% more discretionary effort.
For organizations that have a powerful Purpose, it tends to revolve around a single idea or word:
- Disney: Happiness
- 3M: Innovation
- Wal-Mart: Robin Hood
Starbucks too built their legacy on the simple idea of being an escape — a third place you want to pop in — between work and home.
Even though this central idea or word can be expanded into a phrase or two, it is most easily remembered and acted upon when it has a single idea or word at its core.
For you to determine this Purpose, get your team together and start with the question, “What do we do?”
(You might answer: “We’re a university.” “We sell sweet fresh pastry.” “We offer HR consultancy”)
Then ask “Why?” several times (a technique known as the five whys) as you try to get to a deeper level of your motivation to do what you do.
What difference do we make?
What more can we do?
Why does this matter?
Keep asking until you get to your version of “We do it to save the world,” and then back up one step and you will have arrived at your core purpose.
Understanding a company’s inherent strengths is essential. Gary Hamel and the late C.K. Prahalad labelled them Core Competencies in their groundbreaking May 1990 Harvard Business Review article titled “The Core Competence of the Corporation.”
A Core Competency has three attributes, according to Hamel and Prahalad :
- It cannot be easily imitated by competitors.
- It can be repurposed for many markets and products .
- It must benefit the end user experiences and improve the overall value of the product or service to customers.
It is important to not define your Core Competencies too narrowly. Take the case of BIC, the Paris-based company that was founded in 1945. It is known worldwide for its disposable BIC pen. Had BIC locked its Core Competency to simply making cheap pens, it wouldn’t be the 2 billion dollar firm it is today. When BIC describes its strength, it accurately states it as “making disposable plastic- anything,” which led it into making razors, lighters and other stationery products.
When Apple set out to ‘THINK DIFFERENT’, they not only focused on the personal computer but ventured into music streaming, earphones, phones among other Apple products. The baseline being that they all challenged the status quo and were revolutionary for their time.
It’s also important for an organisation to understand what it is intrinsically incapable of doing; what you would call its core weaknesses.
3M for example, has never been effective at selling directly to consumers. Instead, it has developed and capitalised on a core strength of working effectively with several distribution partners. In turn, it has divested itself from certain product lines that the market has forced into direct channels.
Your company’s Core Competencies provide the boundaries for determining what product and service offerings you should pursue. They are the foundation upon which you determine how to differentiate the company in the marketplace.
Once you clearly articulate your Core Values, Purpose, and Competencies, focus on putting them to work in creating an engaged and focused team. The organizations that enjoy enduring success have figured their core and it remains fixed even as their business practices and strategies endlessly adapt to an ever changing world.
The dynamic of preserving the core while stimulating progress is the reason that companies such as Apple, Hewlett-Packard, Johnson & Johnson, Procter & Gamble, Merck and Sony became elite institutions able to re-invent themselves and continuously achieve long-term performance.