Over to you.
Cliff Chalon 0:03
Thank you, Lorraine. Great to be here, everybody. And thanks for taking the time to give me the opportunity to share some interesting information with you.
Cliff Chalon 0:12
As you well know, we’ve entered an era that no one was expecting or wanted, in any way shape or form. It was tough enough before in what was called a VUCA world, you know, volatility, uncertainty, complexity ambiguity into now that has challenges in in terms of severe crisis.
Cliff Chalon 0:34
In looking at the literature that abounds in this area, now, there’s no shortage of people writing about this space. Most trying to make sense of it, some trying to work out how do we pivot and adapt?
Cliff Chalon 0:47
Some interesting words coming out there. In a couple of articles that caught my eye from Harvard Business Review, and a couple other consulting firms, they’re saying, well, we were already shaping for industrial revolution 4.0, which is all about AI and the digital space, all that’s happened is that that’s been accelerated now, particularly in the digital online space.
Cliff Chalon 1:13
And who can argue with that. The very fact that we’re having this conversation here, instead of face to face on in a room tells you that that’s definitely occurring. So that acceleration of making things digital, more digital, more simple, is going to continue a pace in some people are predicting, I think, rightly, that there will be a blend of that activity with the norm as the new normal emerges. Of course, what’s missing there is we don’t know what the new normal is. We’re still in that transition period.
Cliff Chalon 1:49
But the best company, companies in my mind, in my view, are using this quiet time… I was interested to hear some of you comment about using this time ‘to reflect, to take the time, permission, give yourself some space to do things a little differently.’ Because if you think about it, if we’re going to do more digital and more simple, everybody knows that. And everybody’s doing that. So how do we stand out.
Cliff Chalon 2:22
And that’s where the better companies are positioning themselves. Two iconic companies whose names will pop up in a few moments, did that in a recession around the mid 1970s. And they are literally household names now doing wonderfully well.
Cliff Chalon 2:44
But they emerged out of a crisis stronger and better they went into it. And that’s the sort of positioning that I’m talking about here. So if you’ll bear with me, I’ll just go through a few slides and we can have some interaction. If you have questions. I’m happy to take them along the way, or certainly at the end.
So if I can just stop you, if someone does have any questions going through, you can either just physically raise your hand or there’s a little button down below called reactions on your meeting controls. And you can actually put up a hand there.
And, or you can type into the chat, whichever is your preference. And with regards to raising your hand, or I’ll keep I’ll monitor the chat, and then I can come back to you. Sorry, I’m interrupting your flow.
Cliff Chalon 3:28
Not at all. Thank you for that. All right. So here’s some bullet points that I want to use to position that as a roadmap for this session, we’ll talk about largely in terms about positioning. But we won’t lose the fact that we’re talking about positioning in a very real way that is not to position to pivot or adapt, but to position to be even better than that. And better for me, I categorised as World-class performance.
Cliff Chalon 3:58
So we look at that, we look at the notion about, in its current crisis, how do we see opportunity, how to identify the opportunity, but also how to identify how to position to best take up the opportunities as they present themselves.
Cliff Chalon 4:12
And I’ve crafted a little bit of a framework for you to act as a takeaway from this session, hopefully, that’ll give you some clues as to what to do to position for the new normal.
Cliff Chalon 4:26
A little bit of interaction for you. How many of you can buddy up the name of the CEO or co founder to these iconic companies?
Cliff Chalon 4:38
I’ll just give you a few minutes. You don’t it’s rhetorical. You don’t have to actually physically shout out or you can if you want to.
Cliff Chalon 4:47
But they are household names are iconic. And two of them emerged out of the crisis better and stronger, see if we can pick that as well.
Cliff Chalon 4:59
Okay, Everybody ready?
Cliff Chalon 5:05
Okay, so here they are. Did everyone get them right? Jeff Bezos, of course with the tiny little company called Amazon. Steve Jobs with Apple, Akio Toyoda is the grandson of the great Mr. Toyoda. Richard Branson, of course Virgin, Elon Musk Tesla.
Cliff Chalon 5:25
Ingvar Kamprad from IKEA. Eric Yuan, whose platform we are using right now. Zoom, Reed Hastings from Netflix and Guy de la Liberte, who was the founder and creator of Cirque du Soleil.
Cliff Chalon 5:45
The two companies anyone want to guess? Just very quickly, rhetorically, the two companies that emerged out of crisis even better than they went in. Yes, Mark.
Netflix and Zoom.
Cliff Chalon 6:00
Zoom, to some extent was actually Apple back in the day hit a couple of hurdles and caused them some serious crisis. Both of those did far better out of the crisis than when they went in.
Cliff Chalon 6:17
But no one could argue that Zoom has done incredibly well particularly out of this crisis. So well done everybody. But the last name you see it’s in red there. Who is this guy? Anyone know? What his company? What’s his claim to fame?
Cliff Chalon 6:36
Obviously, you can see by the name there, Tadashi Yanai is a Japanese billionaire. He is the richest man in Japan. And with a personal worth, I think of around about 25 billion US.
Cliff Chalon 6:53
Bit of a recluse you it’s not surprising that you don’t know much about him. But the interesting thing for this guy is that he kept plugging away at doing business as he says, We’re just going about our normal business, doing what we have to do as a company, whether it’s in Japan or London, and we follow this principle all over the world.
Cliff Chalon 7:16
So, in effect, these best practice companies best in class World-class companies simply go on doing what they are convicted to do. They’re they have tremendous courage and convictions about their idea, their purpose, and tremendous clarity around it, and they build systems around it.
Cliff Chalon 7:37
And as a result, that dogged pursuit of what they’re in the game for, is what eventually realises success for them, not only locally, but across the globe. And looking at those companies, you can see not one of them has not met that benchmark.
Cliff Chalon 7:57
Intriguing. So the question becomes, should we then all aim for this and can we by… my short answer is yes, every single one of your companies can be a World-class company. You could well be the next Apple, I don’t know. or Netflix. Why not? And that’s the World-class question not why but why not?
Cliff Chalon 8:24
But just think about for a moment, what does it take, why do we want to have this sort of acclaim? Well, there is tremendous value. Have a look at this.
Cliff Chalon 8:34
Companies with World-class performance, generate four times, sorry, 2.4 times to three year equity market returns, as compared with typical companies in their industry. They delivered this better performance with 57% lower staff numbers than their current two paths. So they operate lean and mean but they get the result.
Cliff Chalon 9:07
Thirdly, many of these have risen from the very bottom 10% of those in their field to the very top 10% within a single business cycle characterised by McKinsey as approximately 10 years. And the last bit, these companies build such momentum, which is a word that’s been used, most recently by Simon Sinek. In his latest book, infinity.
Cliff Chalon 9:39
They create this momentum through capability and culture, and that’s what helps them to sustain no secrets. People are they have now long followed this path. But I guess we’ve not been watching that space too carefully.
Cliff Chalon 9:58
And for some reason, we didn’t codifies, here’s my attempt then, to codify what that might look like, by way of what is it that’s so special about them? And how can we emulate that? How can we all be truly World-class performance?
Cliff Chalon 10:18
Firstly, they have clarity on their, on their purposes son and Simon Sinek says start with your why. Now this is for the greater good type thing. So they know why they’re in business for the longer term. They have clarity on their know how, which is their core capability.
Cliff Chalon 10:34
They have clarity on their deliverables, which is of course their products and services, what they will do what they won’t do. They have clarity on their values. Chief among those I’ve noticed is things like respect and integrity. clarity on key metrics they measure to the nth degree and they achieve consistently as a result
Cliff Chalon 11:00
And the last part for me was particularly useful was that they all have a very, very strong focus and bent on clarity on their culture, which of course helps them to sustain their World-class performance, time, after time.
Cliff Chalon 11:19
One thing that emerged as the hallmark of all of these companies, not necessarily a feature, but something that stamps them as a breed apart was this notion. See if you agree that with me it’s almost the secret sauce if you like.
Cliff Chalon 11:36
These companies don’t try to beat the competition. They work hard to beat themselves. And by beating themselves by getting better and better at what they do, they eventually outpace their competition. interesting observation, don’t you think?
Cliff Chalon 11:58
But it’s true. If you look at all of those iconic companies we’ve talked about before, every one of them, there’s this hallmark of success. They don’t try to beat the competition.
Cliff Chalon 12:10
They work hard to beat themselves. And we’ll see more about this as we talk about how to position ourselves. And it’s particularly instructive, I should think, for people like you in your premium capacity and D 32. But let’s, for a moment, look back on this notion of World-class performance.
Cliff Chalon 12:35
Here I’ve taken a little bit of a liberal view, instead of saying it’s about being the best it’s about being in that space, if you like. So to be world class, firstly, if you strip away world class, if you look at the word ‘world’ it’s about being the best in your world.
Cliff Chalon 12:59
It’s true that some were set up to be the best in the world, most of them just try to be the best they can be in their locality. And that could be in their province, it could be in their district. It could be in their state as it is here in Western Australia for us, or it could be Australia. That’s their world.
Cliff Chalon 13:22
So when we say World-class, we’re not necessarily saying the whole world. It’s your world here. That’s important. So one way of looking at how can I be world class or have world class dominance is to define the world that you’re going to compete in. And the next bit then, is how can I be top 10 or top 10% in that space, in that world?
Cliff Chalon 13:50
So the question you ask yourself is we’ve got a great business, but could we say hand on heart be in the top 10 in our game, in our locality, you know, our world. On the top 10% you see top 10% people often say well, is that really true. Would that give me World-class acclaim?
Cliff Chalon 14:12
Would that put me in that category? Well think about it this way, at the Australian Open tennis tournament, the top 100 players gather, go to the 100th player and tell him he’s not World-class and see what reaction you get.
Cliff Chalon 14:27
They are in that space. Keiren Perkins was the 8th fastest in the 1500 in one of the Olympics, and got up and won the event, Steven Hooper in speed-skating and several others, but just by being in that space, you too can have your moment in the sun.
Cliff Chalon 14:48
So top 10 or top 10% is a great place to be and at that point, you can claim quite rightly that you are World-class. So the idea then is to focus with abundant clarity on that space and power up your culture to get there.
Cliff Chalon 15:10
With the clients that I have, this is some of the tooling that I use to get them up to thinking about how to position themselves for World-class performance on a sustaining basis. I mentioned before that I work a lot with people and culture.
Cliff Chalon 15:30
That’s where we start. That’s where we help them to build whatever is necessary. But we start by examining the existing culture and I’ll share more about this point as we go along. But the usual chestnuts, strategic planning, as Lorraine mentioned before, I think Paul too dabbles in that space – absolutely essential.
Cliff Chalon 15:51
That’s how you work out your purpose. your reason for being your strategic competitive advantage. And so on. And then of course, you’ve got to change things that brings about this notion of change management, you’ve got to have the right product mix, products and services mix.
Cliff Chalon 16:12
All of those things in that will get you there. That’s good. But the question becomes, is that good enough in the current era? Does that help with positioning for World Class, in this crisis and beyond so that we can emerge better and stronger, then we went in?
Cliff Chalon 16:33
Well, maybe not. One of the things we definitely have to look at, and there’s a bit of literature around us around now, particularly from Harvard, where they say the one good thing caused by COVID-19 is an emphasis on innovation. So part of positioning, if you like, is about how to gear up to be more innovative.
Cliff Chalon 17:01
In some way, do something quite different that no one’s expecting us to do. Remember, everyone is going more digital and more simple. How do you stand out, that’s got to take some innovation. And that’s the space that you want to be playing it, or at least thinking about in the near term.
Cliff Chalon 17:24
If we look at the diffusion of innovation curve here, you’d see that the best innovators are at the leading edge, there’s only a few of them 2.5%. So you’re playing once you start going into innovation, you’re playing in a very, very restricted or small space.
Cliff Chalon 17:43
So it is possible that as you emerge out of that space with some great innovation, product/service, you’d be the only player in it. And that’s a good place to be it shoots you right up to be a category of one and you’re definitely World-class, no matter what your domain.
Cliff Chalon 18:00
And then of course, if you’re not quite there, you missed the boat to be innovative, but you’re able to adapt very quickly that puts you into early adopters where that two is a relatively small group. You certainly don’t want to be a premium player in any of these other categories, early majority, late majority and definitely not in the leg arts space. Not a happy place to be.
Cliff Chalon 18:24
You want to be at the other end or left side and preferably, as I said, positioning yourself to be an innovator. So the question becomes, how do we maintain World-class performance, which was our domain when we went into this crisis, with a significant innovation, something that’s never been done before?
Cliff Chalon 18:45
That’s something worth contemplating. As we do that, and that becomes our focus, at least that’s what I’m positioning for here, or proffering. It’s that focus on being innovative and being World-class at the same time is your focus point.
Cliff Chalon 19:09
And it is possible, as Napoleon Hill tells us what the mind can conceive and believe it can achieve. But this begs the question, doesn’t it? What should you do now? What can you do now, to get into that space to occupy it fully, to the extent that it needs to be so that you can craft something that’s worthwhile? And that’s going to give you truly a World-class performance, which can be sustained over time. As you ponder that question, though, have a look at some of the information that I will share with you shortly
I’ve got a question from the class?? Mark has asked, around the innovation and thought about myself. or it’s about making physical change or both.
Cliff Chalon 20:04
It’s both. It’s both. But I like your question there, Mark, because you’re already intimating what is going to come up as the way in which you take up some levers, if you like that will allow you to innovate and take up the opportunities in this space.
Cliff Chalon 20:26
So you’re already on the right train of thought well done. So what should you do? What can you do? How do we get into this? Is it difficult? Is it something that we shouldn’t even bother with? Just go back to our spring back?
Cliff Chalon 20:43
Sorry. I think the the terminology is this just snap back to where things were before COVID. What I’m asking you now is, it’s not just snap back in some respects, but also to spring forward in a way that renders the competition there, negligible.
Cliff Chalon 21:02
Let’s have a look at that. Can you all see this clearly, in studying the literature, in looking at those companies that have had the success, over several crises, certainly in the mid 70s, that that’s been written about in the post GFC period, or in crises that were created by simply a significant loss of market share.
Cliff Chalon 21:33
You look at the McDonald’s example and how they clawed their way back in the early 80s, when things were going astray for them with the health food or health conscious offerings that were coming off that were being offered just as fast but it was health.
Cliff Chalon 21:51
It was healthy for people. So McDonald’s had to grapple with that and take on some waves of this world and did that very successfully, but they also did Other things, which then launched them back into World Class dominance, world class performance in a way that’s still being sustainable for them, even in the current market.
Cliff Chalon 22:13
So what does it take? To my mind, it’s about three shifts. The first is Paul; you were right on the money with it – will take a mindset shift. I’ll explain more about that in a moment. It will also take a paradigm shift. And thirdly, it will take a culture shift.
Cliff Chalon 22:40
All three working in tandem will grant you some way of positioning yourself in a very real and material fashion, to be able to innovate beyond what your competitors are doing right now and take you into a world class dominance. If you like. Let’s have a look at these in turn.
Cliff Chalon 23:02
Firstly, mindset. As you all know from Carol Dweck, thinking and wonderful treaties on mindset. It’s about getting away from a fixed mindset to a growth mindset. In a lot of ways, it’s how we have thought or how we’ve been conditioned to think that is that is that is flawed and that leads to change. Intelligence where we say things like intelligence are static.
Cliff Chalon 23:36
We avoid challenges we give up easily due to obstacles, we see effort as fruitless. Whereas if you have a growth mindset, you say intelligence can be developed, and it leads to a desire to learn and develop. It embraces challenges and persists despite this optical obstacles.
Cliff Chalon 23:55
And the effort that you put in is seen as the pathway towards mastery. So that even mistakes that come about when you venture into this space are accepted as a good thing, because that’s how we grow and develop.
Cliff Chalon 24:16
Where in the fixed mindset, we may ignore useful feedback. But in the growth mindset, it says that we learn from criticism, and we can be inspired by others success rather than be threatened by it. So that’s taking then that mindset shift that you need to do.
Cliff Chalon 24:36
We learn to hear our fixed mindset voice because it is a voice that tends to go off in your mind saying you can’t do this. You can’t do that. I think the great Henry Ford was the original mindset thinker, wasn’t he?
Cliff Chalon 24:50
When he said, If you think you can, or you think you can’t, you are absolutely right. The only person stopping you is you. So you have to learn to recognise that you have a choice. Talk back to the growth mindset voice and take the growth mindset. Take the growth mindset action.
Cliff Chalon 25:15
The second point that I made about the second shift was that that of a paradigm. A paradigm is nothing more than a set of rules and regulations that does two things. It establishes and defines boundaries, and it tells you how to behave inside those boundaries.
Cliff Chalon 25:33
So when we innovate and we take something new to market, what we’re doing is basically redrawing the boundaries, taking it out further than currently exists, and learning to behave then in that new boundary. a paradigm shift is a change to the game, a new set of rules.
Cliff Chalon 25:56
There’s no doubt that this current crisis has put a lot of people into that space where they’ve got to look at a game changer, simply to come back to do a business. And that change is regarded as a paradigm shift.
Cliff Chalon 26:18
A change to the game where there’s a new set of rules. There are lots of paradigm shifts that have occurred. Here’s a few that I picked up from the year 2000 to the present. Space Shuttle Total Quality cellphones pages, Fall of Soviet Union, the birth of the internet and the Internet of Things.
Cliff Chalon 26:42
Super disruptors like Amazon, Uber, Airbnb, Tesla, Netflix and many others. And of course, we’re at the point now in crisis with some of the better players are definitely looking at what is the next disrupter and it could even be in your business.
Cliff Chalon 27:02
So the question becomes how do we position for that? How can we reinvent things and do things differently? It may just be something that represents a paradigm shift. And here’s something that you may want to do about that right now. Ask yourself the paradigm shift question.
Cliff Chalon 27:27
What today is impossible to do in your business, but if it could be done, would lift your business to World-class performance level and sustain it? That is a paradigm shift question. You look at something that you’re that’s not being done by any one of your competitors in your space, in your locality in your world.
Cliff Chalon 27:51
And you ask yourself, think about this hard and you say, that may be impossible right now, but if it could be done Could it be done? And how then can I take that lead and lift my business to World-class performance level?
Cliff Chalon 28:12
So the question again, what today is impossible to do in your business, but if it could be done, would lift your bills business to World Class performance level. And that’s great, you now are positioned by your mindset. And you’re now looking at something that is truly innovative.
Cliff Chalon 28:34
And this then brings me to the third point, which is how do we sustain that. We don’t just want to have fleeting market share or leading category of one position, we want to stay there. The only way you’re going to do that is to develop your culture.
Cliff Chalon 28:57
So if you look at the way Amazon is doing They’re asking these what if questions in a very real and compelling way that they know if they can steal that advantage? It will keep them there at the leading edge of their world, which as we know, is all things online.
Cliff Chalon 29:18
They’re asking and this is a real Amazon question they’re asking right now. What if you could predict customer behavior? And they engaged in thinking of ways to quickly answer customers needs by predicting them.
Cliff Chalon 29:35
They have patented a system for predictive logistics based on buying trends, your searchers, and regional data, they sent products to warehouses close to you, even before you think buying them.
Cliff Chalon 29:51
Isn’t that interesting? Little scary, I know. But nevertheless, that’s that’s the sort of paradigm shift thinking was Talking about here. So they taking online level, online business to a whole new level again.
Cliff Chalon 30:09
And that to me is classic paradigm shift thinking. What they’ve done…
There is a comment from Mark. It’s a very thought provoking question
Cliff Chalon 30:23
Which one? This one?
Cliff Chalon 30:25
Yes, exactly. So incredibly thought provoking and they are serious about it. They’ve a think tanks working on this as we speak, and something will emerge if it hasn’t merged already. So that’s a paradigm shift in action, if you like.
Cliff Chalon 30:43
So what will lock all this in when let’s say you devise your innovative product or service, what will lock it in? Well, this is where culture plays a very, very strong part.
Cliff Chalon 30:56
Culture is key. It’s critical. You can’t not do it. You can’t get to World-class level and stay there without it. In a recent survey conducted by the Fuqua School of Business, they found that 90% of senior executives will say that their culture is important. 92% said they believed improving their corporate culture would improve company value.
Cliff Chalon 31:24
More than 50% said corporate culture influences productivity, creativity, profitability, company value and growth rates and the innovation that I was speaking about earlier. They they have pondered this question quite a bit, and worked out that we need to define culture, in other words, in a very real and specific way, so that we can get a very, very strong handle on it and be able to harness it as best we can to make a real difference down the track.
Cliff Chalon 32:03
Here’s some ways in which culture has been expressed recently. The most, probably arguably the most common one is the way we do things around here.
Cliff Chalon 32:14
My personal guru, the father of organizational culture says it’s a pattern of shared a set of basic assumptions learned by a group as it solves its problems of external adaptation and internal integration.
Cliff Chalon 32:27
But when you boil it all down, what is it really even saying that it’s the way we do things around here isn’t specific enough to be able to understand it deeply enough to be able to move with it, change it if it needs to change and to help it evolve in the best way possible. So we sustain our World-class performance.
Cliff Chalon 32:49
Here’s a way that I would characterise culture. Culture is nothing more in my view, than a pattern of sustained behaviour and practices. So if you look at it for anything that you do if it has been sustained over time as a behaviour or as a practice, then that’s part of your culture.
Speaker 3 33:22
If we take something as simple as service, let’s talk about an iconic company that does this really, really well. Singapore Airlines, anyone, anyone travel with Singapore Airlines. You’ve noticed that they even without telling you they have a the hallmark of their success would be the consistency of their service.
Cliff Chalon 33:48
It’s part of their culture. So the way in which they deal with you. So when you first board, help with your luggage, the way in which you’re dealt with as a person, they make you feel as though you’re the only person on the plane.
Cliff Chalon 34:07
And that is more than just the behaviour of one or two persons who just happen to be very service-oriented. That’s trained in the way they serve you, your meal or your drink. It’s a behaviour that epitomises every single steward that you come across. It’s Singapore Airlines, but it’s also a practice. It’s systemised and therefore trained and embedded.
Cliff Chalon 34:33
So there you go. Anything that’s sustained behaviour, and practices are what’s underpinning your culture. So if we’ve got a handle on that, and we know that, you know, we need to move on that. Many people are saying yes, we need to move into this space. We need to work with our current culture.
Cliff Chalon 34:58
An interesting stat for me was only 15% of senior executives say that their firm’s culture was where it needed to be. So clearly, there’s some work to be done in this space. Even though it’s the third point quite often I advise clients to start first with, where is your culture? Now?
Cliff Chalon 35:19
What does your existing culture look like? Will it be supportive of your efforts to be world class and to innovate? That’s not the case, then even the best strategies can implode. And that’s not a good place to be.
Now Cliff, Peter has just asked, you know, from that last slide, when you were talking about it was actually the one before but it was about the high percentage of company and see yours who said that, you know, yeah, that’s why we believe improving the culture would improve the company value, and how many people how many of those CEOs actually go on to implement the change to create the culture you know, and what was In the gap between knowing and doing,
Cliff Chalon 36:02
Yes, and I think this latter slide gives you the answer. So they’re, they’re all saying that yes, it’s important. It’s started with about 30%, roughly getting into that space and trying to do something in 2018.
Cliff Chalon 36:20
It was around 80%. But for me, the telling stat is only 50% that said that the firm’s culture was where it needed to be. And we don’t know how many of these people are actually actively working in this space.
Cliff Chalon 36:35
Certainly, in certain sectors, there seems to be more action in this space than in many other sectors. But the other industries, people are just focusing on product service strategies, just marketing efforts, which is fine. But unfortunately, the letdown in their culture is when they start to sustain those practices, they may achieve higher results in the short term, but it’s not sustained because their culture wasn’t right to start with.
Cliff Chalon 37:13
So, if you’re looking at those CEOs that tested out as 90 odd percent. Short answer is – we don’t know how many of them are clearly moving actively to fix their culture. We just know that the sentiment is there, that they acknowledge there’s an issue, and they do need to work on it.
Cliff Chalon 37:36
But by and large, there’s a far greater acceptance now that culture has a material benefit to the long term value of the firm. So there are many, many more people doing it now than who are not doing it, as the 80% in 2018 attests.
Cliff Chalon 37:55
And one can only imagine that they’re doing this now, in this space as better companies anyway. If you look at Nokia, for example, there’s one case study I can give you. If you all listen, there’s a good question. Could you all please take out your Nokia device?
Cliff Chalon 38:17
Yes, no, it’s not a trick question. So at one stage, we’d all flip out the old Nokia phone. But of course, Nokia in recent times has drifted right away. What they’ve done is gone into the hardware space, they recently purchased a French company to help them to do that.
Cliff Chalon 38:37
And so the repositioning if you like, for World-class performance, not so much in cell phone technology, like they were, but in a whole new transformed industry, which is the hardware side of technology. I just say watch this space.
Cliff Chalon 38:56
The interesting for me, when I observed, when I read that case study, is that before they started on the actual technology, objectives that they had to address to get them into that space.
Cliff Chalon 39:15
They took two years to look at their existing culture, measure it to the nth degree, very granular, to see how they might best position, their current culture to be able to take on this major transformation that they’re going through right now, which is something they didn’t do before.
Cliff Chalon 39:38
So one can imagine then that they learned that their their lesson from going into cell phone technology and then getting beaten because their culture couldn’t sustain it. Others came into that space. This time, they’re going at it from the ground up, and that’s what I’ve depicted in this model here.
Cliff Chalon 39:56
Remember, any lever that you press whether it be in Performance, in systems such as Lean Six Sigma, or they’ve reviewed strategy, or some major change, some innovation or… in fact, marshalling it through leadership and teamwork, whatever the lever to is that you that you try to manipulate for better performance, it is underpinned by culture. It’s an inescapable fact.
Cliff Chalon 40:24
Without culture, whilst you may get some short term benefit, it will not sustain and that’s not the lesson here.
Cliff 15% just said are happy with culture. Does that mean it puts them in the top 15% of World Class performance?
Cliff Chalon 40:45
Um, that, um, the 15% was saying that, yes, they are working on it. It’s so culture is a work in progress. At any time, but they’re the ones saying yes, we have a very strong handle on what our culture is currently, we know it’s sustaining what we want to achieve in the way of objectives.
Cliff Chalon 41:10
But no one can say it’s completely done. You can never say culture is completely evolved, has nothing more to do. It’s a constant work in progress. But these 15% are saying yes, we have got to a point where we can say hand on heart, our culture is where it needs to be. So not sure if that was answering the question. But yes, those 15% are in a better position than some of the others.
Cliff Chalon 41:46
This then implies that to get a handle on culture, you’ve got to measure it. Here’s something about measurement from the wonderful Denison and based in Michigan in the US, they have this tool called the DOCS. It’s an organisational culture tool where you can measure culture.
Cliff Chalon 42:03
And indeed, some of the world’s best companies iconic companies like GE, IKEA, are using this tool right now, annually, at least annually. And they’re measuring their culture to the degree where they can see on 12 proven indices where their performance lies.
Cliff Chalon 42:25
And it’s been proven time after time, in several instances, that those with average culture scores in the bottom half of the circumference circumference do not do well over time, in terms of the major indications such as shareholder value, profit, and so on.
Cliff Chalon 42:48
Whereas those that test out as having more colour, and that is higher scores of at least 70% above. They’re the ones who market who most consistently perform So the Dennison tool gives us two things.
Cliff Chalon 43:02
Firstly, a way to measure the key elements of culture that are going to help us to sustain our business over time. And secondly, to see where we are in relation to other high performing companies because the database This is about the norm databases about 1000 high performing companies.
Cliff Chalon 43:25
So you’re comparing yourself to them. And the scores reflect whether you’re slightly better or slightly worse off than they are, but it’s a good indicator. For those that are in the higher echelons of the scoring system.
Cliff Chalon 43:41
You’re getting something like 2.5% sorry, 2.5 times greater EBIT and five times greater sales growth. So some real performance indicators being achieved as a result of having strong cultures What we also noticed is that these people have high levels of clarity and alignment.
Cliff Chalon 44:04
And we know that the six features of World-class performance is all about that clarity, which I showed you earlier. If you have average levels of performance, it’s because it’s likely to be a mix of clarity and confusion.
Cliff Chalon 44:19
And if you have some poor levels of performance, it’s because confusion and uncertainty is likely reigning supreme. They’re so useful to measure your culture useful to get a good snapshot on it. The value of a culture cannot be understated in a major study, conducted way back in 1992, and it’s been proven to be the case even in recent times, is that you can achieve growth revenue growth levels are four times 750% sorry, 750 times profit growth.
Cliff Chalon 44:57
So these are real figures. From about 250 companies that were in the test case, McKinsey’s recent studies show that those with top quarter cut cultures post return to shareholders 60% higher than median companies and 200% higher than those in the bottom quarter real data from real companies real achievement.
Cliff Chalon 45:26
And that’s what’s showing you the value of a strong performance culture. So in effect, then, we can get to World-class performance. it’s achievable within your world as you define it. If you adopt that clarity around the key concepts we’ve been sharing with you, this current crisis, gives you time, space and some permission even to take up some of these opportunities that maybe you’ve been thinking about but didn’t do much about
Cliff Chalon 46:00
Ask yourself that paradigm question. What today in your business is impossible to do but if it could be done, would lift you to that world class category and with your support of culture can keep you there. It’s one of the three shifts required to position for the new normal.
Cliff Chalon 46:19
Culture is incredibly powerful and crucial to your success. And if we can apply these three shifts to deliver innovation and world class performance, that’s achievable. It’s no longer unachievable, elusive. In a way I’ve just looked at codifying this, so that it can be done.
Cliff Chalon 46:46
As Napoleon says, what the mind can conceive, it can achieve. I’ll leave it there. But there’s a couple of things I want to share with you and that is as a special offer. To learn a bit about how this works in some form, if you go to the website, you can have access to a free GPS tool which will start you on the journey of three months.
Cliff Chalon 47:13
Sorry, three shifts that I talked about mindset, paradigm and culture. You get a free debrief. But there’s also, and this is something I’m personally quite proud of, you can get a copy of the book. Just opt-in on the website. I’ll happily send it to you.
Cliff Chalon 47:36
That’s it for me. Thanks again to Lorraine, for the opportunity to present to you thanks, I hope you guys enjoyed it. If there are any questions, I’m happy to take them now.
Yeah, I think we can just everybody can just unmute themselves if anyone’s got questions that I think I mean, thank you very much. That’s the one thing that is not being discussed widely at the minute is using culture for innovation, and getting ahead at the minute.
So it’s it’s not something I’ve been focused on. It’s not something I’ve been hearing people talk about. So it’s really refreshing. And to talk about that this time, and to ask yourself some serious questions about culture and moving forward. Does anyone have any questions? And for Cliff on you go, Mark.
Cliff. Thank you. That was really interesting. And I’m actually interested in how you would go about working out where your culture sits at the moment. And where do you want to take it to like, how do you have some sort of system that you would work with and say, Okay, here’s where we are, or a measuring stick that say, here’s where we are. And here’s where we want to be.
Cliff Chalon 48:44
Yes, absolutely. So, going back to the, the slide that I showed you before on the DOCS, going back 30 years now, Mark, Dr. Dan Denison took a whole group of company’s high performing low performing, and did some extensive studies on what are the key indicators or indices as he calls them that become the hallmarks of their success or otherwise.
Cliff Chalon 49:12
And it turned out that these 12 factors were consistently in evidence in those case studies. And this was literally thousands of companies more than 2000 over 10 years. So it was improving empirically, that if we had good scores in these dimensions, in these 12 sectors, as you can see, they’re split up in into quadrants.
Cliff Chalon 49:38
So there’s a strategy or mission quadrant, there’s the systems or consistency quadrant, there’s involvement or people quadrant, and there’s the adaptability or change quadrant. All things that the average business would get into would need to be would need to have in good order to get even a reasonable level of performance.
Cliff Chalon 49:57
But if you’re looking at high performance, The higher the scores the more colour in the circumference the better. So, he then dropped out a organisation culture tool, which can then be used in any company to measure their current culture.
Cliff Chalon 50:19
Display disposition in terms of the scores for each of those dimensions. So, a it can be your culture can be measured B it gives you a core score relative to remembers the norm databases, those thousand companies that whose data has been fed in into the, the, the rating system to give you a relative score, plus or minus in relation to those, those thousand people.
Cliff Chalon 50:54
So, and these are 1000 odd, I think there’s 1084 currently 1000 odd, high performing companies who themselves may be slightly down on something slightly higher than in some other things. And what they give you is a relative score in relation to where they’re tracking. So you’ve got, if you like a norm database of World Class companies that you’re measuring yourself against.
Unknown Speaker 51:23
So Cliff, is that actually do you actually measure these 12? emphases on the tool that you are offering at the end there?
Unknown Speaker 51:28
Yes. Sorry. Not not the toward the end. This is quite a sophisticated tool, as you know, as you would imagine, so yes, I’m offering this but the tool that I’m offering right now on the free on the free service for you, is just a bit of a sense of where your business is out right now.
Cliff Chalon 51:47
And that’s totally free. That comes from a different provider, research partner, which you’ll be familiar with Lorraine Cohen mind shop. Yeah. wonderful people. And they’ve worked out a way not so much to
Cliff Chalon 52:00
As cultural but just to test your business parameters such as they might be, to give you a sense, what I’m saying is you could do that have a bit of a sense. And then through that you may get some indications that your culture may not be supportive in the way that we’ve just talked about it.
Cliff Chalon 52:15
And if that’s the case, we can then go deeper using the docs. Does that make sense? Thank you. Doc’s incredibly powerful.
Paul, you’ve got a question.
Cliff Chalon 52:26
Thanks. Really interesting. Oh, just a quick question of what’s on the screen there. adaptability, mission consistency involvement. I get that. But your will maybe slide number four is I mean, which put all the disruptive companies up on the screen there?
Cliff Chalon 52:44
And they would have had, I want to say a culture of innovation. Because that’s exactly what they did. That sort of got innovated and filled. It’s another household name is the is that culture of innovation, some company Because I’ve done all of those or is there actually another, another league where, you know, disruptive companies actually look for people that are going to have wild ideas? I’m trying to implement something different.
Cliff Chalon 53:12
Yes, I guess it’s the perspective that you take on innovation. It’s a benefit and outcome. If you’re like something becomes innovative in the way that it’s been introduced to the market. What they’re looking at is and where the culture part comes in is that your your culture then supports a the ability to get to innovation, and be to sustain it.
Cliff Chalon 53:39
So what these companies do is not it’s not an either or thing. While they’re being innovative. The first thing they’re doing is, is examining whether they’ve got a culture that will enable them to be innovative.
Cliff Chalon 53:52
There are many holdups within culture within these indices here, which may not help you when you’re trying to enter If you look at, for example, empowerment or the capability or even the organisational learning in the index, if some of those is off off the mark, you’re not going to get the innovative result you’re seeking.
Cliff Chalon 54:19
So what they’re looking at is it’s not necessarily an either or thing, but it is primer, primer of prima facie something that should be done before. So just like the Nokia example, what they do is is saying, you say yes, we need to be innovative in the space we want to occupy.
Cliff Chalon 54:39
But before we do that, we’re going to do that with a community of people from disparate backgrounds from global locations, we need to know that they’re all signing up, if you’re like, to the culture that we want to adopt, and the only way way to do that is get a sense of where it’s at now on these dimensions and move towards that, with strategies and actions that will help them to move to higher scores in each of these indicators. Does that make sense, Paul?
Cliff Chalon 55:16
So, so in other words, they’re already working on, not so much wobble, get them there, but what will help them to sustain? So, in some cases, it’s actually relatively easy to invent something.
Cliff Chalon 55:30
It’s much harder to sustain the level of performance once it’s already out there. The only way you can do that, organisationally, especially with larger organisations, global organisations, and even smaller ones, like the ones that you are familiar with, the only way to sustain that is true your culture.
Cliff Chalon 55:51
And as little as five to 10 people can make up a culture. It’s a collective, isn’t it? Five or 10 people can either take you in Massive way towards where you’re going. Or they can sabotage all your efforts and have everything implode around you. That collective power is quite enormous.
Thank you very much. But now we’re going to break. Cliff, do you want to put that last slide on again? And just before we break out? And does anybody have any other questions?
Cliff Chalon 56:23
Oops, sorry, too far.
If we don’t, I’d just like to say again, thank you, Cliff. It’s been a really interesting, thought provoking questions on there today, which was nice timing around but thank you, and it’s stuff I haven’t looked at, you know, stuff you see all the time. So thank you very much for bringing that unique perspective.