Article: Creating competitive edge through culture building

Culture

Creating competitive edge through culture building

For translating culture change to business outcomes, Raychem RPG built a cultural transformation strategy through workshops
Creating competitive edge through culture building
 

Culture provides the greatest source of sustainable competitive advantage

 

Raychem RPG had initially created its business strategy around Product (P) and Delivery (D) and created a competitive edge through these two elements. It was not until two-three years ago that the company realized that it was easier for its competitors to copy these two elements and dent its profit margin. Strategy was therefore reviewed and it was suggested that the company include Service (S) and Experience (E) both of which required a very supportive culture. Thus, there was a growing need for a culture which gives the company competitive advantage of having a PDSE strategy.

Building supportive culture for increasing profit margin

In absence of a supportive culture for PDSE strategy, the company’s profit margin was getting affected. Market share and customer satisfaction index were also suffering. If the issue continued, non-relevant R&D products would have made the company redundant in market. Since competitors could easily replicate its products, the company had a low margin because of similar products available in market. As a result, Raychem was not seeing a sustainable growth of business and risked losing customers.

Identifying right cultural transformation strategy

At first, Raychem considered continuing with its PD strategy and work towards maintaining its customer base. By doing this, the company would focus on innovation of new products and work towards improved and efficient delivery. This would help the company maintain its existing customer base. However, since product and delivery would not ensure sustainable growth of business, Raychem decided to create a culture driven PDSE strategy since it would ensure sustainable growth of business. Culture imitation is moreover difficult as compared to product or technology replication. Further, culture also provides the greatest source of sustainable competitive advantage.

Moving towards this goal, Large Scale Intervention Process (LSIP) workshop was organized to help the managers understand, align and build ownership around the new strategy. For LSIP, Raychem RPG engaged the LSIP Expert, Mr. Kanti Gopal. This workshop also helped managers understand the cost of pursuing strategy without building desired culture. Based on this, formulation of the required business behaviors with action plans, long term commitment, sustenance and review mechanisms was necessary. The strategic transformation exercise followed a step-by-step approach. First, the organizational roots were revisited, followed by context setting and storytelling. Voice of customers, partners, employees and markets were all taken into consideration. Through this, a case for change was established and strategy was then shared, following which business behaviors were formulated. Thereafter, LSIP developed a new set of cultural pillars that would lead the company to sustainable and profitable business result.

Translating cultural change to business outcome

The outcome of the initiative was phenomenal wherein the company witnessed a marginal rise in the customer satisfaction index; customer retention also increased by a large per cent. Cumulative score of all managers showed a positive growth and the business target achievement increased significantly. Raychem also witnessed increase in its new products and market share and its profit margin saw a significant expansion. To take the initiative to the next level, measurements and assessments were conducted across all managers. Those whose reports cards were in red have now been assigned coaches for improvement. Further, few of the processes developed to enable the company’s cultural pillars are being reviewed and necessary action is being taken to improve them. New comers in the company are also being inducted through corporate induction.

Raychem is continuously reviewing the progress made by the company through this intervention and capturing its journey of cultural transformation. The company has documented its progress, presenting it to the leadership team on regular basis. From time to time, the papers on cultural transformation have also been presented to different forums in order to capture external feedback.

(Raychem RPG won the L&D League award for the “Best in Culture Transformation” Category)

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Winner's Response

We are delighted to receive the award for the "Best in Culture Transformation". Since culture is an abstract concept, we examined it in a fair amount of detail and took the whole company through the LSIP (Large scale interactive processes) route, it is what gave us a competitive edge. When it came to measuring the success of our initiative, we looked at everything from business behavior to business benefits. So we not only focus on our profit margins and new products but also look at collaborative innovation. It has been a two and a half year journey with the initiative, we will continue to refine and make it better. 

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Topics: Culture, #RootedinLearning, #LAndDWeek

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