Doug Ready at UNC Kenan-Flagler Business School and Emily Truelove from MIT Sloan School of Management have spent the last two years studying a group of companies that bucked the recent gloomy economic times and flourished whilst their peers have floundered and discovered that a 'collective ambition' lay at the heart of the difference:
“A luxury hotel chain emerges from the industry’s worst time in its history stronger than ever. A financial institution thrives while its peers receive government bailouts, suffer debilitating reputational blows, or cease to exist. A beauty retailer on the brink of extinction a decade ago is now highly profitable and opening an average of two new stores a week.”
Ready and Truelove identify that the special ingredient that sets these organisations apart is a strong collective ambition that allows them to have:
“…a story that depicts their purpose, vision and plans on how to achieve their goals.”
From their research they have identified the Seven Elements of Collective Ambition in organisations:
- Purpose: The organization’s reason for being; why it exists; its core mission.
- Vision: The position or status an organization aspires to achieve in a reasonable time frame.
- Targets and milestones: The metrics used to assess the extent to which the organization has progressed toward its vision.
- Strategic and operational priorities: The actions an organization will take (and not take) in pursuit of its vision.
- Brand promise: The commitments an organization makes to its stakeholders (customers, communities, investors, employees, regulators and partners) concerning the experience it will provide.
- Core values: The guiding principles that dictate what an organization stands for in good and bad times.
- Leader behaviours: How leaders will act, day-by-day and in the long term, to implement vision and strategy as they strive to fulfill their brand promise and live up to their values.
What the authors do differently in this paper is to go beyond setting out the above seven principles and let the reader to get on with the implantation themselves. They are aware that it was not just the identification of these seven elements that made the companies successful; it was the integrative approach in which they wove the elements into the organisational culture that made the difference.
The second factor that Ready and Truelove highlight that is different to the normal approach, is rather than looking for ways to disassociate this process from any HR initiative they actively promote the HR and Talent functions as being key drivers in the process.
“For any organization trying to harness its collective ambition, HR’s role is clear. HR and talent management professionals are involved by:
- Working strategically with other senior leaders to frame the story that will become the organization’s collective ambition.
- Working with other senior leaders to build employee engagement across organizational boundaries for the initiative.
- Communicating to ensure the organization’s message is aligned with its purpose, vision and strategy.
- Participating in the development of metrics to measure achievement.
- Ensuring that new and existing employees at all levels have the knowledge, skills and abilities, and cultural fit to achieve the new business model. This involves not only talent sourcing and development, but also leadership development and succession planning.
- Ensuring that the organization’s compensation and benefits systems are in keeping with tomorrow’s business model.”
The ‘Glue’ and the ‘Grease’
The two key processes needed to achieve this are ‘the glue’ that creates the collective sense in the organisation, and the ‘grease’ that enables it to function efficiently:
“embrace the challenge of managing a powerful duality: that of balancing collaborative engagement (what we refer to as the glue) with commitment to disciplined execution and accountability for results (what we call the grease).”
The paper looks at two specific cases: Standard Chartered Bank and Four Seasons Hotels. The Standard Chartered story is gaining increasing recognition today – under its strapline ‘here for good’ the bank showed its integrity and commitment to its core Asian and African markets, and during the financial crisis it accepted losses in certain markets rather than cutting and running like many of its competitors. This integrity resounded not only with its customers but also with its employees - it created the glue.
The Four Seasons Hotel Group faced, along with the entire hospitality industry, a bleak trading environment in 2008, coupled to which the iconic founder of the chain, Isadore Sharp was stepping back from the firm and Katie Taylor due to take over as CEO. She adopted the Collective Ambition Compass model …
“…Taylor formed a team of five vice presidents (including HR) from different parts of the business.…. The team used their “bold ambitions” —product, people, and profit—to organize their findings, which helped highlight how they were interrelated. They realized that to have the best product (luxury hotels), the Four Seasons needed to attract and develop the best people and create a culture that retained them. They knew that when they met their “people” goals, their hotels would thrive and the profits would follow.”
The people team…
… led an initiative called “Who gets to be a leader around here?” The goal was to transition Four Seasons from an informal promotion system to a robust, systematic program that would promote people based on their potential and performance. This was particularly important to Four Seasons because service is their competitive advantage and it is vital to have the right people in the right roles and to ensure that they are developed, rewarded and retained.”
And in this way they created the grease. As the authors acknowledge building this glued and greased organisation is not easy – but with the correct leadership, HR input and focus it can be done.
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