Firms must engineer a culture that supports their mission: Bain’s Patrick Litre
Bain’s Patrick Litre on culture, change and transformation of companies
New Delhi: Management consultant Patrick Litre, one of Bain & Co.’s top global gurus on change management, maps the ongoing changes across industries and companies and creates strategies for organizations to thrive within those disruptions. With more than 25 years of experience across multiple industries, he co-leads Bain’s global Results Delivery capability and assists senior leaders in executing transformation programmes. In a interview last week, he spoke about culture, change and transformation of companies. Edited excerpts:
Are there different kinds of cultures that companies can create?
Culture eats strategy for lunch, so first, it’s important to know that there is no universally better or good culture. The best culture is that culture which enables the mission of the company and the best cultures are those that are designed and aligned to support the company’s mission.
To take an extreme example, the culture of the mafia is perfectly designed to support the mission of the organization to be a successful crime organization. Organizations thus need to engineer culture that supports their mission.
However, there are other patterns emerging and what we have seen from different generations and the change in environment is that businesses have to adjust much more quickly. Some cultures work better today so 20-30 years ago, very top-down, highly disciplined, hierarchical structure was very effective.
With the changes we are seeing today, cultures that promote lateral teaming and collaboration across organization, or running projects operating as an intact task force are better because they adapt better to complexity and the agile movement requires this. And this matches expectations of today’s generation of workers who want more autonomy, are self-directed and is also more effective for innovation. So many of our clients are shifting from the hub and spoke operating model and the culture that supports to a more agile culture.
Is this change difficult?
Yes, it is difficult to change because the identity of leaders in the hierarchical firm is threatened—they are leaders because they are truly competent and have expertise in a particular domain so that is why they are running sales or engineering. But when you move to cross functional agile teams, the main competency of the leader changes to how to frame a problem, how to get the right people in the same room, give them a good process to operate as a team, and encourage them to find the solutions themselves. So it is a profound identity crisis. If I am not giving them the answers any more, then what is my job? The shift towards learning how to be a leader without having to have all the answers is a new muscle and it does require a lot of adjustment and often requires coaching.
Aren’t the basic tenets of business the same? If so, why do companies need to change every so often?
One reason is that because the environment is changing enormously. We tend to look at companies that need to transform along two dimensions: what is your competitive position in the market —strong or weak, and what is the stability of the business model that they operate in? Is it reasonably stable or changing rapidly and that creates four different types of transformations. What we are seeing now is there are more and more segments of the business world that are rapidly changing where the basis of competition is changing because of technology, opening up of ecosystems to partners, so if you are operating in this quadrant, your company has basically one shot at doing it right because they are weak already and the competition is changing so they have the opportunity to create a new path but they do not have huge resources to do it. We call that Go big or Go home. Or you have companies that are very strong but the market is changing so they need to reinvent too. Only few segments are not rapidly transforming like governments, heavy industry, chemical industry and heavy asset based industries.
How would you evaluate Indian business?
I think you have the same drivers in India—the aspiration of the workforce, who want more autonomy, working in teams, millennials have certain expectations, the impact of technology and digital is more than anywhere else in India and the opportunities to operate with different forms of organizations is the same.
Indian business is either promoter-driven or family owned. Do you see that as a healthy development?
Across the world, family-controlled businesses tend to outperform other forms of corporations. The founder’s mentality or the ability to serve needs, sort of the genius of the entrepreneur is extraordinarily powerful. In fact, incumbent companies are trying to rediscover the founder’s mentality; after all, the sense of insurgency on behalf of an underserved customer is what made the company great in the first place.
So, I wouldn’t assume that a founder-driven company is a bad thing. If anything, the data shows they outperform. The question is as you scale, how do you maintain that spirit while creating the right governance, so that you can grow and contain it—not move towards becoming a bureaucracy but keeping that energy. For instance, in France, the luxury goods companies are all family-owned and they are all very profitable.
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