Wednesday, November 18, 2015

Blame Competitiveness on People and Culture

When we think about strategy, we think about data intelligence, markets, profits, losses, competitors and many other numerical graphs and visions that will place your company in that sweet spot. However, when we see the essence of competitiveness in companies, it is notable that the many attributes for such success are given to the people and the culture that compose the company and the way they carry out the company’s mission and vision on their daily tasks.

Southwest Airlines is a good example of a competitive leader in its segment whose success is beyond its strategic positioning. Clearly the company holds a competitive spot against its competitors. It is unquestionable that Southwest Airlines’s market positioning, of low-cost/low-fare, is a noble strategic move in the aviation industry. However, would the company have been able to hold on to its strategy through crisis and challenges had it not been for the culture installed within its employees and environment? They have a clear strategy. But if they relied only on strategy, they would face the many companies alike that came about such as Ryanair, Jet-Blue, Easy-Jet, to name a few. The key to their success, despite of the market situation, is that Southwest Airlines remained faithful to its mission and values, for these were their foundation. They associated strategy as a roadmap as to where they were headed in the market. They knew where they were, and they knew where they wanted to be. They carefully planned their growth. Their culture was their strength to push the motor on this tricky and highly competitive industry. For this, their employees were “hand-picked”, since they were the essence of the company’s culture. The employees would carry out the real mission of Southwest Airlines and would enable to direct it towards its vision.

The Great Place to Work Institute highlighted that during crisis, employees at great workplace companies show resilience and pull it through. Companies that follow Southwest Airlines’s path for competitiveness have lower turnover and better financial performance. Place people first, then turn to your strategy. For as odd as it may sound, great place to work companies have one thing in common: people first. The work environment and benefits for employees, the respect and experience of the costumer are vital to express what the company truly accounts as success. SAS is a classical example of employee engagement to the company based on a strong, positive culture. They refer to their employees as “family”. Also, GE has a noble experience on growth through people management. Their organizational chart defined a bottom-up approach, where there aren’t any supervisors, but in place there are leaders and coaches. The “production associates” are truly engaged in the cause of the company and valued as people and teams. In this, GE found efficiency and motivation in their factories. strengthened the company’s strategy by adjusting the teams on production. Companies who focus on people to succeed are actually leading growth in their fields in the industry, they have reduced shrinkage and better quality in production and results.

So, the key takeaway is that competitiveness can’t be accounted only on strategy. It will face a fierce competition if it relies only on B.I. and trend numbers. For a company to be competitive, it has to remain faithful to its mission, values and culture. Mainly, the company has to turn to its employees and value them as people first. Motivation and trust move people to the cause of the company, placing it in high standard levels. Southwest Airlines, GE and many other companies are great examples that success comes from the true essence of a company: its people.

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