Entrepreneurs know, that solving a problem, bringing an idea to life and adding value is a necessary condition for starting a business. Technological changes and changes in lifestyle lead to new business opportunities and opening of new sectors.

In India – we had IT services startups in the 1990s. Many of those, are now large companies with a worldwide footprint. The mobile telecommunications revolution in India was led by new companies that continuously innovated on the initial business model and brought tariffs down to the lowest levels in the world.

Similarly, in the last 10 years there have been new Indian companies that have come up in the mobile devices space in India and are helping in the proliferation of affordable smartphones. However, for every company that grew and prospered there were many that failed.

We know that very few companies that show initial promise are able to endure and reach their full potential. As a very successful entrepreneur told me, “Most companies (in an industry) know What is to be done, it is How they do it -that determines if they are a flash in the pan or a long term player.”

Going about it

Creating ‘excellence’ is necessary for sustained growth and for building an enduring institution. This means creating value on the axes of:
(i) Product Innovation
(ii) Customer Intimacy

(iii) Operational Excellence.

The results show up as new products or services, deep insights about customer problems that help in building custom solutions, and being able to enhance quality, and cut cost.

Building a culture of excellence is hard and requires continuous effort. It requires the organization to set up a certain ‘Hardware’ and ‘Software’. It requires process excellence and discipline, but also innovation and discretionary effort.

There has to be alignment amongst key stakeholders on the organizational vision – the reason for existence of the organization. There has to be alignment on the core beliefs or values. This is the Core Ideology or the base for institution building.

To build the hardware, there has to be an understanding of the fundamentals of the business. Choices need to be made on the strategic pillars the organization would focus on to meet its objectives, and on the core capabilities and knowledge that needs to be acquired. Processes need to be built that help in doing business in the simplest manner. Structures need to be aligned to implement the strategy and in line with the processes. The positions have to be filled with the right people.

Processes need to be part of organizational systems for consistency and efficiency. In today’s organizations, these systems may be Information Technology applications, connecting stakeholders inside and outside the organization. This hardware is itself not static. The organization has to keep re-gigging the hardware- as it gets new insights and learnings in the real world and as its business changes over time.

The intangible

While the ‘hardware’ is important, organizations need to have the ‘software’ to create excellence. This is the more intangible part.

This includes:

(i) The level of enthusiasm and ambition of the workforce, measured by their propensity to put in discretionary effort and their propensity to learn and grow
(ii) The extent to which stakeholders identify with the vision and the common goal and collaborate across boundaries to resolve problems and improve
(iii) The mutual respect and comradeship amongst employees measured by the extent to which folks speak their mind and bring the real issues on the table
(iv) The level of ownership and trust across levels, measured by the extent to which decisions are made by people close to the ground
(v) The extent to which the leaders of the organization have grown from within and are regarded as role models.

The leadership of the company needs to work intentionally to create the hardware and software for excellence. Apart from continuously clarifying the organizational strategy and establishing a line of sight between the organization’s strategy and the role of each individual, leaders need to ensure that they role model the behaviours that is part of the ‘software’ required for sustained excellence.

The real challenge is to ensure that the software works effectively, as the organization becomes large. Typically, large companies tend to become increasingly bureaucratic and rule-bound and employees lose the alignment with the vision. It is imperative for the leadership to be aware of this and ensure decentralization of decision making, agility of response and autonomy for managers as the company grows. This is the only way to create ownership and accountability at the operating levels, which is essential for creating a culture of excellence.

It is easier to replicate the culture of the company in its various entities if the leadership is home grown and the founding team is conscious of the need of letting go and giving control downwards. Most companies that have successfully grown and created a culture of excellence in India have focussed on developing leaders and giving them authority and control as the enterprise grew.

Source: The Economic Times