Changing Culture Is Central to Changing Business Models

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Culture is all-encompassing. It radiates through every action taken inside an organization — including deciding what is made and sold, which employees are hired and retained, which customers are serviced and how, what is measured and reported, and where time and money are invested.

However, while some leaders strive to create tomorrow’s cultural norms using advanced technologies, others resist cultural changes and stick to their knitting. The result is a growing chasm between winners and losers. For example, today’s trillion-dollar behemoths are all technology-based organizations that take advantage of mobile technology, data, multiple revenue streams, and AI strategies. They are led by leaders who want to change the world, while the companies that held the top spots of growth and value just two decades ago — banks, oil companies, real estate companies, and manufacturers — are paying the price for holding on to their historical cultural beliefs.

A good example of what’s at stake is the emergence of electric vehicles and Tesla’s rise to prominence as the most valuable car company in the world. In the companies that Tesla has surpassed, boards and leaders have resisted adapting to new cultural and technological realities. It’s not that the emerging cultural norms about the advantages of embracing modern business models have been unclear. It’s that while culture provides the foundation for organizational and industry stability, it is also the force that keeps leaders stuck in their old ways of conducting business. The takeaways from this story apply to every industry.

Leaders who are serious about creating the organizations of tomorrow have a simple choice: They can stay with the cultural norms that created their prior success, or they can do the hard work to change themselves to ensure success in the future. Today’s leaders need to take a personal journey to avoid the fate that has befallen companies such as Blockbuster, Kodak, Sears, and so many others, and it starts with three steps: examining personal values in order to redefine them, communicating the new values widely, and measuring what matters — the performance of the new initiatives and investments that are necessary.

While culture provides the foundation for organizational and industry stability, it is also the force that keeps leaders stuck in their old ways of conducting business.

Leaders: Change Yourself to Change Your Culture

Cultural norms are deeply held beliefs about the way an organization should work. These norms translate into different cultural products throughout the company, including values, customs, and traditions. Said differently, cultural norms define an organization as well as its sources of growth and value.

For example:

  • If leaders believe in manufacturing, they make things and measure units produced.
  • If leaders believe in services, they deliver support and measure hours billed.
  • If leaders believe in analytics and AI, they measure data collected and insights generated.

But new technologies — coupled with consumers’ changing wants and needs — disrupt legacy beliefs. Twenty years ago, most leaders would have said they believed that making things was more important than matching buyers and sellers. That core belief has been shaken to its core, of course, as subscription and marketplace models powered by data and AI began to fuel the most powerful companies in the world today — Amazon (with Prime and its massive supplier network), Apple (with its iOS developer community), Facebook (with its billions of users), and Google (with its search and matching algorithms). Further, external forces like the COVID-19 pandemic can accelerate the demise of traditionally held norms and make those who are best prepared for the future the winners of today (such as Zoom, Shopify, and Spotify).

Three Steps Toward Change

If leaders are itching to change their corporate culture and direction, we recommend that they first follow three steps to challenge their own biases:

Step 1: Leaders need to examine their thoughts and values in order to redefine them. Attempts to change an organization’s strategy, products, services, measurements, or reporting will be in vain if leaders don’t realize that cultural change is an inside job. Leaders have to change first.

Take Ford, for example. Along with other car manufacturers, Ford has finally decided to enter the electric car race. However, for Ford to catch Tesla, its leaders need to let go of the company’s rigid traditional management practices that made it successful. That’s the only way Ford will be able to compete for customers as other U.S. states join California in prohibiting the sale of internal combustion vehicles and, in so doing, create the new cultural norms for the industry. This is in stark contrast to the days when Henry Ford started his business and became the cultural trendsetter.

Before they look at their products, people, and processes, leaders have to better understand their own underlying attitudes, behaviors, and beliefs. Only by challenging and changing core beliefs can leaders consistently act in ways that support a true business model transformation.

Step 2: Leaders need to communicate their new identity. Clearly defining the values that management and the board hold should help an organization create today’s newest business model: AI-powered digital platforms with multisided revenue models. Doing this requires that they discourage existing employees from keeping their heads down and proceeding with business as usual.

A stunning example is today’s colleges. For a long time, universities’ leaders resisted restructuring their business model — by sticking to a primarily on-premises structure despite its cost to students, limits on access, and restricted extensibility. COVID-19 is forcing a sea change: This fall, at least 65% of higher-learning institutions are holding classes completely or partly online, according to the College Crisis Initiative at Davidson College. The astonishingly fast shift to digital classes will drive down the per-student cost of traditional instruction if it sticks as the pandemic wanes. Colleges and universities will need to rethink their identities and the new value they are proposing to justify their high price tags. This work should include examining how data and AI can be leveraged to reinvent the college experience.

Company employees, customers, investors, and lenders all need to understand a leader’s new belief system before they will be ready and willing to align their actions. Only by overcommunicating can leaders ensure that their new belief system is accepted and embraced.

Step 3: Leaders need to measure the impact of new cultural norms on the company’s performance. To truly transform, leaders must identify new key performance indicators that link to their company’s emerging new identity and track and report them. If you don’t measure it, you won’t manage it, nor will you value it. Leaders and boards that continue measuring the same things they have always measured and valued will end up with what they already have — a slow-moving legacy business. But if they do want change to stick, they will need to follow up with adjusted compensation and rewards.

For example, Blockbuster measured brick-and-mortar stores and individual video rentals, while Netflix measured and built subscriptions (first with a physical product and then, explosively, through a digital platform). John Antioco, former CEO of Blockbuster, recognized the importance of heavily investing in a digital platform. But at the first hint of unprofitability during this investment in the transformation of his company, the board and investors quickly reverted to their old beliefs about what creates value and where to allocate dollars, and Antioco was ousted. Within a few years, Blockbuster declared bankruptcy.

Leaders often fail to change what they measure, manage, and report, hoping that somehow those parts of the system will be OK while the rest of the organization changes. But the best thing leaders can do to change behaviors is to change what is measured, managed, and reported.

Change Your Leadership Culture — or Your Leaders

Organizational culture has a strong impact on the efforts of an organization trying to adopt big data, machine learning, and network-based business models to catch up with today’s leading companies. The reinforcing loop — culture — is the foundation of that race. If leaders truly want to derive meaningful business benefits from analytics and platform models, they must proactively address their own core identities before trying to introduce large-scale transformation initiatives.

Most leaders simply don’t want to put in the work and examine their core beliefs, and neither do their boards. The fear is that they will become destabilized. As a result, both leaders and boards make short-term decisions to remain aligned with legacy industry norms that in the long run lead to their demise. Consequently, sometimes the only way out is to replace leaders, including the board (and, potentially, investors, too).

To paraphrase famed U.S. baseball manager Yogi Berra: You’ve got to be careful if you don’t know where you’re going, let alone what you stand for. Otherwise you might not get there.

Topics

The New Leadership Mindset for Data & Analytics

This MIT SMR Executive Guide offers new insights and strategies for how leaders can help accelerate their companies’ data efforts, from identifying the type of talent they need to shaping a company vision that supports a data-driven culture.

Brought to you by

See All Articles in This Series

Out of the Crisis, Into the Unknown

The COVID-19 crisis began in March in the United States and shows no signs of letting up. Globally, some organizations are adapting and holding their own. Some have been hit very, very hard. Most leaders are struggling to prepare for what could come next and to keep their teams engaged and moving forward.

In this webinar, leadership preparedness expert and MIT SMR author Eric J. McNulty offers strategies for adaptation, resilience, and building trust in a time of vast uncertainty.

5 Simple Tricks to Keep Yourself Motivated in tough times – Entrepreneur

5 min read

Opinions expressed by Entrepreneur contributors are their own.

You’re reading Entrepreneur India, an international franchise of Entrepreneur Media.

“People often say that motivation doesn’t last. Well, neither does bathing—that’s why we recommend it daily,” said Zig Ziglar.

Now more than ever, it is hard to stay motivated with the COVID-19 lockdowns and the changed work setups. As there are no longer any buses to catch or traffic to get stuck in, it can be hard to wake up on time and get ready for work. The new normal is comforting, but too much comfort can be disguised as destruction, too. And thus, as simple as it sounds, motivation is the tool we need the most right now.

Here are five wonderful yet simple tricks to help you stay motivated and energetic.

Trick of Treats

Well, as a kid, I am sure your parents would have rewarded you with treats for following their words or for completing certain tasks. And you did those tasks happily for a treat, even if you hated it!

We are no longer kids, but human psychology can still work the same. To motivate yourself, you should set certain rewards. Like, if you are a student, after completing a chapter, you can have 30 minutes to play your favorite game. If you are a foodie, you can treat yourself to your favorite dish after finishing the important presentation on time. You can choose whatever that suits you, it can be hearing your favorite songs, talking to a friend over call, or even enjoying a nap. Work hard and enjoy what you deserve.

Say Bye to Procrastination (Most difficult thing, first thing in the morning)

Procrastination is the enemy of motivation and works as a sweet poison. It can give joy for a few moments but after that, the guilt of avoiding work follows. Thus, bid goodbye to procrastination.

The best way to do it is to act immediately. Procrastination starts as soon as we wake up; we press the snooze button on the alarm. We procrastinate things as we give our minds the time to rationalize that we can do this task later, and that leads to a streak of pending work. Thus, act as soon as you feel your mind will play the game with you. If you dread going on a walk, just get up and get your joggers on, you would be halfway through your task. The key is to get up from wherever you are within seconds and don’t give your mind the time to tell you that you have the time to do it later.

Pep Talks

Well, you are the ultimate expert that you need for yourself. As a kid, I am sure, we all have used mirrors as our stage for winning an Oscar or a Nobel prize! But, now more than ever, we need that self-praising back. It is not about standing in front of the mirror and saying nice things, it’s more about boosting yourself up emotionally.

“Real optimism is not the pep talk you give yourself. It is earned through the labor involved in emotional housekeeping,” said Augusten Burroughs.

Thus, it’s important that you wear your crown of self-praise and give yourself your own TedX speech. You can do it, trust me.

Break it Down

You cannot climb a mountain with one step, right? Just like that, you cannot expect yourself to fulfil imaginary expectations of completing huge tasks in one go! Worst case scenario, you would totally lose the motivation to do that task as it can impact your confidence level.

Small steps lead to big success. The best you can do for yourself is to break down your task into small pieces. If you are supposed to edit a 500-page book, break down the task to edit 50 pages every day! If you are supposed to give a speech, divide days for researching, writing, and improving it. This will offload your burden, and you would feel motivated each day for marking right beside the task.

Don’t Be Hard on Yourself

You can try your best to keep yourself up on the toes of motivation, but there are going to be days when you feel like doing absolutely nothing! And on those days, just do nothing!

We all deserve a break, and mental health is just as important. That’s why, it is alright if you sleep the entire day, eat junk food, binge watch your favorite show, or hang out with friends or family. We deserve all these simplicities of life! Taking time for yourself is essential; it can rejuvenate your inner self to do better after the break! So, don’t feel guilty when you get the thought of doing nothing, instead, enjoy doing nothing.

Last but not the least, make motivating yourself a routine, a lifestyle. Do one new thing every day, play your favorite music in the background, and feel good about yourself for doing the best you can. After all, little things make all the difference.

VanEck Launches Bitcoin Exchange-Traded Note on Deutsche Boerse

VanEck, the New York-based investment management firm with around $50 billion in AUM, has launched a bitcoin exchange-traded-note (ETN) that for trading on the Deutsche Boerse Xetra.

Listed on the Frankfurt, Germany-based trading venue Wednesday, the VanEck Vectors Bitcoin ETN (VBTC) is physically backed by bitcoin and tracks the MVIS CryptoCompare Bitcoin VWAP Close index.

“Bringing to market a physical, fully-backed major exchange-listed bitcoin ETP was a top priority of our firm,” Gabor Gurbacs, director of digital-asset strategy at VanEck, said. “We hope to serve many clients and partners in Europe, Asia, and across the world using our innovative, investment-friendly, and regulatory-conscious access vehicles.”

An ETN is a type of unsecured debt security payable to the bearer that tracks an underlying asset or an index. In effect, they mean, investors can gain exposure to an asset class without owning it.

VanEck has partnered with Liechtenstein-based crypto custodian Bank Frick for secure bitcoin storage services. The total cost associated with managing and operating the instrument, or the total expense ratio, is 2%. The investment product is currently limited to investors from Germany, the Netherlands and the U.K.

There are now three bitcoin ETNs listed on Xetra. ETC Group was first listed in late June, followed by crypto ETP issuer 21Shares in July.

The firm’s decision to launch an ETN comes after several failed attempts to win approval for an exchange-traded fund, or ETF, from the U.S. Securities and Exchange Commission.

Disclosure

‘BitcoinTuesday’ to become one of the largest-ever crypto donation events

BitcoinTuesday, scheduled for Dec. 1, aims to become one of the largest cryptocurrency fundraisers in history. 

The Giving Block, a crypto donations company, has secured partnerships with over 120 nonprofits and 30 blockchain companies to spearhead BitcoinTuesday — a one-day event that promotes charitable giving via cryptocurrency.

Some of the biggest names in crypto will participate in the event, including Cointelegraph, Gemini, Ledger and Blockfolio. Along with dozens of other blockchain companies, they are stepping up to help over 100 charities collect Bitcoin (BTC) and other cryptocurrency donations before the holidays.

BitcoinTuesday will feature several trivia fundraising events, where HODLers can test their knowledge of the cryptocurrency and blockchain industry. Users are also encouraged to create their own fundraising events, such as live streams or poker tournaments, to support their favorite charity.

The Giving Block tells Cointelegraph that BitcoinTuesday 2020 will see “1,000% growth in nonprofits accepting cryptocurrency donations.” Organizations like Save the Children, No Kid Hungry, and The American Cancer Society are just some of the charities that will participate in this year’s event.

According to The Giving Block:

“All our charities accept more than just Bitcoin. Bitcoin is front and center, but you can donate every crypto currently supported on Gemini.”

A similar event last year successfully onboarded a dozen charities. BitcoinTuesday 2020 is an order of magnitude bigger, signaling a clear shift in how nonprofits view digital assets.

With hundreds of billions of dollars flowing into the cryptocurrency market this year, digital assets offer new fundraising options for charities. The Giving Block tells Cointelegraph that crypto adoption has a positive impact on donations as holders look to offset capital gains taxes by making charitable contributions.

They also believe that nonprofits themselves can aid crypto adoption by offering users the opportunity to donate via digital assets:

“Nonprofits adding crypto as an option across their website and platforms, calling for crypto gifts in their communications, posting about crypto on social. This drives their mainstream audiences into the crypto scene which is invaluable.”

Of course, charitable giving is nothing new for the crypto community. In Dec 2017, an anonymous Bitcoin charity called the Pineapple Fund gave away 5,057 BTC to 60 charities. The Giving Block is looking to replicate the success of the Pineapple Fund and lay the foundation for an even bigger charity drive in years to come. Although there is no set goal for how much BitcoinTuesday can raise, The Giving Block says, “we think raising millions is perfectly reasonable.”

They added:

“It will depend on who steps up and makes a statement!”

Nonprofit charities can participate in BitcoinTuesday by applying directly through The Giving Block. Other companies can participate in the event by becoming a sponsor or promotional partner.

If you are a donor interested in making a large crypto donation, contact The Giving Block to facilitate a conversation between you and the charity of your choice.