BEE Partner, South Africa Economy Watch

In addition to all of this, the development and application of strategic thinking is dependent not only on the manner in which the manager views his or her company, industry and competition, but also on how he or she actually views business per se, and the world in general. All organisations function within the greater universe. How a manager views our universe will have an impact on how a strategy is developed. For example, if business is seen purely as a means of making money, then one’s overall thinking will reflect that view. If, on the other hand, a broader context is applied, such as a business as a means of providing employment and/or making a contribution to the development of one’s community or country, then broader-based thinking will result.

The new breed of South African manager that is required will need to encourage and harness the behaviour of company employees in the direction of strategic superiority. The guidance of employees towards a greater understanding not only of their own achievements, but also of their actual destiny within the employing company is fast becoming a corporate aphorism. If people are encouraged to define (or redefine) and assert an accurate and pragmatic view of themselves within their company, as well as to promote the creative exploration of the corporate role they play, it can lead to spectacular improvements not only in company performance, but also in job involvement and satisfaction. The new breed of manager will need a lot of expertise to make this happen. Business managers and leaders therefore carry a great responsibility, because it is through their behaviour towards their people that they ultimately affect th_edestiny of both the organisation and the individuals involved.

The benefit for the employee is likely to depend on the employee’s belief in the real intention of his or her employer. Employees wh_ohave been given the opportunity to participate in organisation_al climate development programmes have reported feeling a greater sense of achievement, job-fulfilment and belonging. Participatin_gcompanies have also recognised the contribution they have made to the welfare of their staff. Concomitant benefits are improved productivity, creative problem-solving and improved customer loyalty. These are all contributory factors towards the maximisation of shareholder value.

How an organisation and its people view themselves is fundamental to everything they do, and to how competitively they perform in the marketplace. In 1960, Theodore Levitt, then a teacher at Harvard Business School, published what was to become one of the classic marketing articles of all time. In ‘Marketing Myopia’, Levitt advocated formulating the right kind of definition of one’s business so as not to restrict competitive thinking.’ Using examples such as Hollywood and the American railroads, Levitt wrote that a too narrow definition of one’s business limited one’s ability to compete. It also made one’s company vulnerable to more creative- minded competitors, who were prepared to redefine and increase extant boundaries regarding customer satisfaction. This they would achieve by rethinking how they should define their business. Over the past forty years, legions of companies worldwide have used Levitt’s teachings to redefine their business. Often they discovered that there was a gap between their chosen definition and the kind of employee behaviour necessary to make that definition become a competitive reality.

Accurately defining one’s business is imperative from both a directional and a strategic viewpoint. It guides one’s thinking, which in turn can lead to creative problem-solving of a strategic _nature. But on its own it does little to encourage the right kind of behaviour within a company’s human resource base. It is at the behavioural level that the real advantage lies, because employee behaviour provides customers with their experience of the company. That experience, as we know, is often the deciding factor for repeat business. Whilst everyone in the organisation may accept and _understand the definition that company management has decided _on, they may never give a second thought as to what it means to them. Even if management does try to ensure that the definition becomes internalised throughout the organisation, applying the notion of `what business are we in?’ to everyone’s job is exceptionally difficult. For example, a front-line employee in a car rental company is unlikely to give a second thought as to whether or not his or her company is in the rental, transportation, convenience or whatever business management has decided on. Assuming that a customer, orientated culture exists, at the crucial point of customer interaction, the employee is more likely to be concerned with whether or not the customer has the best possible experience. Customers are usually not all that interested in how a company defines itself. What they do want is a solution to their problems and a good feeling at having their problems solved. An effective means of ensuring that employee behaviour is aligned with the organisation’s definition of its business is to take a twofold approach:

• Bring company employees into the process.
• Encourage them to explore the all-important question: ‘How do I define the role(s) I play in my company?’

This is a vital job for the new breed of manager. Take, for example, the case of a division in a major South African packaging group, which specialises in packaging for deodorants, paint, fuel and lubricants.’ When asked how the company should see itself in order to be more competitive, senior management replied, ‘A manufacturer and distributor of cans and activators to thepersonalhygiene industry, and tins to the paint, fuel and lubricant industries.’ Its whole emphasis in doing business was therefore built arou_nd that specific paradigm. Any value it tried to add was developed from that narrow perspective. Research indicated that that was exactl_y how the company behaved. No more and no less. Everyone in the organisation instinctively saw the company in that light, because since its inception, generations of company employees had gone through the motions of making and delivering packaging to their customers. The result was that their behaviour, from both an individual as well as a collective perspective, reflected that instinctive definition. Creativity had always been stifled, because management never really sought the suggestions of company employees. Moreover, successive management teams had never changed their view of the company to meet competitive conditions. They never really had to, as they enjoyed a near monopoly in the South African market. Globalisation soon changed all of that.

Lever Ponds, an important customer of the packaging company, threatened to use its global sourcing facilities in Europe to find better-quality packaging at better prices. Indeed, a senior purchasing official had stated that, whilst her company wished to do the right thing by South Africa and keep the business with a local supplier, she was not prepared to compromise her company’s position in the marketplace because of poor supply. Moreover, the business development manager of a leading international cosmetic brand complained that this packaging supplier was nowhere near proactive enough in advising him about the latest possible packaging designs. In his view, this supplier was nothing more than an order-taker that added no value to the customer’s business. Quite simply, the supplier had become complacent and, by global standards, was completely uncompetitive.

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