Tuesday, 3 June 2014

Giver/Taker Cultures... the misery trap hitting your company’s bottom line?

Attitude!!... What inspires some is despised by others...



I always loved the motto in the three musketeers movie “all for one, and one for all!!”… Hooray for good ethics, collaboration and professional skill winning out the day!!... I cannot say “the Cardinal of the Red Guard” character in the movie would agree though!!... Apparently, in his world, collaboration and fellowship are ugly words!
  
So, what is giver/taker culture, why is it important for sustainable business and how can we manage the cultural concepts? The Giver Taker culture is a ranged cultural focus on collaboration and mutual assistance or self-interest and manipulation to achieve goals and objectives in a group setting. In 2008, Bill Gates said, “there are two great forces of human nature—self-interest and caring for others.” He was right as it describes the giver taker culture, which has being defined after 9/11 to try and capture the reasons for the US Intelligence failures that led to the single largest loss of life due to a foreign attack on United State’s soil. The team of Harvard psychologists led by Richard Hackman investigated the phenomenon and in their findings, the “giver take culture" was born.

One of the more notable characteristics of the model is its effective simplicity. The model is designed into three main classifications as follows:

Giver (team player/contributor/assist without expectation of reward/collaborative)

Matcher (will assist for equal reward or return assist/never gives more then they receive/fearful to support any action against “taking” behaviour)

Taker (individualistic/always looks to take ungratefully/no feeling of obligation to assist/self centred/autocratic)

The model based on the Harvard research goes into to say that givers are recessive to the value exchange with takers and thus become targeted by takers. It also says that givers do not do well in a “taker culture” whereas takers tend to do well for a period of time in a giver culture at the expense of givers, which can seriously damage and disrupt a company with a giver culture. Matcher's tend to do well in a taker culture given their adversity to team assistance for fear of being targeted by takers. They also can do well in giver cultures given their more relaxed but matching behaviours that provides limited team support based on the environment as they see it.

Professor Adam Grant
A foremost expert on giver taker culture in my view is Adam Grant, a Wharton Professor and Psychologist who said in a McKinsey & Co article about giver teams “In the highest-performing teams, analysts invested extensive time and energy in coaching, teaching, and consulting with their colleagues.” He is very correct, the human touch in leadership, strategy and operations makes for the utilisation of employee potential in a collaborative group setting leading to higher performance, outputs and sustainable results over time. Conversely, a taker culture is more inward and self-centred leaving little room for actions that don’t lead to gain for the individual in a taker environment. This suits more hierarchy and market based organisational cultures where taker cultures tend to be less focused on the person and more on the vertical structure or the transaction. The giver culture on the other hand is more relevant to adhocracy and clan cultures where collaboration and people are the cultural focus. The resulting cultural blends lead to very impacting performance levels especially in organisations that have service or quality aspects to their product range and/or internal infrastructures.

Shall we do some research on your company to see if its giver or taker culture works in the wider company culture? Ok, let’s do this! So starting out does your company culture generally focus on:
  • 1.     Transaction processing by any means possible at lowest cost (Market Culture)?
  • 2.     Focus on process and one-way communication from the top down in a command in control type structure (Hierarchy Culture)?
  • 3.     Focus on collaboration and flatter structure of management with scope for project management being done efficiency (Adhocracy Culture)?
  • 4.     Focus strongly on people and relationships to the point where strong bonds of fellowship exist in definable social groups throughout the organisation (Clan Culture)?

No company just does one of the above; it’s a game of averages in any estimation. However, if your overall sense of what your company does fits into one of the above, then you are in business to proceed to see how the human element inputs into the culture blend [giver/taker]. So do you and fellow employees generally:
  • a.    Assist each other without thinking about what you get in return on a regular basis?
  • b.    Feel and display concern for your fellow employees seeing the business in people terms as much as process and results terms?
  • c.     Interact informally with ranks above and below you in a two-way communicative collaborative style?
  • d.    Resolve differences through mutual negotiation and respectful dialogue?

If the above answers to questions “a” through to “d” are positive and match your identification of your companies overall cultural focus in question 3 and/or 4, then there is a good chance you have good cultural alignment to people behaviours and thus can expect sustainability and productivity to be of a good standard. You enjoy a giver culture in a flexible, service and/or creative/innovative oriented industry. The biggest threat to a giver culture is takers. The best defence against takers whom can act like a cancer of negativity and distrust in a giver culture is exclusion. Keep them out at selection stage by developing a selection process that effectively identifies the personality traits through psychometric testing, competence based testing and at least 2 rounds of competence based interviewing. Scenario tests are recommended for selection testing in a giver culture, which should be led in a consultative manner in my view. Bear in mind “matchers” can also do well in the above setting.

On taker cultures, do you and fellow employees generally:
  • a.    Wait for the boss on all “real decisions” whether big or small for fear of making a mistake or upsetting the boss?
  • b.    Rarely see each other as friends and bonds of fellowship, which are formed, are often founded on respect for negative actions to others in your career path? Is this seen as contributing to a ‘powerful’ reputation?
  • c.     Have little concern for the bad luck, plight and distress of others as it’s a “dog eat dog world”?
  • d.    Place greater weighing on what your boss tells you then what you did historically or how it can be done in a better and more efficient manner?

If the above answers to questions “a” through to “d” are positive and match your identification of your companies overall cultural focus in question 1 and/or 2, then there is a good chance your have good cultural alignment to a market culture and/or hierarchy culture which is focused on one way communication, command in control type tasking with your role being more a fulfiller rather then a value adder. This is suitable in industries that change slowly, are consolidated and have a high transactional focus in their day-to-day business, which can clearly be procedurally driven. Once again, selection processes for taker cultures can accept matchers as functional to the success of the organisation. Personality testing should be part of the process to ensure the balance between giver, matcher and taker is enough to add an extra layer of sustainability to the employee mix in your organisation.

In my article on Sustainable Capitalism, I talked about capitalism needing an upgrade to match the faster moving environment of today and the refocus on people in context to the organisation, which should be every company’s no 1 focus. This is relevant when you think how the proliferation of “takers” in teams across the US intelligence community led to information hoarding, inefficiency and mistrust that in aggregate created a material breach in US national security and 911. Companies face a similar sustainability threat from too many takers or any at all depending on the overall company culture.  With awareness of the above, the path ahead and what they want to be as a company can be chartered making sustainable capitalism an attractive proposition for the employee, not to mention the company’s bottom line, longevity and top line growth into the future.   

Wednesday, 28 May 2014

Trading Internationally, are tomorrow's risks today's opportunities?

True North? Are we sailing in the right direction?



We love the world we live in! With tea from India, chocolate from Belgium and computers from the United States delighting us as consumers, what is not to love about our world? What is easy to overlook however is the incremental cost of such delights. Is the framework of globalisation as its delivery vehicle a viable true north for us to sail towards in business and indeed as a society? Whilst the benefits of globalisation has transformed the world we live in which is felt nearly everywhere we go, this does not answer the kernel question for the longer term; is our developed model of globalisation a true north to continuous and positive development in mankind’s march through time? If so, how do we wrestle with the enormity of trading internationally and what can we do to better reap the rewards for trading across international borders?

One thing is for sure, its not the first time we have tried it! John Maynard Keynes talked of globalisation when he lamented of how a gentleman in London could be sipping tea from India before August 1914. Keynes in the 1920’s went onto talk of internationalisation and how it did not prevent war complicating the ability of nations to be self-sufficient. After the Bretton Woods agreement (1944), of which Keynes was instrumental in its draft, the transformation from colonial globalism to modern economic globalism, as we know it was complete.

John Maynard Keynes
Source: Biographyonline.net
Globalisation 101 defines globalisation as “a process of interaction and integration among the people, companies, and governments of different nations, a process driven by international trade and investment and aided by information technology.” The more recent addition of highly impacting information technology has seeded a disruptor wave that is transforming the landscape, as we know it. For any person, small business or multinational, this brings great opportunities but only if one is astutely reading the global landscape and exercising information driven decision-making skills before venturing into international trade.

Thinking international trade, we often think big business, but if we are pursuing information and understanding, the resulting decision-making at any size or level will have increased efficacy leaving sustainable success as the likely outcome. In thinking about our “true north” in international trade, I believe we should consider the following elements as key in our organisational approach and management of our business in international trade.

Risk Management is key in gathering, quantifying, assessing, ranking and addressing risks, both positive and negative in relation to international trade. The focus on internal risk areas like company preparedness, supply chain length, financial risk, and organisational set up are as important as territory culture mapping, market demand analysis and risk assessments of any strategic entry into an international market. A business will never be successful if it cannot keep its promises to its customers and run its business in a solvent manner.

Geo-Political Risk should always be explored assessing impacting risks like the upheavals we have seen of late in many territories altering the trading landscape. The US/EU sanctions on Russia for its part in the chaos in the Ukraine is a good example why we should as international traders monitor geo-political risk and open up options in timely manner for remediation of identified risks.

Economic Risk is a reality for all businesses trading either directly or indirectly in the market place. After all, if your end customer cannot afford to buy your product, your business will not be successful. The macro economic indicators like GNP, GDP and Jobs Data are some good indicators of overall macro economic management of a country or territory. However, it's always advisable to dig a little deeper with activities like monitoring news outlets local to the territory to see what is ‘big news’ such as layoffs, potential strikes, new investments in business and local government infrastructure investments.

Currency/FX Risk is certainly an issue to consider if you are billing in local currency or have a treasury strategy that bill’s in a regional currency. Your investment in currency into your books through billing, FX purchases or complex financial products like forward contracts will bring loss and gain risks that your business needs to understand and integrate into its wider strategic plans for entry to the market place. For example, as the European Central Bank (ECB) is now considering minus interest rates on the already low ECB base rate, banks would be wise to reconsider their strategic plans and how they trade in the Eurozone given they could be subject to interest charges, not payments on the cash they bank on deposit. Another good example is the strict and sometimes volatile FX controls placed on foreign currency in China. Its impact merits consideration in any planning session involving the country.

Country/Trading Risk is another area to think about. How do you want to enter the market place? Are you sure of your demand side analysis? What are the pricing strategies for this market? Is it compatible with your supply chain and distribution model? Is indirect sales preference a temporary or permanent feature to be reviewed into the future? How will your branding be exposed and developed especially in an indirect sales model? What security will be required on the high-risk territories such as letters of credit, 3rd party guarantees or more complex forms of security on trade? Will lengthening supply chains be an issue in the territory given its security and governance levels? Have you developed management plans addressing the identified risks from these posed questions?

Thinking about the main areas, the best way for entities big and small to start the process of collection, evaluation, ranking and output is to develop a risk register. Even on an excel spreadsheet, a risk register can be highly effective with the focus on risk classification (individual/group/aggregate risk), risk type (country/fx/internal/political/etc), risk grouping (link similar risks), risk weighting (what is the likelihood of it happening?), risk impact (the impact it will have on your business, financial and non financial). The other side of the risk register is the evaluated risk management response which should be acceptance (deal with it when it arises/reserve funds or resources for the eventually), mitigation (take steps to reduce the impact and/or risk weighting to acceptable levels), sharing (involve 3rd parties whom can lower the level of risk you are exposed to) or rejection (risk is too high therefore you cannot proceed to exposure the company to that element/point).


This type of information driven approach will inform us of our ‘true north’ in trading internationally. The resulting outcomes will be based on a higher level of awareness and understanding, which can only herald greater success probability. So when trading internationally, I submit that if we all take greater care with our risk management approach, less will get trapped in the pitfalls and more success will befall those whom embrace information driven decision making and in enough numbers can alter the course and trajectory of our societies true north in international trade making it safer, more informed and less subject to humanities dark side that is as clandestine as it is plentiful for the international trader.