[MUSIC] Now, I'll start out with the example of where this alignment was attempted but it didn't quite work. And this is a case study I wrote on Nokia Siemens network. And this was a merger between Nokia and Siemens around their network business. It's since been reacquired by Nokia. But they really tried. They realized this alignment was important and they tried to align during the merger their external brand promise on the customer side and their internal promise to their employees, their employee promise value proposition. Now, this really didn't work, and worse yet, they tried to stitch them together in some very superficial ways, if you will. So semantically, they seemed to be related on paper but there really wasn't a connection, so it was quite confusing. They ultimately reworked it, but let me give you the example. So, there are three customer sort of focus values that they espoused. One was about being pioneering, these are on the insightfulness, the innovation. One was about being passionate and customer dedicated. The other one was about being pragmatic. This is about being efficient and adaptive. They also came up with the internal kind of promise, the internal values, and they did this in a very democratic way. And they did it in a way that was in the merger to try to align the people internally. The problem was they did this before the external promise was well articulated or even known. So naturally, these internal values didn't really fit. They were values such as focus on the customer, win together, communicate openly, inspire, innovate. While you can see that some of this connection can be made, they weren't made in a meaningful way, and on a behavioral level, they certainly didn't support each other. Ultimately, they realign them and move forward. But in times of the merger, they didn't. And the problem with this sometimes is, actually this whole exercise, even the external values, what they try to do is to squish together, if you will, the values of Nokia and Siemens or the customer promise. And internally, merge the culture in very generic ways, if you will, rather than think about what is this merger trying to achieve in the marketplace and actually align both the external and the internal premise around what the customer wants. It was more of a naval gazing exercise internally. Now, an example of where this did work very well is actually Reckitt Benckiser. This is between a Dutch and a UK company, and they really brought onboard the sort Dutch innovativeness of the company against some of the powerful British brands. And this is where they didn't try to find common ground, if you will. If you looked at what the values were maybe that Reckitt Benckiser had originally and focused on those, that might not be the optimal way to go. Instead, they focused on the values that were different and that supported their strategy going forward. But for them, everything was really aligned. Their vision was all about solutions that make life easier and better. The strategy was around constant innovation. And their employee value proposition was all about entrepreneurship, being innovative, having real ownership of your efforts. Achievement was important, and some of the employees found this a really hard environment to survive because it's kind of cutthroat, they encouraged healthy competition between the brands. But they really needed to align the culture in order to deliver on the brand and on their vision. They even went so far as to rename Reckitt Benckiser, RB. Why? Because well, the consumer doesn't actually see Reckitt Benckiser or RB, what they see are some of their big market facing brands. But they don't see the brand that stands behind it so that brand was really lived very much like you would live an externally focused brand. They really put branding principles against the brand internally. And brands such as entrepreneurship and ownership became central to their efforts. They also went through this exercise and they said, look, these values can mean many things to many people. But what do they actually mean in practice? And how do they mix together? So it was kind of an exercise which I call digging deeper. And that's going from the abstract values down to concrete behavior. So if you think about values such as achievement and entrepreneurship, and you take those together, one of the attributes that has might be, I aim to outperform. And some of the behaviors they encouraged were inspire each other to deliver on stretching objectives that really push people. They then supported those, if you will, with value based assessment, that's part of their systems and processes. Not taking a risk is actually a bad thing at Reckitt Benckiser. And the pay was also performance based. So while the base pay was kind of average at Reckitt Benckiser, you could actually succeed by outperforming. So everything was aligned for them. Now, these are not always obvious. So if you go through this dig deeper exercise, think of a brand like Club Med. So Club Med, they've evolved from the 1970s as a brand. It's really about delivering happiness and total relaxation for their customers. So if you think about it, if you had used superficial alignment, I should say well, if I promise total relaxation to my customers, maybe I should promise the same to my employees. And maybe one of our internal values should be, yo, relax. Take it easy. But exactly the opposite is true. What you need to do is to think about, well, in order to deliver on a total relaxing experience for my customers, what kind of behaviors do I need internally, and what kind of values do I need to support those? So one of their values is responsibility. This is really about it's your responsibility to take care of the customer. And if you think about what kind of people they hire, they're probably people who are really detail oriented. They probably look through your resume that you hand in and do you use the same fonts? Are you consistent? Are you somebody who is detail oriented? Maybe somebody in the interview who notices rubbish on the floor and puts it in the waste basket. Those are the kind of behaviors they might be looking for because they allow the customer to relax. And they might support that with certain metrics in terms of customer complaints. We don't want any. They might think about certain processes like checking every light bulb in every room after the customer checked out. Why? Because you don't want the customer when they want to relax in the evening, when they turn on their reading light and it doesn't work, they're not going to call the front desk and get somebody to come up while they're in their pajamas. You really need to take care of that whole process. So this exercise in digging deeper is actually quite important because we're going from the abstract to the concrete. And what we're really saying is, well, if we have these different codes across the organizations where they all come together is the action. And I call this gaining traction. There's action in the word traction. And what you need to do is you need to look at the different codes that sit behind your business, behind your brand, behind the behaviors of your people. Look across them, get the heads of those business units together to discuss how they fit together. What you'll find in most cases is some of the values, especially on the HR, on the human resources sites, are very, very generic. They create a good place to work maybe to attract employees, but they're very generic. They don't differ between companies but ultimately you need to build a differentiated culture t o build a differentiated brand so all your HR values and codes have to be differentiated as well. And that's the challenge for you to go through as an organization. So this module is around aligning the 3Bs. You can think of using certain tools to get the top management together. I use certain board games to do that for example. But the real lesson is if you think about alignment, think about how much time you spend as an organization aligning your systems, your processes, kind of the hard bits of the organizations, your structure. Maybe in the case of a merger that's really at the forefront of the merger. And then think about how little time we spend on aligning our culture, our brand, our values, the soft stuff in the organization. Yet we know going back to the merger that it's the soft stuff that often leads to mergers failing or not achieving their intended goals. We spend much less time on them, much less effort, much less money than on the hard stuff. Yet going forward, the hard bits, the nuts and bolts of the business, they're easy to replicate. There's external agencies you can hire to implement certain systems and processes. What's very hard to replicate and what leads to a sustainable competitive advantage is actually the the soft stuff, your culture, the attitudes and behaviors of your people. So there should really be the equivalent focus on the soft things, not just the hard things, in the organization. [MUSIC]
