For employees and companies, these are bewildering times. As business cycles shrink, entire industries are rising and setting faster. But you know that already. You probably also know that one-third of all Fortune 500 companies fall off the list after a seven-year ride. To understand the impact of this churn on employees and companies alike, Businessworld spoke to Wayne Brockbank, the Clinical Professor of Business at the University of Michigan Business School. Brockbank - who has consulted for the Tata group, ICICI Bank, Unilever and Marico - believes that career planning is not in the hands of employees anymore. As companies try to respond to a fast-changing marketplace, they will have to continually shuffle their employees to businesses with the highest returns. And how well they do that depends on their culture.

Uncertainty is now a sign of the times. The future of many institutions which we relied on, especially work organisations, is suddenly no longer certain. One-third of Fortune 500 companies disappear in just seven years. How is all this impacting the traditional employment contract?

Uncertainty certainly plays a role. Around the world, people want to access better products and services, even if they are available from a different country. This competitiveness can be both a blessing and a problem. It is a blessing because it enhances the quality of life for people around the world. On the other hand, it does create uncertainty. You have a job only if people are willing to buy your products and services and not somebody else's. If that happens, you don't have cash flows, and you don't have a job.

Of course, you can try and protect your workers from the realities of global competition. In France and Germany, workers are protected by regulations, unions and a whole number of things which are good in the short run. But over the long run, the economy suffers. What is needed is a system where people can move from where they are not needed to where they are. And that is the logic behind why individuals have to take more responsibility. Companies, too, have to make sure they have the right people in the right jobs with the right skill levels. Which is as much about career management as allocation of labour within the company. Today, companies like GE, Dell and AlliedSignal, and Indian companies like Marico, HLL and ICICI (Bank), are struggling to continually identify what constitutes high value-added work, and which of their activities create the greatest value for customers and shareholders.

Can you give us an instance?

Let us say, a company sees an opportunity in an emerging market, but it is not structured to address that market. The question then is: how do you restructure the jobs in your company to bring together the talent needed to address that opportunity? The best example I know is from several years ago. In Microsoft, at one of their annual meetings, a group of folks said: "In future, our products will not be distributed through stores. They will be distributed over the Internet." And everybody else said: "No, that is not gonna happen. You have got it all wrong." But Bill Gates did allow these people to make their business case. Within a week, the company had concluded that the group was correct - there was an opportunity, but the company wasn't organised to distribute its products over the Net. Within another couple of weeks, they pulled in people from different parts of the company to create a new 1,500 person division. That is the kind of speed and resilience that companies have to demonstrate in a changing environment.

If the company is stuck in its traditional career management process, the response will be: "We cannot move this person over here. It is not a part of his career plan." What do you mean it is not a part of his career plan? That job didn't exist two weeks ago! In a stable environment, you knew what a career is going to look like. In a unstable, fast-changing competitive environment, we don't know what it will look like. Therefore, companies have to think in terms of what the market opportunities are, and how their key talents should be allocated to address these opportunities.

Wouldn't that make a lot of individuals feel they have no control in mapping a career of their choice?

The reason they are out of control comes back to what we started with - uncertainty. And you are right, things are uncertain. The most important element in this whole career management issue is: as the world changes, what are the new, key value-added activities our company should be involved in and allocate talent to? Now that sounds reasonably straightforward, except there are some companies that have great talent but aren't organised the right way. Others have great challenges and are organised the right way, but they lack the talent.

Over the last 15 years, GE has probably done the best job in this area. Since the mid-1980s, they have kicked off a series of initiatives - downsizing, delayering, workouts, changing acceleration, Six Sigma. And the thread running through them all is: people throughout the company, not just the top management, can identify low value-added work and suggest how to get rid of it. Similarly, what is high value-added work? And how does a company allot its best talent to it? At GE, people at every level address that question on an ongoing basis. That is one of the reasons why it is so competitive around the world.

In these times of rapid change, often corporate culture, even of supposedly successful firms, becomes an impediment - either coming in the way of a new strategy, or by making the process of adapting to market developments or reengineering difficult. One cannot wish away culture. So how does one create a culture which facilitates change?

Before we discuss culture, we must understand what it really is. Research on culture is concluding that it is a common way of thinking which is translated into common and integrated ways of behaving. It is the collective hard-wiring in the minds of the people. It consists of three primary elements - what we are trying to do, how we are going to get there, and what are the ethical parameters within which we conduct our company. Culture is the extent to which those three elements are shared throughout the company and then translated into how people behave.

Seen like that, no agenda in a company is more important than the cultural agenda because that determines how people behave, how they translate their collective thought patterns into integrated behaviour. We couldn't have had this discussion very intelligently even 10 years ago. We have learnt a lot about culture management - what it is, how to do it, why it is important - only over the last 10 years. That is the foundation.

Culture itself isn't positive or negative. You can have a strong culture that is positive; you can also have a strong culture that is negative. We have done some research and identified two categories of culture. Some companies tend towards a very tightly integrated culture. They are focussed on internal operations, procedures, policies, internal issues like that. Others have externally focussed cultures, where the way people think is based on their awareness of customers, competitors, shareholders, suppliers. They are tightly integrated around the logic of the marketplace. We find the companies with the first type of culture - the internally focussed type - become much less productive over time than externally focussed ones. We live in a world of change. And the culture at high performing companies focusses everybody on identifying, forming and adapting to important trends in the marketplace.

Therefore, the critical issue is not how intense the culture is, but what is the basis of the


culture. Always, it is the externally focussed culture which will survive and thrive over time. Our most recent research shows the most powerful HR and organisational task before companies today is to manage culture effectively. This wasn't true five years ago. In the past, culture just had to be consistent with whatever made people happy and productive. That is the logic of the past. From our research, we have identified three new constituents of culture.
First and foremost, it has to be consistent with the requirements of the marketplace. If a company is traditionally bureaucratic and inwards-focused, and the marketplace has become more competitive, then you need to speed up as well, or you will go out of business.
The second constituent that culture needs is strategy itself. You have to identify what the marketplace wants, and then, given this strategy, what the culture needs to be.

Third, based on the understanding of the marketplace and strategy, how do we frame a cultural vision that will excite any employee? Now, embedded there is the assumption that the culture you need to have is consistent with the desires and capabilities of your employees.

Therefore, the culture you need to have should not only execute your strategy, and meet the needs of the marketplace, but it should also determine the kind of employees you will hire and keep. That is the emerging logic of the new culture management. We used to think it would take more than seven years to change culture in a company. But they cannot afford to wait that long, with enormously competitive firms springing up all over the world. If you are an US software company, you have to benchmark with an Infosys today on how to run a software company. And the issue is you have to ensure your culture is consistent with these emerging competitive pressures.

So what principles can leaders follow to choose the culture that fits the business strategy?

The first principle of culture management is people across the company should be in touch with the marketplace. In the past, most companies didn't think it was worth their time to keep their people in touch with what was going on outside. That is now changing. Companies today recognise that every employee needs to understand the external challenges.

So, the management becomes less of a dictator and more of an orchestrator, conducting a composition which everybody already knows. A number of companies in the pharmaceutical industry work aggressively at keeping their research scientists, product developers, marketing people, production people, in touch with the changing needs of the world. For example, Medtronics invites patients and physicians to its annual meetings, to talk about its products. What the physicians say is of technical and clinical interest. But the passion comes when patients stand before employees and say: "Let me tell you how your product has saved my life, and what I have done with my life which I could not have done without you doing your job." Obviously, such stories have a powerful impact. People go back to their work saying: "Now, I remember what I am doing here, and now I am ready to work extra hard to keep bringing this comfort to people." Medtronics is using the voice of the marketplace to define what its culture should be.

Then, obviously, leadership plays a very important role in culture management. That means (a few) things. First, leaders need to be role models themselves. You cannot say: "I want everyone else to behave like this, but I prefer some other way." Or, "I want everybody to move fast, but I want to be slow, very precise and bureaucratic as that makes me comfortable." That type of leadership, of not walking the talk, is a thing of the past.

Leaders are being measured, rewarded, promoted on how well they identify and promote culture which will make the company successful. So, in addition to results, profitability, market share, time to market and other things, they are also being held accountable for the cultural infrastructure, which will keep the company successful in the future as well.