Team culture and business model alignment means businesses can live forever. In fact, according to Sterling Seagrave's classic book "Lords of the Rim", about Chinese companies in Hong Kong, some offshore Chinese companies have been chartered and in business for thousands of years. However, their team cultures and business models certainly don't look as they did when they began. In some cases, what were once noodle shops have evolved into global electronics manufacturers or banks.
One of the key characteristics of a high-performance enterprise team is the ability to adapt to the environment. To adapt requires continuous innovation. And, continuous innovation requires alignment between top team culture and business model(s).
Top Team Culture Impacts Which Business Model(s) Are Sustainable.
This is another way of stating the law-of-the-lid. The law-of-the-lid states that the level of performance of a team culture and business model can never be sustained at a level higher than the default mindset of a top team’s leaders.
In other words, leadership style is contagious and team culture flows in the direction of hierarchy. A tactical top leader creates a tactical top team, which creates a tactical organization. A top leader who is a context-thinker creates an adaptive top team and innovative organization. In the case of a two-thousand year old family business, I suppose I should say a top family member's mindset creates a thriving family.
So, for example: if meetings regularly bog down, strategies are unclear and key conflicts go unresolved, then ineffective team culture is the current constraint to higher-performance. And, the first place to look is at the default ways-of-thinking and acting of the top leader if you want to evolve an organization's culture.
Business Model(s) Impact The Kind Of Top Team Culture That Is Sustainable.
Conversely, business models can limit the kinds of team cultures that are sustainable. When a business model is broken and as a result, more money is going out then coming in, a team’s culture can quickly switch into survival mode. And in survival mode, innovation stops.
In other words, it is wasted effort to try and ask a starving musician to write a symphony, no matter how talented she is. You need to feed her first.
If Either Team Culture Or Business Model Is Broken Then Innovation Stops And Both Need To Be Aligned
In either scenario, broken culture or broken business model, the net effect is the same. Innovation stops and then eventually growth stops. This is because team culture and business model alignment is essential to making innovation happen.
And, in a changing competitive environment, without innovation, a company’s death is inevitable.
This is a shame, because unlike people (at least for now), with the right conditions, a business enterprise can live for ever. Like you and I are made up of living cells and organs, organizations are made up of people in roles.
Indeed, given the right conditions, an organization can become a kind of living meta-organism, not dependent on any one individual or leader to survive. Over time new people step into play key roles. People may come and go but the organization lives on.
Please comment: What have been your experience with misaligned team cultures and business models? What was the impact on innovation?
Try applying these questions to your team:
- How does our current team culture limit our business model(s)?
- How is our current team culture and extension of the default ways-of-thinking and acting of our team leader?