January 31, 2024 • 31 mins
Ever thought of business strategy as just an elaborate chess match? Think again. Join us as we dive into the heart of strategy and execution, revealing the true force driving your business success: the people crafting your products and services.
Step into the enlightening world of Dr. Ken Baylor, who brings to the fore the often underappreciated power of organizational behavior in sculpting a winning business strategy. Unearth the insight that a company's true pulse isn't just in its numbers, but in its vibrant culture, core values, and nimbleness. Realize the potential of organizational behavior to give your business a distinct edge, moving beyond conventional product differentiation. Navigate through the intricate corridors of hiring practices, thriving workplace cultures, and their transformative power in shaping business trajectories. As we climax with an emphasis on human capital, discover how pooling the collective expertise, insights, and unique characteristics of your team can unlock unparalleled competitive advantages. Get ready for a dose of groundbreaking insights set to redefine your strategic compass.
Dr. Kenneth M. Baylor [Guest] boasts an illustrious career marked by his ability to spearhead organizations through rapid growth and drive enhanced operational effectiveness. As an Executive Officer and Vice President of leading multi-billion dollar service entities, he has championed strategies that cemented competitive advantages. Recognized widely for his leadership, Dr. Baylor has been honored with awards such as the NWRA's “Distinguished Service Award” and SWANA's “Robert L. Lawrence Lecturer Award.” A sought-after keynote speaker, his insights have graced the pages of esteemed journals, with his work on authentic leadership and talent retention standing out. Notably, his contributions to academia are underscored by top-rated courses at Harvard University and other prestigious institutions, reflecting his expertise in leadership, management, and business strategy.
Travis C. Mallett [Host], is a Masters of Liberal Arts (ALM) degree candidate at Harvard University Extension School, where he has also earned Professional Graduate Certificates in both Organizational Behavior and Strategic Management. Travis previously received undergraduate degrees in Electrical Engineering, General Mathematics, and Music from Washington State University. He also served as an Engineering Manager at Schweitzer Engineering Laboratories, where he led a team responsible for developing and maintaining SEL's highest-selling product line. An innovative force in engineering, Travis holds numerous patents and has authored papers and books across diverse subjects. His passion for continuous learning and organizational excellence propels him to explore and illuminate the intricacies of management theories. Through his podcast, "The Management Theory Toolbox", he offers valuable insights on effective leadership, business innovation, and strategic methodologies.
Want to dive in even deeper? Visit the full show notes for this episode.
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Episode Transcript
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Speaker 1 (00:01):
No wonder some people don't want to come back to work
.
It's not meaningful for them tobe there.
We haven't made thatenvironment meaningful for them
either by engaging them andhelping them to feel in on
things.
Speaker 2 (00:13):
And if you don't do those kinds of things,
organizational behavior willdrift and it will drift away
from what your purpose is You'relistening to the Management
Theory Toolbox, your topdestination for unlocking the
nuanced theories that lie behindsophisticated management and
business practices.
I'm your host, travis Mallett,and today we're diving into the
(00:35):
entwined realms of strategy andorganizational behavior.
We've embarked on a quest tounderstand the world of
organizational behavior, or OB,which is a bit like trying to
learn a new dance, and just whenyou think you've got the rhythm
, a new step is introduced.
In our previous episode, weintroduced the concept of
(00:57):
organizational behavior.
While this topic resonates withmany, there are also managers
whose glasses are tinted withthe green dollars of the bottom
line who may find it a tadchallenging to dance to this
particular tune.
In the complex realm of business, the primary aim is usually
clear generating profits.
(01:19):
A business executive deeplyattuned to this reality is often
striving to do right by theirinvestors and guided by the
compass of financial returns.
The stakes are high bonuses,reputation, even future career
moves all dangle in the delicatebalance of that ever important
bottom line.
And admit it, if you're inmanagement or business ownership
(01:42):
, when was the last time youmade a decision based solely on
the financial impact?
And probably around the sametime you accidentally tried to
push a poll-only door.
But where does organizationalbehavior fit in?
To the unacquainted, it mightseem like an abstract art form
in the straightforward world ofbusiness equations, a squishy,
(02:03):
feel-good topic invented bythose unfamiliar with the
ruthlessness of the businessworld.
Why invest in company culture,cultivate employee emotions or
reevaluate hiring strategieswhen competitors are lurking
ready to pounce?
After all, no one wants to bethe company caught tying their
shoelaces in a 100 meter dash.
(02:24):
However, managers nursing theassumption that strategy and
competitive advantage operate indifferent universes than
organizational behavior might bein for a surprise.
That's our topic for today.
How does strategy relate toorganizational behavior, and can
OB truly offer a competitiveadvantage that provides tangible
(02:47):
benefits to your bottom line?
Let's begin with a quickthought experiment.
When you hear the word strategy, what springs to mind For many
of us, it's the timeless game ofchess, the silent dance of
pawns and kings, each movemeticulously planned, eyeing the
ultimate checkmate, and a quickGoogle search shows tons of
(03:11):
articles comparing businessstrategy to the game of chess.
To be a successful businessleader, think like a chess
player seizing the middle chessstrategy in business, how chess
can make you better at businessand 12 lessons on business
strategy from the game of chess.
Speaker 3 (03:32):
Chess teaches us to look at different scenarios.
During a game of chess,depending on if you move the
bishop or the rook, a wholedifferent situation might unfold
in front of you.
The entire game changes, theentire board changes, and so,
too, in the business world.
Any move that you make, anyinvestment that you make, any
decision that you make mightunfold an entire different
scenario.
Learning how to play chess alsoteaches us managers and leaders
(03:54):
how to identify patterns.
So if you want to become abetter manager, if you want to
become a better leader, takehead of chess board, move some
pieces around and learn how toplay chess.
Chess is the ultimateintellectual game.
Being a great chess player withrequired superb strategic
abilities, planning, calculation, pattern recognition and making
good trades All these skillscan be directly translated to
(04:15):
business In the game of chess.
Speaker 4 (04:18):
The average chess player knows their next 1-3
moves.
A grandmaster knows their next11-15 moves.
Most people live life.
They have no clue what theirnext 10 moves are going to be.
Their strategies is what needto tell.
So let's talk about it.
This whole game about businessis about you knowing your next
15 moves.
So what's your game plan?
Who are you going to be?
(04:39):
How are you going to make yourmoney?
Speaker 2 (04:42):
But when you pause and think about it, real life
strategy is less straightforward.
In chess, your pieces movewithout questioning your genius
or lack thereof.
They don't retreat when placedin harms way or abandon their
post when they're sacrificed forthe greater good.
And last I checked RookstonePost passive, aggressive
(05:03):
comments and glass door aboutthe quality of your leadership.
To rephrase this on thepositive side, in chess your
pieces also don't go above andbeyond taking on additional
challenges.
When properly motivated, theydon't creatively contribute to
the strategy and they don'toffer valuable feedback based on
what they're seeing on theground.
(05:24):
They're just cogs in theorganizational machine,
mechanical objects with no humancomplexity.
But this mentality of treatingpeople as merely chess pieces
that should serve our personalor business needs might be even
more disastrous than justoverlooking the complexities of
our business strategy.
Speaker 5 (05:45):
Chess teaches you everything you need to know
about life.
You've got all the piecesaround you.
You've got your queen, yourmost important piece, just the
woman you choose in your lifeYou'd have a deep queen.
Queen needs to be in a goodplace.
She's no baby king.
You've got your brothers.
You've got your boys.
You've got your knights andbishops, the rooks.
You know those are the peoplewho you really care about and
the strongest pieces on yourboard.
And you've got poems, poems ofpeople who work for you or work
(06:05):
with you, or people who aren'tparticularly loyal to you, that
loyal to a page that you'reproviding.
You've got to put everyone inthe right place.
You've got to win the game.
Speaker 2 (06:13):
That was Andrew Tate, a self-proclaimed misogynist
who created a firestorm ofcontroversy over his opinions,
especially his opinionsregarding women, and that
attitude of treating people aspawns in his chess game may have
led him to some darker places.
Speaker 6 (06:30):
Prosecutors in Romania have filed formal
charges against thecontroversial influencer Andrew
Tate, his brother Tristan andtwo Romanian associates.
Details of graphic evidencecompiled by Romanian prosecutors
both Andrew Tate and hisbrother are facing trial in
Romania for human traffickingand forming an organized
(06:51):
criminal group with two otherdefendants.
Speaker 2 (06:54):
Now I want to be clear.
I'm not suggesting that findingparallels between business
strategy and chess ultimatelyleads to psychopathy, racism or
misogyny.
Undoubtedly, chess shares somecharacteristics with business
strategy, since both haveplayers competing for the win
and require deep thinking andprediction ability.
But it's clear that this viewof organizations as machines,
(07:17):
strategy as a chess game andemployees as pieces in the game
overlooks some incrediblyimportant aspects of the
business world.
Reality is a touch moreintricate.
You may be guessing where thisis going.
Organizational behavior is asignificant component of
business strategy.
To help us further explore thistopic, we're joined by Dr Ken
(07:39):
Baylor.
Dr Baylor, welcome to the show.
Speaker 1 (07:43):
Thank you very much, travis.
Glad to be here and appreciatethe privilege of contributing.
Speaker 2 (07:48):
We're thrilled to have you.
Before we start, tell ourlisteners about your background
and work.
Speaker 1 (07:55):
I had a very good executive career with a couple
of companies that we scaled upquickly to multi-billion dollar
organizations and aftercompleting that I transitioned
to my Encore career in teachingand been teaching for about 10
years at Harvard, for the pastfive.
Speaker 2 (08:10):
And I'll just add for our listeners, since they can't
see your video Dr Baylor hashanging behind him in his office
more degrees and certificatesthan I can even count.
Speaker 1 (08:21):
I have a friend that told me one time that I had more
degrees than a thermostat.
Speaker 2 (08:25):
so we're honored to have someone with your
educational and professionalbackground in today's episode.
So we're talking about therelationship between
organizational behavior andstrategy, and sometimes I think
managers get so focused on thebottom line or on navigating
their strategy that they mightsweep organizational behavior
(08:46):
under the rug as thiswishy-washy, fuzzy topic that's
not as important to surviving inthe ruthless business world.
But I think there's probably alot more to that story.
Maybe you can help us unpackthis and start by telling us
what are some components ofcompetitive advantage.
Speaker 1 (09:04):
Competitive advantage is that unique set of
activities that distinguishesyour organization from others.
That is the key piece is to bedifferent.
There's trade-offs and there'scompetitive avoidance blue ocean
type of things but in the endwe're trying to satisfy our
customers' jobs to be done andwe want to retain those
customers.
Operational effectiveness is akey component of strategic
(09:28):
advantage and competitiveadvantage, because it gives you
a cost of management thatexceeds your competitors, and
also the increased efficienciesand logistics can give you a
competitive advantage as well.
Speaker 2 (09:43):
On a surface level, that seems to align with what
many managers probably feel.
Strategy is all about theseefficiencies and creating a
space in the market based onyour product's differences.
So where does organizationalbehavior fit in?
Are those just two completelydifferent topics that don't
really overlap?
Speaker 1 (10:01):
Absolutely not.
I think that organizationalbehavior is fundamental to the
operational efficiencies and theexecution side of the business.
If I were to look at this andthere's a great article by Roger
Martin, the execution track,where he talks about strategy is
the brain, but execution is thehands that go into it I would
see organizational behavior asthe heart of the business.
(10:24):
This goes to the culture, thisgoes to our values, how we do
things around here, and that iscritical to being able to
sustain any competitiveadvantage or to effectuate a
strategy of any kind.
And the alignment of thoseresources goes beyond just our
relationships with our vendorsand our suppliers and our
customers and to our wedeveloping the skills of our
(10:47):
workforce, our core competencies, our learning within the
organization.
Do we have an agilityassociated with that as well,
which is important and it alsokind of backs us up to job one,
if you will, in organizationalbehavior, and that is making
sure that we have the rightpeople on the bus and the right
seats.
That is absolutely essential.
(11:10):
There's no championship coachthat won a championship with bad
players, and it's veryimportant to get the right folks
on the bus that fit yourculture and are treated in a
fair way once they come on board.
It's that critical thinkingthat is essential to the
organizational behavior.
Speaker 2 (11:29):
Would you say that it's possible to differentiate
not just on particular productor service features, but on
organizational behavior itself,maybe choosing your human
capital in such a way that it'sdifferent from competitors, or
creating a workplace culturethat attracts more high-quality
talent?
Can we use organizationalbehavior as a differentiator in
(11:50):
and of itself?
Speaker 1 (11:52):
Absolutely, travis.
I think the organizations thatdon't spend the rigor to bring
the right people on board getthem in the right place.
I'll tell you some interestingstatistics that I spoke about
with the CEO summit the otherday.
The numbers are abysmal when itcomes down to things like
including people and what thestrategy is.
I mean, it's like 7% of thepeople are involved and maybe
(12:14):
32% are actually engaged in theorganization and know what their
job is, what they're actuallysupposed to do, and do they have
the right tools and equipmentto execute on their assignments.
And that came out of a recentreport by Gallup in a book
called the Culture Sock thatcame out in May 2023.
(12:34):
So these are new documents, andit also takes me back to no
wonder some people don't want tocome back to work.
It's not meaningful for them tobe there.
We haven't made thatenvironment meaningful for them
either by engaging them andhelping them to feel in on
things.
And if you don't do those kindsof things, organizational
behavior will drift and it willdrift away from what your
(12:56):
purpose is, and you've got tokeep everyone focused on why
we're here.
Do you want to be here?
Is this the place where you canfulfill your own intrinsic
needs.
One of the examples that I'vegravitated to is when President
Kennedy was visiting Nassau andhe came upon a janitor and he
asked the janitor, during thistour, what is it that you do
(13:17):
here?
And the janitor said I'mhelping to put a man on the moon
.
And I think that was keepingeverybody aligned with the
purpose of what they were doing,regardless of their assignment.
And I don't look at things asbeing my job, your job, my title
.
To me, titles are like nosesEverybody's got one and who
cares?
We're all trying to accomplishsomething, but we all have a
(13:39):
different assignment orresponsibility, and let's just
look at our work in that fashion, and the janitor is just as
important as the person at thetop of the house.
Speaker 2 (13:49):
What common mistakes do businesses make when trying
to meld the principles oforganizational behavior with
strategy?
Speaker 1 (13:57):
The mistake is that they don't include their people.
They see them as employees asopposed to contributors to the
organization and they don'tinclude them.
Those are the people thatreally have to carry out.
We limit it to the seniorexecutives and maybe people in
the boardroom, but we don't takeit down to the people who have
(14:17):
to execute.
I explained to the CEO groupthe other day that I was with If
I had a choice between a greatCEO or a great theme of first
line supervisors, I'll takefirst line supervisors every
single time.
I'm reminded of a story aboutAbraham Lincoln that was told by
Colin Paul.
There was a dispatch given toPresident Lincoln that said the
(14:40):
Confederates have captured ahundred of our horses in one
general.
And reportedly Lincolnresponded it's too bad about
those horses.
And the messenger said whoa,what about the general?
And Lincoln responded I canmake a general in five minutes
or I can't find a hundred horses.
And I think it's the importanceof the people on the shop floor
(15:02):
, if you will, that have to bebetter included in understanding
.
To me, there's no worse day atwork than going to work not
knowing what you're supposed todo and trying to look busy
during the day.
It's no fun.
Speaker 2 (15:15):
So I won't hold you to any predictions here, but
given the rapid changes intoday's business environment,
how do you foresee therelationship between
organizational behavior andstrategy evolving?
What should we be lookingforward to or focusing on going
forward?
Speaker 1 (15:31):
Well, I'll give you a kind of a straight line answer,
and I don't think thefundamentals will change at all.
I think that the circumstancesmay change.
One of the things that I wasreading the other day was Edgar
Shine made a comment.
He was a professor at MIT andthe champion of organizational
behavior and culture withinorganizations wrote many books
(15:51):
on it and he said you know, oneof the things that we have
forgotten, because so many ofour leadership concepts and
theories were developed back inthe 50s and 60s that we've kind
of forgotten that thosefundamentals obtained even today
.
Sometimes we talk about ourcontemporary circumstances and
we think, well, this is a newleadership concept.
When some of them go back toSun Zoo and biblical origin,
(16:14):
serve of leadership, for example, authentic leadership was
something that was talked aboutwhen we were talking about
Transformational leadership.
So I think that the conceptswon't change.
I think the fundamentals ofstrategy and execution will
remain the same.
It's how we apply them indifferent circumstances and the
selection of the arrows in ourquiver that will make the
(16:37):
difference and the judgment thatwe use in which ones that we
pull out of there.
I think that people, no matterwhat, all have a common
denominator they want to do well, they want to be good at work,
and somewhere between theirdesire and our management
practices we sever thatrelationship and people become
disenchanted with us.
(16:58):
And I think it's up to us asleader managers to make sure
that we don't sever thatrelationship, that we include
them in the decision-making andwe learn to say a couple things
that many aren't want to say,and that is I don't know, you're
better at this than me.
You take the lead and have thatself confidence To allow them
(17:20):
to was to step forward and beauthentic in their own
leadership talents.
Frankly, ceos put too muchpressure on themselves to be
that all-knowing, all-tellingbrain at the top of the
organizational chart, and Ithink they have all of these
resources available to them.
The great CEOs Understand thattheir talents are incomplete,
(17:44):
that they need complementarytalents associated with them,
and that's their staff, thentheir senior staff around them.
But beyond that, there arepeople on the concrete floor, if
you will, as opposed to thecarpeted floor, who really are
out there Interacting with thecustomer and one another and our
vendors and suppliers.
(18:05):
What are they hearing?
What are they seeing?
If I were to have a choicebetween sending 10,000 surveys
out to get some feedback, or aCEO going to visit and of my
customers and spending an houror two with each of them.
I would take those interviewsevery single time.
(18:26):
They've got to get out in thefield, they've got to get out on
the shop floor, got to get outof your office and find out what
is on people's minds, and thereare many, many, many good ideas
out there.
We shouldn't hire a person andask them to check their brain at
the door.
We should ask them to come inand give us their talents and
(18:47):
share them with us.
And we don't have to accepteverything.
We don't have to agree witheverything.
There's some things we can't doand some things we will do and
some things we simply don't wantto do.
Let's keep everybody in play asto where their thoughts and
ideas fit in those categories.
No one of us isn't as smart asall of us, so let's take
advantage of all the brains thatwe have in the organization and
(19:09):
quit putting so much pressureon it.
One person at the top Excellent.
Speaker 2 (19:13):
Before we wrap up, what would you say is one of the
most important aspects of OBthat we should pay attention to
when thinking about strategy andcompetitive advantage?
Speaker 1 (19:23):
You know, I think that you make a very good target
of organizational behavior.
I think that we take it forgranted that it will fall into a
place by itself, but there hasto be that influence with a
purpose.
There's no separating strategyor operational effectiveness or
execution from the behavior ofthe organization and the people
(19:45):
and the values they bring to theorganization.
And in that hiring process weshould make sure that the person
we're bringing in wants to bethere, not just have a job, a
continuance commitment, so tospeak, because it's close to
home or whatever.
I understand people take jobswith that reason.
Well, what I want is aneffective commitment.
(20:07):
I want people to say I want tobe here because I believe in
this type of work, I believe inthis organization, I want to
contribute.
So the hiring process, I reallycan't emphasize enough.
That is the most importantthing that you have to do.
You'll never be any better thanyour subordinates.
(20:29):
And at one last anecdote, nickSaban, the coach of the Alabama
Crimson Tide, which is one of myfavorite teams, when he left
the Miami Dolphins, the athleticdirector, as the legend goes,
asked him do you think you hiredthe best coach in the nation?
And the athletic director saidyes, I do.
And he said well, you're wrong.
You hired the best recruiter inthe nation and I think, rather
(20:53):
than viewing things as a hiringprocess, we should look at it as
a recruiting process and to getthe right people that fit with
our organization.
Jim Collins in his book Good toGreat speaks of getting the
right people on the bus in theright seats.
I don't think there's anythingmore critical than that as a
starting point for anyorganization.
Speaker 2 (21:12):
Well, thank you very much for helping us unpack the
relationship between strategyand competitive advantage.
Before we sign off, can youtell our listeners how they can
find you and your work?
Speaker 1 (21:23):
Absolutely.
You can find me at Harvard ormy website at
wwwadvanced-leadershipcom, orI'm on LinkedIn and you can find
me there Anytime I can be ofassistance to anyone who may
hear this.
I'm more than happy to do itand, travis, I can't thank you
enough for inviting me for theopportunity.
Thank you, take care.
Speaker 2 (21:45):
All right, let's dive deeper into the fabric of
competitive advantage.
This coveted business component, which leaders relentlessly
chase to stay ahead in themarketplace, essentially hinges
on differentiation, and bydifferentiation I'm referring to
that unique blend of value.
Our products or services offerto customers something
(22:07):
distinctive, superior or setapart from what competitors
bring to the table.
Occasionally, we see productsor services so groundbreaking
that they're in a league oftheir own, introducing us to
previously non-existent markets.
We call these blue oceanstrategies a topic that we'll
talk about in a later episode.
(22:27):
Remember the iPhone or Cirquedu Soleil, which we touched on
in episode 4?
Both epitomize exemplary blueocean strategies blending of
fresh array of features tounlock a brand new marketplace.
Yet when dissecting yourofferings versus what
competitors serve up andbrainstorming innovative angles
(22:48):
to stand out or appeal to a newdemographic, that's still just
scratching the surface.
Regular listeners will knowthat we never settle for
standard textbook answers.
Here at the Management TheoryToolbox, we're on a quest to
uncover the layers beneath.
Let's ponder what's the magicbehind the products we unveil to
(23:09):
our audience?
What sways our customerstowards us?
What ignites their need for ourproduct?
Dive into the realm ofstructuralism, a philosophical
lens to entangle these threads,although it may not be as trendy
as its counterparts likepost-structuralism or
deconstruction today, it's stilla gem for our exploration.
(23:30):
To discover this, let's travelback about 200 years.
Picture 19th century Franceclouded in perplexity.
Speaker 5 (23:43):
In what way did he wrong you?
With his dirty hands, he gaveher fever.
Speaker 2 (23:50):
Childish fever, but you can't blame a doctor for
that.
A wave of illnesses,deteriorating wines and
prematurely spoiling milk.
An unseen adversary seemed towreck havoc.
Amidst this confusion emerges achemist, a figure of relentless
inquiry and astute observation.
Speaker 6 (24:12):
These are mere chemists, not the chemists you
don't say.
Speaker 5 (24:16):
You remember, a few years ago you was the cause of a
slight controversy on thesubject of sour wine.
Speaker 6 (24:21):
Oh yes, I recall he claimed to have found little
animals in it.
Infinite decimal piece.
But are there such creatures?
Do they really exist, yourMajesty?
Microscopic organisms have longbeen observed.
They spring into being of theirown accord.
Wherever there is putrid matterof fermentation, they're the
result, rather than the cause,of disease.
Speaker 2 (24:41):
Dismissing the beliefs attributing disease to
divine acts or naturalspontaneity.
He dared to challenge thestatus quo.
Speaker 6 (24:51):
Dr Charbonnet could see them for himself.
He took the trouble to use hismicroscope.
He could watch them multiplyinto murderous millions.
They'd breed in filth.
They may start from the guttersof Paris tonight and by
tomorrow, claim some mother fromthis very core.
Speaker 2 (25:07):
Capostus that my friends was Louis Pasteur, as
vividly captured by Paul Mooneyin the 1936 film the Story of
Louis Pasteur.
Pasteur, a staunch believer inthe determinism of nature, made
a groundbreaking discovery.
Hearing through his microscope,he was introduced to a world
(25:28):
teaming with minuscule lifeforms, or microbes, omnipresent
in the environment, in our foodand even in the most exquisite
wines.
An epiphany dawned upon himCould these minuscule beings be
responsible for the prevailingchaos?
Determined to confirm hishypothesis, pasteur embarked on
(25:50):
rigorous experiments.
The revelation was profoundAirborne microbes were the
culprits.
Pasteur's insight wastransformative, reshaping our
perception of illness and decay,which were no longer dismissed
as mere chance events.
They had a discernible origingerms.
This breakthrough flung openpathways to combat a spectrum of
(26:13):
diseases.
Louis Pasteur, with hisunparalleled tenacity and
pioneering spirit, shed light ona realm previously uncharted.
He didn't merely decode theenigma of perishable food and
drink, but laid the cornerstonefor contemporary medicine.
What is structuralism?
Imagine a complex puzzle, eachpiece unique in distinct Toll's
(26:37):
value, but it's only when thesepieces interlock that a complete
picture emerges.
Similarly, in the businessworld, understanding the
underlying structures ofpatterns can offer more profound
insights into success andfailure.
Let's explore how thisphilosophical concept applies to
business differentiation,structuralism plunges deep into
(27:00):
the vast ocean of human culture,viewing its many components as
interrelated facets of a broadernetwork.
One isolated element, whether acultural ritual or a business
practice, gains its full meaningwhen viewed in connection to
others, where Simon Blackburnbelieves that to truly grasp
human life's nuances, we mustunderstand how individual
(27:23):
phenomena intersect andinfluence one another.
If we consider a solitary danceand then an orchestra, while
outwardly differentstructuralism looks for the
rhythms and patterns resonatingwithin both.
Applying this to the corporatelandscape, we see that
differentiation for competitiveadvantage is only the tip of the
(27:44):
iceberg.
At the management theorytoolbox, we delve deeper.
We probe not just why somecompanies thrive, but what
foundational structures fosterthat differentiation.
A key element Organizationalbehavior.
Just like pastures, microbeswere found to be the cause of
many diseases, it's theorganization's people, the human
(28:06):
capital, the spark innovationand drive operational excellence
.
If a company's products mirrorits people, then harnessing
human capital can offer a uniquecompetitive advantage.
Now, if you're a businessleader always striving for
product differentiation,consider this shift in
perspective.
Instead of continuouslyapplying differentiation
(28:30):
band-aids to banal products, whynot change the source of your
business's products?
What if you nurtured a culturethat prioritized employee
satisfaction, innovation andcreativity.
If your enterprise couldattract talent unparalleled by
competitors, wouldn't yourproducts naturally stand out?
(28:50):
This line of thought brings usto a systematic answer Human
capital's role in competitiveadvantage.
Human capital simply means theskills, knowledge and attributes
of an organization'sindividuals.
Its potential lies in its value, rarity and how challenging it
is to replicate.
Value gauges an individual'scapability to handle fundamental
(29:13):
tasks.
Rarity evaluates how unique thecollective skills are within an
industry.
For example, sales associatesat Nordstrom have several
qualities that are relativelyrare in the retailing industry.
For one, they are highlyeducated.
Nordstrom specifically targetscollege graduates for its
entry-level positions.
They also provide a strong,incentive-based compensation
(29:36):
system, paying much higher thanthe industry average, and
cultivate a culture ofassociates going above and
beyond for customers, providingacts of quote heroic service.
Lastly, immatability measuresthe replicability of the skills
by the competitors.
For example, a competingretailer could also target
(29:56):
college graduates and usesimilar compensation structures,
but the skills and talents thatare most difficult to imitate
are usually those that arecomplex and learned inside a
particular organization.
Though value, rarity andimmatability are pivotal, they
aren't standalone solutions.
Organizations must also ensurethat their human resources are
(30:19):
motivated, supported and aptlytrained.
If you're an entrepreneur or amanager focused on the bottom
line, then you're in luck.
There is a way to predictablyimprove the bottom line and
increase competitive advantage.
But it's not easy and that'swhy we're going to be continuing
our journey of organizationalbehavior so that next time
(30:40):
you're faced with a decisionthat affects the bottom line,
you can also consider themultitude of related
organizational behavior factorsand tools needed to sustain that
competitive advantage.
With that, thank you for tuningin to the Management Theory
Toolbox, your top-dust nationfor the behind-the-scenes of
(31:01):
management and business theory.
As always, each episode isbased on the latest and most
robust management theory and youcan download the show notes to
find references and learn more.
And join us next time for adeeper exploration of
organizational behavior and itsrelation to positive psychology.
In the meantime, keep learning,keep growing and keep building
(31:24):
your management theory toolbox.
No wonder some people don't want to come back to work
.
It's not meaningful for them tobe there.
We haven't made thatenvironment meaningful for them
either by engaging them andhelping them to feel in on
things.
Speaker 2 (00:13):
And if you don't do those kinds of things,
organizational behavior willdrift and it will drift away
from what your purpose is You'relistening to the Management
Theory Toolbox, your topdestination for unlocking the
nuanced theories that lie behindsophisticated management and
business practices.
I'm your host, travis Mallett,and today we're diving into the
(00:35):
entwined realms of strategy andorganizational behavior.
We've embarked on a quest tounderstand the world of
organizational behavior, or OB,which is a bit like trying to
learn a new dance, and just whenyou think you've got the rhythm
, a new step is introduced.
In our previous episode, weintroduced the concept of
(00:57):
organizational behavior.
While this topic resonates withmany, there are also managers
whose glasses are tinted withthe green dollars of the bottom
line who may find it a tadchallenging to dance to this
particular tune.
In the complex realm of business, the primary aim is usually
clear generating profits.
(01:19):
A business executive deeplyattuned to this reality is often
striving to do right by theirinvestors and guided by the
compass of financial returns.
The stakes are high bonuses,reputation, even future career
moves all dangle in the delicatebalance of that ever important
bottom line.
And admit it, if you're inmanagement or business ownership
(01:42):
, when was the last time youmade a decision based solely on
the financial impact?
And probably around the sametime you accidentally tried to
push a poll-only door.
But where does organizationalbehavior fit in?
To the unacquainted, it mightseem like an abstract art form
in the straightforward world ofbusiness equations, a squishy,
(02:03):
feel-good topic invented bythose unfamiliar with the
ruthlessness of the businessworld.
Why invest in company culture,cultivate employee emotions or
reevaluate hiring strategieswhen competitors are lurking
ready to pounce?
After all, no one wants to bethe company caught tying their
shoelaces in a 100 meter dash.
(02:24):
However, managers nursing theassumption that strategy and
competitive advantage operate indifferent universes than
organizational behavior might bein for a surprise.
That's our topic for today.
How does strategy relate toorganizational behavior, and can
OB truly offer a competitiveadvantage that provides tangible
(02:47):
benefits to your bottom line?
Let's begin with a quickthought experiment.
When you hear the word strategy, what springs to mind For many
of us, it's the timeless game ofchess, the silent dance of
pawns and kings, each movemeticulously planned, eyeing the
ultimate checkmate, and a quickGoogle search shows tons of
(03:11):
articles comparing businessstrategy to the game of chess.
To be a successful businessleader, think like a chess
player seizing the middle chessstrategy in business, how chess
can make you better at businessand 12 lessons on business
strategy from the game of chess.
Speaker 3 (03:32):
Chess teaches us to look at different scenarios.
During a game of chess,depending on if you move the
bishop or the rook, a wholedifferent situation might unfold
in front of you.
The entire game changes, theentire board changes, and so,
too, in the business world.
Any move that you make, anyinvestment that you make, any
decision that you make mightunfold an entire different
scenario.
Learning how to play chess alsoteaches us managers and leaders
(03:54):
how to identify patterns.
So if you want to become abetter manager, if you want to
become a better leader, takehead of chess board, move some
pieces around and learn how toplay chess.
Chess is the ultimateintellectual game.
Being a great chess player withrequired superb strategic
abilities, planning, calculation, pattern recognition and making
good trades All these skillscan be directly translated to
(04:15):
business In the game of chess.
Speaker 4 (04:18):
The average chess player knows their next 1-3
moves.
A grandmaster knows their next11-15 moves.
Most people live life.
They have no clue what theirnext 10 moves are going to be.
Their strategies is what needto tell.
So let's talk about it.
This whole game about businessis about you knowing your next
15 moves.
So what's your game plan?
Who are you going to be?
(04:39):
How are you going to make yourmoney?
Speaker 2 (04:42):
But when you pause and think about it, real life
strategy is less straightforward.
In chess, your pieces movewithout questioning your genius
or lack thereof.
They don't retreat when placedin harms way or abandon their
post when they're sacrificed forthe greater good.
And last I checked RookstonePost passive, aggressive
(05:03):
comments and glass door aboutthe quality of your leadership.
To rephrase this on thepositive side, in chess your
pieces also don't go above andbeyond taking on additional
challenges.
When properly motivated, theydon't creatively contribute to
the strategy and they don'toffer valuable feedback based on
what they're seeing on theground.
(05:24):
They're just cogs in theorganizational machine,
mechanical objects with no humancomplexity.
But this mentality of treatingpeople as merely chess pieces
that should serve our personalor business needs might be even
more disastrous than justoverlooking the complexities of
our business strategy.
Speaker 5 (05:45):
Chess teaches you everything you need to know
about life.
You've got all the piecesaround you.
You've got your queen, yourmost important piece, just the
woman you choose in your lifeYou'd have a deep queen.
Queen needs to be in a goodplace.
She's no baby king.
You've got your brothers.
You've got your boys.
You've got your knights andbishops, the rooks.
You know those are the peoplewho you really care about and
the strongest pieces on yourboard.
And you've got poems, poems ofpeople who work for you or work
(06:05):
with you, or people who aren'tparticularly loyal to you, that
loyal to a page that you'reproviding.
You've got to put everyone inthe right place.
You've got to win the game.
Speaker 2 (06:13):
That was Andrew Tate, a self-proclaimed misogynist
who created a firestorm ofcontroversy over his opinions,
especially his opinionsregarding women, and that
attitude of treating people aspawns in his chess game may have
led him to some darker places.
Speaker 6 (06:30):
Prosecutors in Romania have filed formal
charges against thecontroversial influencer Andrew
Tate, his brother Tristan andtwo Romanian associates.
Details of graphic evidencecompiled by Romanian prosecutors
both Andrew Tate and hisbrother are facing trial in
Romania for human traffickingand forming an organized
(06:51):
criminal group with two otherdefendants.
Speaker 2 (06:54):
Now I want to be clear.
I'm not suggesting that findingparallels between business
strategy and chess ultimatelyleads to psychopathy, racism or
misogyny.
Undoubtedly, chess shares somecharacteristics with business
strategy, since both haveplayers competing for the win
and require deep thinking andprediction ability.
But it's clear that this viewof organizations as machines,
(07:17):
strategy as a chess game andemployees as pieces in the game
overlooks some incrediblyimportant aspects of the
business world.
Reality is a touch moreintricate.
You may be guessing where thisis going.
Organizational behavior is asignificant component of
business strategy.
To help us further explore thistopic, we're joined by Dr Ken
(07:39):
Baylor.
Dr Baylor, welcome to the show.
Speaker 1 (07:43):
Thank you very much, travis.
Glad to be here and appreciatethe privilege of contributing.
Speaker 2 (07:48):
We're thrilled to have you.
Before we start, tell ourlisteners about your background
and work.
Speaker 1 (07:55):
I had a very good executive career with a couple
of companies that we scaled upquickly to multi-billion dollar
organizations and aftercompleting that I transitioned
to my Encore career in teachingand been teaching for about 10
years at Harvard, for the pastfive.
Speaker 2 (08:10):
And I'll just add for our listeners, since they can't
see your video Dr Baylor hashanging behind him in his office
more degrees and certificatesthan I can even count.
Speaker 1 (08:21):
I have a friend that told me one time that I had more
degrees than a thermostat.
Speaker 2 (08:25):
so we're honored to have someone with your
educational and professionalbackground in today's episode.
So we're talking about therelationship between
organizational behavior andstrategy, and sometimes I think
managers get so focused on thebottom line or on navigating
their strategy that they mightsweep organizational behavior
(08:46):
under the rug as thiswishy-washy, fuzzy topic that's
not as important to surviving inthe ruthless business world.
But I think there's probably alot more to that story.
Maybe you can help us unpackthis and start by telling us
what are some components ofcompetitive advantage.
Speaker 1 (09:04):
Competitive advantage is that unique set of
activities that distinguishesyour organization from others.
That is the key piece is to bedifferent.
There's trade-offs and there'scompetitive avoidance blue ocean
type of things but in the endwe're trying to satisfy our
customers' jobs to be done andwe want to retain those
customers.
Operational effectiveness is akey component of strategic
(09:28):
advantage and competitiveadvantage, because it gives you
a cost of management thatexceeds your competitors, and
also the increased efficienciesand logistics can give you a
competitive advantage as well.
Speaker 2 (09:43):
On a surface level, that seems to align with what
many managers probably feel.
Strategy is all about theseefficiencies and creating a
space in the market based onyour product's differences.
So where does organizationalbehavior fit in?
Are those just two completelydifferent topics that don't
really overlap?
Speaker 1 (10:01):
Absolutely not.
I think that organizationalbehavior is fundamental to the
operational efficiencies and theexecution side of the business.
If I were to look at this andthere's a great article by Roger
Martin, the execution track,where he talks about strategy is
the brain, but execution is thehands that go into it I would
see organizational behavior asthe heart of the business.
(10:24):
This goes to the culture, thisgoes to our values, how we do
things around here, and that iscritical to being able to
sustain any competitiveadvantage or to effectuate a
strategy of any kind.
And the alignment of thoseresources goes beyond just our
relationships with our vendorsand our suppliers and our
customers and to our wedeveloping the skills of our
(10:47):
workforce, our core competencies, our learning within the
organization.
Do we have an agilityassociated with that as well,
which is important and it alsokind of backs us up to job one,
if you will, in organizationalbehavior, and that is making
sure that we have the rightpeople on the bus and the right
seats.
That is absolutely essential.
(11:10):
There's no championship coachthat won a championship with bad
players, and it's veryimportant to get the right folks
on the bus that fit yourculture and are treated in a
fair way once they come on board.
It's that critical thinkingthat is essential to the
organizational behavior.
Speaker 2 (11:29):
Would you say that it's possible to differentiate
not just on particular productor service features, but on
organizational behavior itself,maybe choosing your human
capital in such a way that it'sdifferent from competitors, or
creating a workplace culturethat attracts more high-quality
talent?
Can we use organizationalbehavior as a differentiator in
(11:50):
and of itself?
Speaker 1 (11:52):
Absolutely, travis.
I think the organizations thatdon't spend the rigor to bring
the right people on board getthem in the right place.
I'll tell you some interestingstatistics that I spoke about
with the CEO summit the otherday.
The numbers are abysmal when itcomes down to things like
including people and what thestrategy is.
I mean, it's like 7% of thepeople are involved and maybe
(12:14):
32% are actually engaged in theorganization and know what their
job is, what they're actuallysupposed to do, and do they have
the right tools and equipmentto execute on their assignments.
And that came out of a recentreport by Gallup in a book
called the Culture Sock thatcame out in May 2023.
(12:34):
So these are new documents, andit also takes me back to no
wonder some people don't want tocome back to work.
It's not meaningful for them tobe there.
We haven't made thatenvironment meaningful for them
either by engaging them andhelping them to feel in on
things.
And if you don't do those kindsof things, organizational
behavior will drift and it willdrift away from what your
(12:56):
purpose is, and you've got tokeep everyone focused on why
we're here.
Do you want to be here?
Is this the place where you canfulfill your own intrinsic
needs.
One of the examples that I'vegravitated to is when President
Kennedy was visiting Nassau andhe came upon a janitor and he
asked the janitor, during thistour, what is it that you do
(13:17):
here?
And the janitor said I'mhelping to put a man on the moon
.
And I think that was keepingeverybody aligned with the
purpose of what they were doing,regardless of their assignment.
And I don't look at things asbeing my job, your job, my title
.
To me, titles are like nosesEverybody's got one and who
cares?
We're all trying to accomplishsomething, but we all have a
(13:39):
different assignment orresponsibility, and let's just
look at our work in that fashion, and the janitor is just as
important as the person at thetop of the house.
Speaker 2 (13:49):
What common mistakes do businesses make when trying
to meld the principles oforganizational behavior with
strategy?
Speaker 1 (13:57):
The mistake is that they don't include their people.
They see them as employees asopposed to contributors to the
organization and they don'tinclude them.
Those are the people thatreally have to carry out.
We limit it to the seniorexecutives and maybe people in
the boardroom, but we don't takeit down to the people who have
(14:17):
to execute.
I explained to the CEO groupthe other day that I was with If
I had a choice between a greatCEO or a great theme of first
line supervisors, I'll takefirst line supervisors every
single time.
I'm reminded of a story aboutAbraham Lincoln that was told by
Colin Paul.
There was a dispatch given toPresident Lincoln that said the
(14:40):
Confederates have captured ahundred of our horses in one
general.
And reportedly Lincolnresponded it's too bad about
those horses.
And the messenger said whoa,what about the general?
And Lincoln responded I canmake a general in five minutes
or I can't find a hundred horses.
And I think it's the importanceof the people on the shop floor
(15:02):
, if you will, that have to bebetter included in understanding
.
To me, there's no worse day atwork than going to work not
knowing what you're supposed todo and trying to look busy
during the day.
It's no fun.
Speaker 2 (15:15):
So I won't hold you to any predictions here, but
given the rapid changes intoday's business environment,
how do you foresee therelationship between
organizational behavior andstrategy evolving?
What should we be lookingforward to or focusing on going
forward?
Speaker 1 (15:31):
Well, I'll give you a kind of a straight line answer,
and I don't think thefundamentals will change at all.
I think that the circumstancesmay change.
One of the things that I wasreading the other day was Edgar
Shine made a comment.
He was a professor at MIT andthe champion of organizational
behavior and culture withinorganizations wrote many books
(15:51):
on it and he said you know, oneof the things that we have
forgotten, because so many ofour leadership concepts and
theories were developed back inthe 50s and 60s that we've kind
of forgotten that thosefundamentals obtained even today
.
Sometimes we talk about ourcontemporary circumstances and
we think, well, this is a newleadership concept.
When some of them go back toSun Zoo and biblical origin,
(16:14):
serve of leadership, for example, authentic leadership was
something that was talked aboutwhen we were talking about
Transformational leadership.
So I think that the conceptswon't change.
I think the fundamentals ofstrategy and execution will
remain the same.
It's how we apply them indifferent circumstances and the
selection of the arrows in ourquiver that will make the
(16:37):
difference and the judgment thatwe use in which ones that we
pull out of there.
I think that people, no matterwhat, all have a common
denominator they want to do well, they want to be good at work,
and somewhere between theirdesire and our management
practices we sever thatrelationship and people become
disenchanted with us.
(16:58):
And I think it's up to us asleader managers to make sure
that we don't sever thatrelationship, that we include
them in the decision-making andwe learn to say a couple things
that many aren't want to say,and that is I don't know, you're
better at this than me.
You take the lead and have thatself confidence To allow them
(17:20):
to was to step forward and beauthentic in their own
leadership talents.
Frankly, ceos put too muchpressure on themselves to be
that all-knowing, all-tellingbrain at the top of the
organizational chart, and Ithink they have all of these
resources available to them.
The great CEOs Understand thattheir talents are incomplete,
(17:44):
that they need complementarytalents associated with them,
and that's their staff, thentheir senior staff around them.
But beyond that, there arepeople on the concrete floor, if
you will, as opposed to thecarpeted floor, who really are
out there Interacting with thecustomer and one another and our
vendors and suppliers.
(18:05):
What are they hearing?
What are they seeing?
If I were to have a choicebetween sending 10,000 surveys
out to get some feedback, or aCEO going to visit and of my
customers and spending an houror two with each of them.
I would take those interviewsevery single time.
(18:26):
They've got to get out in thefield, they've got to get out on
the shop floor, got to get outof your office and find out what
is on people's minds, and thereare many, many, many good ideas
out there.
We shouldn't hire a person andask them to check their brain at
the door.
We should ask them to come inand give us their talents and
(18:47):
share them with us.
And we don't have to accepteverything.
We don't have to agree witheverything.
There's some things we can't doand some things we will do and
some things we simply don't wantto do.
Let's keep everybody in play asto where their thoughts and
ideas fit in those categories.
No one of us isn't as smart asall of us, so let's take
advantage of all the brains thatwe have in the organization and
(19:09):
quit putting so much pressureon it.
One person at the top Excellent.
Speaker 2 (19:13):
Before we wrap up, what would you say is one of the
most important aspects of OBthat we should pay attention to
when thinking about strategy andcompetitive advantage?
Speaker 1 (19:23):
You know, I think that you make a very good target
of organizational behavior.
I think that we take it forgranted that it will fall into a
place by itself, but there hasto be that influence with a
purpose.
There's no separating strategyor operational effectiveness or
execution from the behavior ofthe organization and the people
(19:45):
and the values they bring to theorganization.
And in that hiring process weshould make sure that the person
we're bringing in wants to bethere, not just have a job, a
continuance commitment, so tospeak, because it's close to
home or whatever.
I understand people take jobswith that reason.
Well, what I want is aneffective commitment.
(20:07):
I want people to say I want tobe here because I believe in
this type of work, I believe inthis organization, I want to
contribute.
So the hiring process, I reallycan't emphasize enough.
That is the most importantthing that you have to do.
You'll never be any better thanyour subordinates.
(20:29):
And at one last anecdote, nickSaban, the coach of the Alabama
Crimson Tide, which is one of myfavorite teams, when he left
the Miami Dolphins, the athleticdirector, as the legend goes,
asked him do you think you hiredthe best coach in the nation?
And the athletic director saidyes, I do.
And he said well, you're wrong.
You hired the best recruiter inthe nation and I think, rather
(20:53):
than viewing things as a hiringprocess, we should look at it as
a recruiting process and to getthe right people that fit with
our organization.
Jim Collins in his book Good toGreat speaks of getting the
right people on the bus in theright seats.
I don't think there's anythingmore critical than that as a
starting point for anyorganization.
Speaker 2 (21:12):
Well, thank you very much for helping us unpack the
relationship between strategyand competitive advantage.
Before we sign off, can youtell our listeners how they can
find you and your work?
Speaker 1 (21:23):
Absolutely.
You can find me at Harvard ormy website at
wwwadvanced-leadershipcom, orI'm on LinkedIn and you can find
me there Anytime I can be ofassistance to anyone who may
hear this.
I'm more than happy to do itand, travis, I can't thank you
enough for inviting me for theopportunity.
Thank you, take care.
Speaker 2 (21:45):
All right, let's dive deeper into the fabric of
competitive advantage.
This coveted business component, which leaders relentlessly
chase to stay ahead in themarketplace, essentially hinges
on differentiation, and bydifferentiation I'm referring to
that unique blend of value.
Our products or services offerto customers something
(22:07):
distinctive, superior or setapart from what competitors
bring to the table.
Occasionally, we see productsor services so groundbreaking
that they're in a league oftheir own, introducing us to
previously non-existent markets.
We call these blue oceanstrategies a topic that we'll
talk about in a later episode.
(22:27):
Remember the iPhone or Cirquedu Soleil, which we touched on
in episode 4?
Both epitomize exemplary blueocean strategies blending of
fresh array of features tounlock a brand new marketplace.
Yet when dissecting yourofferings versus what
competitors serve up andbrainstorming innovative angles
(22:48):
to stand out or appeal to a newdemographic, that's still just
scratching the surface.
Regular listeners will knowthat we never settle for
standard textbook answers.
Here at the Management TheoryToolbox, we're on a quest to
uncover the layers beneath.
Let's ponder what's the magicbehind the products we unveil to
(23:09):
our audience?
What sways our customerstowards us?
What ignites their need for ourproduct?
Dive into the realm ofstructuralism, a philosophical
lens to entangle these threads,although it may not be as trendy
as its counterparts likepost-structuralism or
deconstruction today, it's stilla gem for our exploration.
(23:30):
To discover this, let's travelback about 200 years.
Picture 19th century Franceclouded in perplexity.
Speaker 5 (23:43):
In what way did he wrong you?
With his dirty hands, he gaveher fever.
Speaker 2 (23:50):
Childish fever, but you can't blame a doctor for
that.
A wave of illnesses,deteriorating wines and
prematurely spoiling milk.
An unseen adversary seemed towreck havoc.
Amidst this confusion emerges achemist, a figure of relentless
inquiry and astute observation.
Speaker 6 (24:12):
These are mere chemists, not the chemists you
don't say.
Speaker 5 (24:16):
You remember, a few years ago you was the cause of a
slight controversy on thesubject of sour wine.
Speaker 6 (24:21):
Oh yes, I recall he claimed to have found little
animals in it.
Infinite decimal piece.
But are there such creatures?
Do they really exist, yourMajesty?
Microscopic organisms have longbeen observed.
They spring into being of theirown accord.
Wherever there is putrid matterof fermentation, they're the
result, rather than the cause,of disease.
Speaker 2 (24:41):
Dismissing the beliefs attributing disease to
divine acts or naturalspontaneity.
He dared to challenge thestatus quo.
Speaker 6 (24:51):
Dr Charbonnet could see them for himself.
He took the trouble to use hismicroscope.
He could watch them multiplyinto murderous millions.
They'd breed in filth.
They may start from the guttersof Paris tonight and by
tomorrow, claim some mother fromthis very core.
Speaker 2 (25:07):
Capostus that my friends was Louis Pasteur, as
vividly captured by Paul Mooneyin the 1936 film the Story of
Louis Pasteur.
Pasteur, a staunch believer inthe determinism of nature, made
a groundbreaking discovery.
Hearing through his microscope,he was introduced to a world
(25:28):
teaming with minuscule lifeforms, or microbes, omnipresent
in the environment, in our foodand even in the most exquisite
wines.
An epiphany dawned upon himCould these minuscule beings be
responsible for the prevailingchaos?
Determined to confirm hishypothesis, pasteur embarked on
(25:50):
rigorous experiments.
The revelation was profoundAirborne microbes were the
culprits.
Pasteur's insight wastransformative, reshaping our
perception of illness and decay,which were no longer dismissed
as mere chance events.
They had a discernible origingerms.
This breakthrough flung openpathways to combat a spectrum of
(26:13):
diseases.
Louis Pasteur, with hisunparalleled tenacity and
pioneering spirit, shed light ona realm previously uncharted.
He didn't merely decode theenigma of perishable food and
drink, but laid the cornerstonefor contemporary medicine.
What is structuralism?
Imagine a complex puzzle, eachpiece unique in distinct Toll's
(26:37):
value, but it's only when thesepieces interlock that a complete
picture emerges.
Similarly, in the businessworld, understanding the
underlying structures ofpatterns can offer more profound
insights into success andfailure.
Let's explore how thisphilosophical concept applies to
business differentiation,structuralism plunges deep into
(27:00):
the vast ocean of human culture,viewing its many components as
interrelated facets of a broadernetwork.
One isolated element, whether acultural ritual or a business
practice, gains its full meaningwhen viewed in connection to
others, where Simon Blackburnbelieves that to truly grasp
human life's nuances, we mustunderstand how individual
(27:23):
phenomena intersect andinfluence one another.
If we consider a solitary danceand then an orchestra, while
outwardly differentstructuralism looks for the
rhythms and patterns resonatingwithin both.
Applying this to the corporatelandscape, we see that
differentiation for competitiveadvantage is only the tip of the
(27:44):
iceberg.
At the management theorytoolbox, we delve deeper.
We probe not just why somecompanies thrive, but what
foundational structures fosterthat differentiation.
A key element Organizationalbehavior.
Just like pastures, microbeswere found to be the cause of
many diseases, it's theorganization's people, the human
(28:06):
capital, the spark innovationand drive operational excellence
.
If a company's products mirrorits people, then harnessing
human capital can offer a uniquecompetitive advantage.
Now, if you're a businessleader always striving for
product differentiation,consider this shift in
perspective.
Instead of continuouslyapplying differentiation
(28:30):
band-aids to banal products, whynot change the source of your
business's products?
What if you nurtured a culturethat prioritized employee
satisfaction, innovation andcreativity.
If your enterprise couldattract talent unparalleled by
competitors, wouldn't yourproducts naturally stand out?
(28:50):
This line of thought brings usto a systematic answer Human
capital's role in competitiveadvantage.
Human capital simply means theskills, knowledge and attributes
of an organization'sindividuals.
Its potential lies in its value, rarity and how challenging it
is to replicate.
Value gauges an individual'scapability to handle fundamental
(29:13):
tasks.
Rarity evaluates how unique thecollective skills are within an
industry.
For example, sales associatesat Nordstrom have several
qualities that are relativelyrare in the retailing industry.
For one, they are highlyeducated.
Nordstrom specifically targetscollege graduates for its
entry-level positions.
They also provide a strong,incentive-based compensation
(29:36):
system, paying much higher thanthe industry average, and
cultivate a culture ofassociates going above and
beyond for customers, providingacts of quote heroic service.
Lastly, immatability measuresthe replicability of the skills
by the competitors.
For example, a competingretailer could also target
(29:56):
college graduates and usesimilar compensation structures,
but the skills and talents thatare most difficult to imitate
are usually those that arecomplex and learned inside a
particular organization.
Though value, rarity andimmatability are pivotal, they
aren't standalone solutions.
Organizations must also ensurethat their human resources are
(30:19):
motivated, supported and aptlytrained.
If you're an entrepreneur or amanager focused on the bottom
line, then you're in luck.
There is a way to predictablyimprove the bottom line and
increase competitive advantage.
But it's not easy and that'swhy we're going to be continuing
our journey of organizationalbehavior so that next time
(30:40):
you're faced with a decisionthat affects the bottom line,
you can also consider themultitude of related
organizational behavior factorsand tools needed to sustain that
competitive advantage.
With that, thank you for tuningin to the Management Theory
Toolbox, your top-dust nationfor the behind-the-scenes of
(31:01):
management and business theory.
As always, each episode isbased on the latest and most
robust management theory and youcan download the show notes to
find references and learn more.
And join us next time for adeeper exploration of
organizational behavior and itsrelation to positive psychology.
In the meantime, keep learning,keep growing and keep building
(31:24):
your management theory toolbox.
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