What is your view, Professor Yıldırım-Öktem?
What is your view, Professor Yıldırım-Öktem?
Entrepreneurship is now taught at undergraduate and graduate levels; it’s even one of the mandatory undergraduate courses in my department. We live in an age where information grows old very quickly, so we try to give our students a perspective: how to sniff something out, for example, how to keep abreast of innovations, where to gather data, and how to work with it. We try to provide academic training of this kind. Many universities also have entrepreneurship centers where they offer support not just in finance and infrastructure but also guidance, for example, self awareness training, career planning with role models, and motivation and support programs. There are also twinning programs to help students with their social network. The target audience isn’t just university students; there are activities for high school students, too.
I absolutely agree with what you said about entrepreneurship in a company. An entrepreneurial attitude is just as important for company employees as it is for independent entrepreneurs. But you need the right base, and the company culture must allow it as well. The organizational structure shouldn’t hinder creative thinking. Some things you can do to promote creativity and internal communication are relaxing control over staff, permitting a freer and more flexible working environment, reducing red tape, encouraging multi-dimensional communication, replacing hierarchical controls with a corporate culture, and putting people with different attributes on project teams. Research shows that employees are willing to allocate time to activities that require creativity even in the absence of financial rewards.
Can we move to the subject of “corporate culture,” another important concept? At Eczacıbaşı, we’ve gone through several stages in this area, learned some lessons, and tried to achieve some things. In some areas we were successful, in others less so.
The business world needs to add more meaning to people’s lives as well as provide them with an income. This gap can be filled by companies with a mission and vision that go beyond making a profit and corporate cultures that embody certain values. For a company to offer meaning as well as income, it has to have a “soul” with mission, vision, goals and policies clearly defined. All this forms the basis of a corporate culture.
Our group has paid a great deal of attention to defining the soul of our brand. The most intense work in this area took place immediately after the death of our founder, Nejat Eczacıbaşı. We were aware, of course, that we had a powerful corporate culture, but its fundamental principles hadn’t been put into writing. We decided to do that without delay because the entire body of senior management had worked with him. What sort of a man was our founder, and what values did he give us? Which of them will remain relevant, and which have to change? What’s our mission in your view? These were the types of questions we deliberated in a variety of meetings with executives and employees, some of which were led by Professor Oğuz Babüroğlu, a good friend and an expert in participatory planning methods. At the end of this process we defined our mission, vision and values. We also made sure all our companies carried out similar studies and combined them with their long-term strategic plans.
I’m often asked, “Is all this necessary, or is it just empty chatter?” I would say these efforts are useful, provided they’re done right, but the potential for error is…
Extremely high. Allow me to summarize which approaches are right or wrong, and let’s see if you agree. Definitions are key, first of all; we have to know what we’re talking about. Everyone should understand the same thing when we say “vision,” or “mission.” Even a concept like strategy, something we assume is familiar to everyone, can mean so many different things. It doesn’t have an unequivocal definition, actually, it’s a concept that changes from company to company, user to user, and even between management gurus. We decided to choose the meanings closest to our experience, and to ask everyone to use them that way because everyone in a company should speak the same language. That’s why a company ought to define how its employees perceive these terms. That was our starting point, and we expanded this project into the preparation of the Eczacıbaşı Glossary of terms on strategic planning, financial and human resources management, information technology, and other branches of management.
The second point is that it’s impossible to force employees to accept top management’s answers to crucial questions like, “What is the mission or vision of this company?” No one has to accept or embrace someone else’s vision. That’s why these definitions have to be made with the widest possible participation, under the guidance of senior management, of course. No one should be surprised when you embrace a mission that states, “Eczacıbaşı is a pioneer of modern, high quality and healthy living.” The majority of employees and stakeholders should to be able say, “Well, yes; this definition fits with my views of the brand.”
And thirdly, fundamental concepts are only effective if they’re put into action. They’re useless if they remain on paper. The worst approach is displaying fancy inscriptions and plaques with vision statements that you’ve prepared just in case someone asks. That’s when you see statements that say nothing about the company’s distinguishing attributes and could have been written for any company. These statements are often the butt of jokes and cause more harm than good.
The values on which a company culture is founded are probably more important than anything else because they rarely change. One could argue that those values determine the personality and soul of a company. The truth is, everything about a company can change over time: employees, production facilities, fields of activity, strategies, policies… even shareholders and the company name. But as long as the values remain the same, the company retains its identity. If you change its values, it becomes a different company.
The approach to defining and promoting values is the same as the approach to defining mission and vision. Just putting them in writing isn’t enough. Values guide people only if they’re credible, if people live by them and promote them. If you can create an environment where your company’s values are actively embraced, then the corporate culture based on those values naturally expels anyone who can’t adapt.
These concepts that add value to a company as a “brand” can only be defined if senior management prioritizes and guides the process of defining them; only then can they play an effective role. Of course, all of this requires a long-term perspective. That’s why family firms may have certain advantages with respect to creating an effective vision and maintaining it over a long period of time.
These are the lessons we learned from our work on corporate culture.
First of all, I think definitions are truly critical as it’s with words that the intellectual dimension of any topic is expressed. If you and I mean different things by the same word, we won’t be able to extract the same meaning from our conversation, come to a consensus, or make a decision and implement it. That’s why a common language is critical. I also believe that the first task of any organization – even non-governmental organizations – is to clearly define their mission statement and vision. The mission is your raison d’être. It’s related to the needs of society, not the organization’s. The more accurately you define that need, the more successfully you’ll meet it. It’s not easy to do, but once you’ve done it well, it becomes an excellent guide. Vision answers the question, “Where are we going to be?” at a certain stage of your organization’s journey towards this mission. You can have a five-year vision, or a 10 and even 50-year vision. Because every idea begins with a dream before it goes on paper and is eventually implemented. Take composers, for instance; they'll hear the music in their mind first, then they'll write down the notes, and finally a large orchestra performs it. An architect first imagines a building, then draws it; the idea is constructed, and people live in the building. The same is true for a company’s vision; the more accurately we define where we’re going to be in five years’ time, the higher our chance of getting there.
As you know, I’m a strategy consultant. That was the topic of my doctoral thesis. Sadly, I see that the concept of strategy is largely misused or misunderstood in Turkey. The essence of strategy is making a choice; it’s not your strategic goals. If a choice hasn’t been made, it can’t be a strategy. I’m sorry to see so many strategic plans that lack a strategy. That’s because we live in a particularly uncertain country and society and want all our options to remain open. But leaving all options open means making no choice, and if you can’t make a choice, then you have no strategy. And that means you can’t develop your competency or your company; all you can do is be an opportunist. Turkish businesspeople tend to grasp opportunities rather than think strategically, develop competence, and make a global impact in a specific field. We have a high capacity for adaptation but we rarely find solutions to a global problem. That’s due to our limited capacity for strategic thinking. That’s not to say that Turkish minds can’t think this way. It’s largely the impact of periods of exceedingly high real interest rates that we’ve all seen; they’ve constricted the perspective of countless businesspeople raised in this environment. So Turkish businesspeople have a tendency to think, “We’ll all die in the long run. Which opportunities can I grab in the short term?”
Those high inflation-high real interest rate periods have hindered the strategic thinking capacity of Turkish businesses. It’s very difficult to do business in the global market without strategic thinking. Sadly, many companies are lacking when it comes to this attribute. That’s why I think your approach is the basis for achieving the future you imagine for your company: Define concepts first, then lay out the mission, vision, values, and finally the strategies. I also agree 100 percent that it’s essential to ensure that people embrace these concepts. In many companies, they’re little more than show, just words on the walls especially when it comes to values. I could give you a list of 60 values, and you’d approve of 55 of them. Everyone wants everything. But a company with 55 values in reality has none, because a value is something you won’t give up even with a gun to your head.
If you can’t give up a value, even under duress, then it’s a corporate value, and it’s important. Let me give another example concerning an international businessman, a ruthless businessman. Executives at his company who fail to meet performance objectives are gone in a couple of years. While he might give someone a second chance when it comes to performance, even the highest performing manager is sent packing at the slightest sign of conflict with corporate values. Let’s say “teamwork” is one of your values. A manager has achieved superb results through careful monitoring and individual decisions but has not demonstrated teamwork. Would you let this person go? Immediately, that is, not after three years. Could you part ways with someone who’s successful but isn’t aligned with your values, no matter how successful he or she is? If you hold on to a person who isn’t aligned with the values of your company, then you shouldn’t call them your “corporate values.”
I also think that the values managed by a company need to be highly selective, though you may prioritize different values at different times. For example, you might say, “This year we’re focusing on these particular five, and next year, we’ll keep three, and add two new ones.” If you do that, however, I think it’s essential that you do everything you can during that period to ensure the concept becomes part of the corporate culture. If all the values you set out are aspirational, they’ll invite ridicule. To ensure that they’re credible, only choose one or two that you aspire to or wish to change; the majority should already be inherent in your corporate culture. Values have to be grounded in experience so that employees can readily embrace them as their own. Here’s a suggestion: Always associate major management decisions with your mission when you explain them to the public, executives and employees, because highlighting the association will help the values become part of your corporate culture. And it gives you the opportunity to test the suitability of those decisions, your mission and vision in relation to the actual operation of your company.
I’m of the view that a company should define and adopt a mission only after reaching a consensus with employees from different levels and departments on the definition of key concepts.
Senior management generally assumes its vision is shared by all employees. But in practice employees are indifferent to vision statements. Studies have shown that senior management and other members of staff give different answers to questions about a company’s mission and vision. This indicates that those statements are not shared at every level of the organization.
Strategy may be more relevant to senior management, but mission, that is, the company’s raison d’être and philosophy, concerns its entirety. Leaders need to talk about values as well as numbers. The vision identified by the founder should be communicated to employees and developed with them. That’s when vision inspires more dedication. At the end of the day, people want to be part of something important, something that will give their lives meaning.
Human resources is also a key subject. Shall we explore it a little? Today, businesses compete intensely to attract talent; it’s a tough battle. Success probably requires a good understanding of the expectations and preferences of young people. You’re quite close to them; you know them well. I have some observations, too.
Very few young talents today set out expecting to spend their entire career in one firm. Generally, they start at a company where they can gain experience and learn a few things; at a later stage they evaluate new options. They don’t necessarily see working at one company for many years as something to be proud of.
As senior executives in this environment, it’s up to us to identify the most talented young people, attract them to our businesses, motivate them, make them happy working with us, and develop and prepare them for service at higher levels of management. This responsibility occupies our thoughts day and night.
First of all, we know that merely earning money isn’t going to be enough for them. Young people want to do something that will give meaning to their lives. That’s why companies with an interest in social problems and a sense of social responsibility can attract the young. But it’s crucial for this to be a brand value. It’s not enough just to say, “We spend so much on social responsibility,” “We’re environmentalists,” or “We’ve built schools.” That’s another reason why I think it’s critical for corporate cultures to embrace social responsibility in their values.
The second thing is that young people look for opportunities for self-development. They know that in today’s world information is growing rapidly and technologies are changing at an extraordinary pace. They also know that the popular disciplines of today may be forgotten tomorrow and that the expertise that companies currently demand might one day be provided by robots. We may think that ongoing training is the solution, but training programs only represent part of the solution, and a very small part at that. Adopting fancy training programs and promoting them at universities isn’t enough. The real solution lies in senior management’s concept of leadership. Young people want to learn something from their colleagues. So, one of the priorities of every employee should be training new talent. If the business doesn’t have a mentoring culture or employ people with that mindset, mentoring probably won’t take place. Unfortunately, there aren’t many people with this mindset because they haven’t been trained themselves to focus on training others. Mentoring should be considered a key performance indicator, and the corporate culture should develop accordingly.
This may be the crux of the matter. Businesses need leaders who strive to work with more talented colleagues, leaders who are prepared to learn from them. Managers who coach should be supported and rewarded by senior management. They should never have to worry about losing their job to someone they’ve coached.
Managers who are capable of such thinking aren’t afraid to give authority and responsibility to young recruits. And that is the most effective method of training managers: giving them responsibility and opportunities to learn on the job and draw lessons from their mistakes.