Strategy for starters

Nick Liu

July 10, 2022

 

What is strategy?

On the internet, guidance on how to build a successful business abounds. In the academic world, management gurus have also shared extensive insights on this topic. In the 1970s, Kenneth Andrews introduced the gold standard for strategy, which matches a business’s attributes with its environmental conditions. In the following decade, Michael Porter argued the potent of these external forces in constraining a business’ profitability. Then, in the 2000s, David Collis and Cynthia Montgomery redirected peoples’ attention inward of a business. There are also plenty of other renowned strategies. But what essentially is strategy?

A relationship between strategy and business purpose

A strategy is underpinned by the very purpose of a business’ existence. While most of the people would think that the sole purpose of a business is to make money, this does not mean that it could not serve a higher purpose at the same time. Patagonia, a fashion retailer, has been championing the use of organic cotton in clothing and even encouraged its customers to buy less to reduce waste. Yet its sales have grown eightfold in the last two decades. A purpose could be derived from a business founder’s belief that appeals strongly to certain human desires, eliciting people’s loyalty to the business. For Yvon Chouinard, founder of Patagonia, business has the potential to solve economic, social, and environmental problems and inspire positive change. Such spirit acts like an emotional hook that guides business decision-making.

Resources enable strategy

With an end goal set, an entrepreneur should look inwards of a business and identify what unique resources it owns, either tangible or intangible, such as brand, talent, technology, and others. These are not any, ordinary resources, but they are hard to be copied by competitors and are be used to craft a distinctive offering demanded by customers. A business without any unique resources should not compete at all or should develop one before anything else. For Google, its most crucial resource is its algorithm that ranks the most relevant search results for its users. And its founders had worked on it for years before Google even made any money from it.

Alternatively, a business could outsource resource building through a platform, a business model that harnesses crowd wisdom from interactions between buyers and sellers. Therefore, its goal is to nurture a community that reinforces a learning loop. For instance, Uber started by subsidising drivers, one side of its platform, to broaden its service coverage. Then, more customers would hire from Uber, and in turn more drivers would join the community. Thus, as its community grows larger, Uber benefits from the scale to further improve the user experience. And better user experience retains both drivers and customers.

A strategy solves problems

Entrepreneurs should next consider how their resources can solve the problems of potential customers. Clayton Christensen, a professor at Harvard Business School, argued that we should consider customers as someone hiring a business to do a job they don’t want to do or cannot do. For instance, parents would hire a doll business for helping their preteen girls to articulate feelings. Therefore, entrepreneurs should define the exact human needs their businesses are serving.

Whose problems to solve?

Narrowing down the right group of customers to serve, however, is not an easy task. While a resourceful kingdom could conquer any land, not all conquests yield the same rewards. A business should also be disciplined in staying focused on a targeted group because whatever resources it may have, they are never limitless. Michael Porter argued that there are five external forces a business should consider because they all compete to split the profitability pie. These forces are suppliers, buyers, competitors, “substitutors” (indirect competitors such as YouTube and Cinemas), and potential entrants. A business should compete only at a place where it has the upper hand when bargaining or competing with these five players. It could be a specific geographical region, a niche market, or a part of a distribution chain.

Tactical plays to win

When dealing with the players with whom they have chosen to compete, entrepreneurs should always look for opportunity to change the competitive dynamic. One strategy could be to change who is playing by paying someone to play or exit. For example, to dominate the search service in Apple’s ecosystem, Google has paid Apple billions of dollars for prioritising its search engine on Apple’s Safari, a web browser. Google does so to extend its reach of user data, another key resource that it uses to make billions more in advertising business. Whereas a rising start-up could commit publicly to stay small to shun retaliations from existing big players. This, however, is how most of the disruptions in an industry ignite.

As big players focus on high-profit-margin mainstream customers, they often neglect a few smaller customer groups. Start-ups with limited means could then target those customers and serve them with novel offerings that meet their needs at a lower price. For example, Blockbuster ignored frugal customers who were willing to wait few weeks before watching a movie, and Netflix came into play with its DVD mailing service. As internet infrastructure matured, Netflix introduced movie streaming service and lured most of Blockbuster’s customers away. To succeed with this tactical play, entrepreneurs need to match their businesses’ trajectory with enabling technology’s.

This is strategy

No matter how they want to play, entrepreneurs should always first cultivate unique resources for their businesses. They could develop those by themselves, partnering or crowdsourcing. Then, they must locate a place to play where full potential of those resources can be untapped to offer a better product for a certain customer. A business is in the sweet spot when its customers are willing to pay more than they would pay to its competitors for solving the same problem they face. Consider how much more a product would cost if it had an Apple logo? That difference underscores its key resource: marketing genius. So, a strategy is all about integrating resources to form a set of actions that serve customers better than competitors.

 

An ethical dilemma faced in a corporate life

Nick Liu

March 11th 2022


Incident

Coming from a Fortune 500 company, I was shocked during my first month as a finance manager at a public-listed company in Malaysia. The stark differences in corporate culture and ethical perceptions quickly became apparent. Early on, my head of department explained that our team served as the liaison between project teams and bankers, facilitating vendors in providing “financing invoices” to our company. Confused by the need for off-the-books invoices to support Banker’s Acceptance applications—a banking facility for financing working capital—I questioned the legality of the practice. My manager dismissed my concerns, explaining that such invoices were industry-standard, and both bankers and vendors were complicit in tailoring invoice details to meet financing requirements.

Feeling uneasy, I sought clarity from compliance officers at Malaysia’s Central Bank. They informed me that these practices fell under individual banks’ governance rather than their jurisdiction. A subsequent discussion with a bank’s relationship manager at a retreat further revealed that the lack of clear regulatory guidance meant the practice was not explicitly illegal. As months passed, I noticed that vendors and bankers alike readily participated in this system, with some bankers even instructing us to have vendors amend invoices to align with their processing teams’ requirements. Trapped in a flawed system driven by expediency, I reluctantly took an active role in the process.


Analysis of the Incident: Utilitarianism

From a utilitarian perspective, which seeks the greatest good for the greatest number, my actions were more self-serving than altruistic. At the time, I rationalized my involvement by arguing that maintaining a smooth flow of economic transactions would contribute to societal prosperity. However, true utilitarianism considers long-term effects on both current and future societies.

This practice posed significant risks to the financial system’s stability, disproportionately affecting low- and middle-income groups during potential crises. While the immediate benefits seemed to outweigh the risks, the long-term consequences of perpetuating such an unsustainable system would ultimately outweigh any temporary gains. In hindsight, I recognize this as unethical, as the collapse of such practices would harm society at large, erasing any fleeting benefits and leaving a net negative impact.


Analysis of the Incident: Deontology

From a deontological perspective, my actions clearly violated Kant’s principle of the categorical imperative, which requires universalizing one’s actions as a moral law. If everyone engaged in deceptive business practices, greed would dominate, leading to financial instability reminiscent of the 2008 Global Financial Crisis.

Though the invoices were not outright fabrications, their misleading nature constituted a breach of trust. By submitting these altered documents to the bank, I participated in a system that obscured the truth. My justification that I had limited autonomy within a flawed system fails to absolve me of responsibility, as I retained the choice to act truthfully or remove myself from the situation. Having worked in an environment of higher integrity at a Fortune 500 company, I had the freedom to hold myself to a higher standard.


Analysis of the Incident: Virtue Ethics

This incident marked the beginning of a series of poor decisions that contradicted my desire to be truthful. Over time, reinforcing these behaviors eroded my values and led to further compromises in both my professional and personal life. Clayton Christensen’s concept of the marginal cost doctrine resonates deeply here—small, seemingly inconsequential decisions often lead to significant ethical divergence over time.

Fortunately, a turning point came when I faced personal and professional challenges during the COVID-19 pandemic. Recognizing the need to realign with my core values, I chose to immerse myself in an environment that resonated with my upbringing and ethical principles. This decision was instrumental in rebuilding my integrity and reaffirming my commitment to living truthfully.


Reflections

In hindsight, I rationalized my actions through selective utilitarian reasoning, but if faced with the same situation again, I would leave the organization upon discovering the systemic nature of such practices. It is overly naïve to believe that one individual can reform a deeply flawed system.

Having experienced the compounded consequences of actions that eroded my values, I now understand the importance of upholding virtues, even when the immediate costs seem trivial or substantial. Small compromises accumulate, potentially steering life toward an ethical abyss. From a utilitarian perspective, I now view my present and future selves as a collective, ensuring that today’s decisions contribute to long-term happiness and integrity.

I commit to living by the principles of faithfulness and truthfulness, making them the guiding laws of my life. Constructing and maintaining ethical values requires conscious effort and constant reinforcement. While frameworks like utilitarianism, deontology, and virtue ethics provide valuable guidance, they alone are insufficient without a steadfast commitment to dignity and moral courage.

 

 

­­­MANAGING AND CULTIVATING CULTURE TO INCREASE MOTIVATION FOR BROOME REGIONAL ABORIGINAL MEDICAL SERVICE

Executive summary

BRAMS is a public organisation that provides free healthcare to predominately Aboriginal members of the isolated Broome community. This challenging task can expose BRAMS’ dedicated staff to risk of burn-out unless organisational culture is carefully cultivated to maintain staff motivation. An organisational restructure and new leadership team have made tremendous improvements in this area at BRAMS since July 2019. However, through qualitative interviews with nine select employees, we have identified five areas which could be improved to facilitate better culture and motivation at BRAMS, and help it achieve its vision of ‘healthy people – strong community – bright future’ for both the Broome community and their staff.

Broome and the Kimberley: cultural context

Broome’s unique demography results from early Asian migration (AHC, 2011) and a significant local indigenous population. As such, a Hofstede analysis of Broome would differ greatly to that of Australia at large. Without such an analysis existing for Broome, we rely on qualitative interviews and literature reviews to gain insight into Broome’s culture.

Whereas Australia scores highly on individualism and indulgence under the Hofstede framework, Broome is known as “one big family” for many residents (Yamanouchi, 2018). Nature and connection with land are highly valued in the “living cultural landscape” of Broome (Yawuru Corporation, 2013), which de-emphasises private industry, materialism, and social hierarchy (Ibid, 2013). The language of time in Broome incorporates a fluid, circular notion of time that locals affectionately refer to as “Broome time” (Coombs, 2001), and the degree of spontaneity is high (Ibid, 2001).

With this in mind, we sought to develop an interview methodology and deliver our recommendations in a manner that is culturally sensitive to an organisation that serves the unique community of Broome.

Building culture under new leadership

CEO Cassie Atchison joined BRAMS in July 2019 and has made momentous strides in the ensuing 2.5 years to improve the culture at BRAMS, which were positively viewed by all nine BRAMS employees we interviewed. Atchison established an annual employee engagement survey in December 2019 and 2020, which assesses engagement by several metrics, all of which have shown marked improvement from 2019 to 2020. However, “culture” and “communication” continue to score lowest at BRAMS.

In developing this report, we sought to understand the underlying causes for the comparatively low scores given to “communication” and “culture” by BRAMS staff, by implementing a carefully planned research methodology consisting of literature reviews and qualitative interviews. In doing so, we strive to provide practical, culturally sensitive recommendations that can make a real difference to a public organisation with limited resources. 

We interviewed nine BRAMS employees (of 47 total), and intentionally balanced our selection between key leaders and ground level clinical and administrative staff. We developed questions based on Warwick’s 10 culture-building guidelines (Warwick, 2017) whilst also allowing space for interviewees to express their views on BRAMS culture in their own words. 

In recognition of the unique Broome culture in which BRAMS sits, prior to interviewing BRAMS staff, we sought to develop an understanding of the silent languages of that culture via literature reviews (Hall, 1960); and ensured that an Australian interviewer was present during all interviews to maintain cultural sensitivity. 

Building the right culture for BRAMS: a gap analysis

From these interviews, it was apparent that overall, BRAMS staff sense a tremendous improvement in the workplace culture since Atchison’s arrival in July 2019. Respect for management and perceived respect for employees has grown considerably since Atchison’s arrival, as have all areas on the employee engagement surveys.

However, our interviews have uncovered five consistent themes for improvements that could be made across BRAMS. We present below a gap analysis based on these themes, ranked in order of priority against the ten guidelines for building and sustaining organisational cultures (Warwick, 2017).

1.      Develop clear understanding of present culture

Interviewees held differing views on what the present and desired cultural norms at BRAMS are. Whilst most interviewees were broadly aware that BRAMS values respect and seeks to ‘make our mob healthy’, eight interviewees were unable to state BRAMS’ vision, mission or values when asked. Consistent themes that came through from all interviewees centred around seeing BRAMS as a family, the importance of their roles in helping the Broome community, respect as an integral workplace value, and the importance of enjoying work each day. Other than these broad themes, there was little common understanding of the present culture that emerged across interviewees.

2.      Identify, communicate, educate, and engage, employees in cultural ideology

Based on our interviews, communication at BRAMS is predominately delivered using a top-down approach. Most interviewees cited the new CEO’s creation of key workplace policies, such as the Code of Conduct, as helpful guidance for how to act at BRAMS. Indeed, six interviewees noted that whole team training on the Code of Conduct was beneficial for their roles. However, only one interviewee cited 1-on-1 training as having been beneficial. This suggests that top-down individualised communication has not achieved sufficient results compared to the time it requires to implement.

In addition, three interviewees also noted that visual aids BRAMS utilises are not meaningful to them – such as vision and values posters on display – and are viewed as “just something on the wall.” Three interviewees also noted that they do not feel engaged in culture-setting at BRAMS and can feel “left in the dark” about the direction that BRAMS is taking. This suggests that employees may not feel engaged by the communication BRAMS currently provides to set the organisational culture.

3.      Use symbols, ceremonies, socialization, and stories to reinforce culture

As the first Aboriginal medical service in WA, BRAMS has a rich history of serving its community. Given that many of the Broome community struggle to access medical care due to lack of transport, drivers are integral to ensure patient access, and the importance of their role was consistently praised by interviewees. Additionally, BRAMS is located on historically and culturally significant land (Demin, 2007), and has a rich history that contributes to its positive reputation within the broader Broome community. As such, it was surprising that interviewees were not able to name any consistent stories, symbols, or key historical figures, seen as embodying BRAMS culture. Only two interviewees were able to share any stories of BRAMS history, suggesting that it is not well known or celebrated at present.

4.      Role model desired behaviours

The strongest theme evident in our interviews was that BRAMS employees are impressed by and appreciative of the strong leadership team at present. Leadership’s passion is evident across all areas of the organisation, and many note the hard work that is put in by the leadership team.

Paradoxically however, four respondents expressed a view that seeing key leaders smoking in view of the public entrance was damaging to BRAMS’ reputation as a health organisation.

Another theme was the risk of burn-out, particularly in patient-interfacing roles such as AHWs. No consistent themes emerged showing how behaviours that aim to avoid burn-out and factor in self-care are role-modelled by the leadership team. Indeed, only one interviewee noted the importance of sufficient time-off for maintaining a healthy workplace culture, whilst three interviewees noted that taking leave can be challenging given that community medical needs are continuous.

Other than ‘keeping our mob healthy;’ it was not apparent from our interviews what behaviours have been identified by BRAMS as contributing to the desired workplace culture, so it is perhaps not surprising that we did not identify themes in how those behaviours are role modelled.

5.      Recognise and reward desired behaviours and practices

Given the lack of consistent behaviours identified above, it follows that the behaviours that are rewarded at BRAMS do not appear to follow a consistent pattern, that could in turn contribute towards a recognisable and intentional workplace culture. Three interviewees noted that there is a lack of consistency when dealing with certain undesirable workplace behaviours, such as unexplained staff absenteeism or impunctuality. Although three interviewees cited the employee of the month initiative as a source of recognition, they did not view it as meaningful, as they were unclear on the process underpinning its reward. Two interviewees perceived a lack of in-time recognition for positive behaviours, such as teamwork between the clinical sub-teams.

Recommendations

The above gap analysis demonstrates five associated areas of opportunity for BRAMS to grow its workplace culture and achieve better communication and motivation levels. Noting that “culture can be built by design or default” (Warwick, 2017), we recommend that BRAMS leadership take active steps to plug the above-identified gaps by designing initiatives that achieve the following:

Recommendation 1: Develop clear understanding of present culture & desired culture

We recommend that BRAMS leadership reflect on both the current macro-culture at BRAMS and its subcultures within each team, and on the culture, they wish to build, in order to identify any gaps. Next, leadership should identify the desired behaviours required to build and maintain such a culture, and ensure this vision is shared across the leadership team.

Recommendation 2: Engage BRAMS staff in culture building

Having identified both the present and desired culture and practices that build such culture, we recommend that BRAMS leadership take steps to engage all employees in culture-setting, by understanding from all levels and functions what staff want from their working environment. This can in turn be fed into the cultural vision established under recommendation 1.

Recommendation 3: Communicate the desired cultural norms to employees

We recommend that BRAMS leadership communicate the desired culture across hierarchies, and do not take an exclusively top-down approach. It is important that this communication be frequent and repeated so that a consistent message is absorbed by staff. Employees need to understand leadership’s vision for BRAMS culture and have this continuously reinforced. One example for achieving this could be facilitating further all-hands training on BRAMS mission, vision and values, the Code of Conduct, and other key policies. In such training, stress the link between these concepts and the workplace culture that leadership is trying to cultivate. This training should be sufficiently interactive to ensure that employees own this shared vision for BRAMS.

Recommendation 4: Leverage the value of BRAMS’ history

As part of communicating cultural values, we recommend that BRAMS leadership leverage its unique history for strategic advantage, by discovering, acknowledging, and bringing to life, inspirational stories from BRAMS’ 43-year history. Stories can be used to reinforce cultural values (Warwick, 2017), and to clearly articulate leadership’s priorities around patient service, health, and community care. Historical BRAMS figures such as founders and early staff could be leveraged and engaged where possible to speak with current staff, as a source of inspiration to demonstrate the strong community evident in BRAMS vision.

Recommendation 5: Use stories, symbols and ceremonies to reinforce culture

Similarly, we recommend that BRAMS leadership construct symbolic narratives that reinforce BRAMS’ desired culture and utilise symbols and ceremony wherever possible to reinforce this. Given that no consistent symbol was identified during interviews, BRAMS has an opportunity to use existing symbols e.g., BRAMS’ logo or construct new symbols to reinforce a desired culture.  (Re)articulating such initiatives with effective cross-strata communication and a carefully articulated narrative may serve to construct a memorable story that staff can actively engage with to better understand the desired behaviours at BRAMS.

Similarly, culture can also be reinforced via ceremony.  For example, the morning meetings and Wednesday afternoon meetings present an opportunity for a staff member(s) to articulate a culturally significant story (e.g., a valued behaviour identified in another staff member or encouraging patient feedback) identified during work to reinforce the specific culture valued at BRAMS.

Recommendation 6: Role model desired behaviours

We recommend that BRAMS leadership take every opportunity to role model the behaviours identified as contributing to the desired culture, and actively demonstrate that leadership are attempting to role model these behaviours, to bring them into the conscious vernacular. By specifically acknowledging when leaders are attempting to implement their own behavioural changes, this generates respect and credibility from staff. Indeed, by publicly articulating the personal changes that leaders are willing to make, and acting consistently with such public statements, leaders can set great examples and generate significant cultural buy-in (Warwick, 2017). Examples of this could be articulating a commitment to BRAMS’ “healthy people” vision by offering to all staff lifestyle improvement initiatives such as smoking cessation, weight loss initiatives or mental health strategies such as mindfulness meditation. Critically, leaders need to demonstrate personal commitment to these initiatives. Another example could be holding staff accountable for unexplained work absenteeism or impunctuality and linking this to BRAMS’ commitment to its value of “accountability”.

Recommendation 7: Recognise desired behaviours 

We recommend that the frequency of inter-team interactions should be increased in a manner that puts all staff on an equal footing and breaks down silos to cultivate the ‘BRAMS family’ culture. All interviewees appreciated the all-hands training and team-building days recently introduced, and such initiatives should be utilised to consciously articulate and recognise the desired culture.

We recommend that recognition be transparent, apparent, and timely. Although BRAMS has recognition initiatives such as employee of the month already, we recommend that recognition should specifically describe the behaviour that is being rewarded, explain why that behaviour was helpful, and demonstrate the positive outcome that the behaviour generated for BRAMS.

Recommendation 8: Reward desired behaviours to increase motivation

We recommend BRAMS utilise non-monetary rewards to increase staff motivation. Organisational culture can breed job satisfaction, which in turn is linked to motivation and performance (Lawler, 1981). However, to incentivise increased effort, employees need to be aware of what behaviours they should be putting their efforts into and perceive equity in the rewards they receive for such effort (Lawler, 1981).

To achieve this, we recommend that BRAMS consider tying KPIs to the behaviours identified in point 1 above and implementing non-monetary rewards to increase the perception of equity. This could include examples such as providing end-of-year leave, awards such as employee of the month and photos displayed, or being given public praise, all based on performance.

Conclusion

BRAMS has made remarkable progress in building a positive workplace culture under new CEO Cassie Atchison, and employees are overall highly satisfied with BRAMS as a working environment. However, in order to cultivate a culture that enhances motivation, further steps can be taken to improve communication and bring all levels of staff from all teams on the journey of culture-building, so as to enable BRAMS to achieve its mission of ‘making its mob healthy’.

 

 

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