Change the Incentives, Engage the Whole Organization

This is an excerpt of the original article. It was written for the September-October 2014 edition of Supply Chain Management Review. The full article is available to current subscribers.

September-October 2014

2014 marks the 10 year anni­ver­sary of the Gartner Supply Chain Top 25 ranking. This year we have a diverse set of large, global companies with mature, demand-driven supply chains. There are lessons to be learned from these supply chain leaders, many of whom have led their industries over the past decade.

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Culture is an amorphous idea, but it infuses every organization and deeply influences how people act and how they feel about their work. Andy Savitz, a consultant and an author, writes a lot about culture in Talent, Transformation, and the Triple Bottom Line. Savitz describes it this way:  “When employees say: ‘That’s just the way we do things around here,’ they are often describing the influence of culture. When they carry out some management dictates with enthusiasm, quietly ignore others, and actively resist or even sabotage still others, they are likely reflecting the values and assumptions of a corporate culture … that ‘feels right’ to them.” Culture, in his description, seems to be a “you know it when you feel it” kind of thing.

Savitz pointed me to a well-known model developed by Edgar Schein from MIT’s Sloan School of Management. The Schein model describes corporate culture in three categories, which Savitz paraphrases as follows:
What we do: The observable part of a company, its processes, and actions.
What we say: The explicit statements like “safety is our top priority.”
What we believe: The “underlying assumptions,” the “unconscious, taken for granted beliefs—the ultimate source of values and actions.”

This simple but powerful model captures some of what stands in the way of the Big Pivot. In most organizations, the goal of maximizing profits is clear on all three levels—it’s what’s done and rewarded, it’s what’s stated, and it’s what most execs believe. But when it comes to environmental or social performance, there’s a breakdown.

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