Lead Right for Your Company's Type: How to Connect Your Culture with Your Customer Promise

"Lead Right for Your Company's Type" seeks to change how you think about, and practice, leadership. It's a well-researched, sensible, and convincing book that will be of interest to leaders across the board, as well as anyone embarking on a new venture. Its ideas are supported by a wealth of interesting case studies from leading organizations, past and present, including Amazon, Apple, Blockbuster, and Yahoo.

William Schneider brings 35 years of experience to this book. As a consulting psychologist and the co-owner of the leadership and organizational development firm, Corporate and Development Group, he's consulted with over 4,000 leaders in the non-profit and for-profit sectors.

So keep listening to hear more about the four enterprise types, why leaders should adopt a system-centric mindset, and how to harmonize your customer promise and your corporate culture.

Schneider employs bullet points, rather than numerical lists, to summarize throughout, and occasional tables clarify the main points. At the start of each chapter, Schneider tells readers what they'll be learning, using bullet points that echo the subheadings coming later on.

The book is divided into two parts. The first explores what Schneider calls the "four living enterprises," or types of company. The second looks at how to connect the essential elements of any organization: your customer promise, culture, and leadership. Before getting into the meat of the book, let's look briefly at those three vital elements.

Customer promise is what determines your enterprise type, as well as your approach to leadership and culture. In the introduction, Schneider urges leaders to understand that the very reason an enterprise exists is to deliver on the product or service promised to its customers. From the moment they accept – or sign up to – a company's customer promise, they become connected to it. For this reason, your customer must be viewed as an extension to your company, and not as a separate entity.

For Schneider, culture is concerned with the way companies hire, train, develop, and reward their employees to deliver their customer promise. Creating a community of employees who are clear about their culture energizes your organization, streamlines operations, and earns customer trust and loyalty. Some of the most successful cultures become identities. Just think of Apple and Disney.

According to Schneider, the driving concern of leadership must be the smooth and successful delivery of your company's customer promise. Your leadership style and the decisions you make must make it easy for your culture to connect with your customer promise, and enable your employees to live up to customer expectations.

Let's now look at the four enterprise types, defined in detail in the first half of the book. Here, you'll learn how to identify your own type, based on the product or service you're delivering.

The most common enterprise type is "predictable and dependable." These companies are usually concerned with providing everyday products or services that meet a basic need. Think, for example, of water and energy providers, construction companies, and rescue services. Their day-to-day operations are driven by facts and data, and must be tightly controlled if they want to deliver a safe and efficient product or service.

Customers will typically sign up to a predictable and dependable service, and keep renewing year on year, trusting that the company will provide a safe, reliable, consistent, and high-quality product. These enterprises tend not to have a personal relationship with their customers and may never meet them face to face.

Decisions come from above, processes must be followed, and standards met. There's little space for creativity or innovation, and this can feel oppressive to employees. So, keeping people motivated is the greatest challenge for leaders of this type of company.

An "enrichment" enterprise confounds the standard idea of a capital-driven business, because it's essentially subjective and based on goodwill. The very opposite of dependable and predictable, these companies tend to be grassroots, organic, not-for-profit, and personal. They exist to realize a deeply held value or belief, one that will enhance customer growth, health, or well-being. This is highly motivational for employees, but can make it hard for leaders to predict and measure progress and success. Childcare centers, schools and colleges, therapeutic services, charities, and certain retailers, such as The Body Shop, come under this umbrella.

Decisions in an enrichment enterprise are based on people's values and judgements. Inevitably, this can lead to messy disagreements on how best to act. Schneider recommends an "agree to disagree" policy to help neutralize any people conflict.

Leaders of an enrichment enterprise should be charismatic, energizing, inclusive, and enabling. They must unite their employees toward a common vision, maintain their commitment, foster hope and faith, and encourage self-expression and growth.

The "best in class" enterprise does what it says on the tin. These companies aim to perform above and beyond – beating not just their competitors, but also their own last products. These organizations are designed and led by experts who strive to create what doesn't yet exist. They make customers want what they don't know they need until they see it. Their high-quality, high-technology, and distinctive products do their own marketing. And, as the best, they can demand the highest prices in the market.

Expertise is central to the culture of a best-in-class enterprise. Innovation and adaptation is key to survival. Best-in-class leaders are standard-setters and visionaries. Obsessive and highly competitive, they're determined to invent something pioneering and be market winners. They employ the best, but they also know how to get the most out of their employees by providing everything they need to achieve, and rewarding accomplishments.

The fourth and final type, "customized enterprises," work with individual customers to create a product or service that's tailored to their specific needs. The customers are an essential part of the team, involved every step of the way, and they make the final decisions.

Traditional budgeting tends not to work in these enterprises, because it's so hard to make predictions. One contract may bring in the lion's share of that year's profits, but the project may take a few years to complete. There's also a lot of work put into tenders, which is often done without any payment. Sales are hard won. The hope is that by creating a good working relationship with their customers, they will return.

The fate of this type of company is very much in the hands of its customers, and this can be tricky for employees to cope with.

The right culture for a customized enterprise is one founded on collaboration. This is about team effort and bonding with customers. Communication is open, free and diverse. Employees must be able to adapt, go with the flow, and accept the opinions of others – and the general unpredictability of the job.

The correct leadership style for this type is participative. These leaders don't impose decisions, they trust and enable their teams to make them. They build individuals into well-conceived teams, and then empower and guide them to find the best solution to a customer's unique problem. Partnership, trust and empathy are at the heart of a customized company.

It's important to point out that companies may have more than one customer promise and, therefore, more than one enterprise type. In Schneider's experience this is true for around 20 percent of organizations. When this is the case, he advises separating companies into sub divisions, with each one following the rules for the relevant enterprise type.

Schneider explains how these four enterprise types work as opposites. So customized enterprises contrast with best-in-class organizations, and predictable and dependable companies contrast with enrichment enterprises. He believes understanding the key principles of your opposing enterprise type helps predict your own strengths and weaknesses, because their strengths will be your weaknesses, and vice versa.

As an example, an enrichment organization may have too much mission and not enough concern for operations, but it embraces change and excels at empowering people. Whereas predictable and dependable companies are all about rigid operations, but this makes them resistant to change and means they struggle to energize employees.

This first section concludes with a chapter explaining the principles and importance of leading with a system-centric mindset. Schneider calls for every company to recognize that businesses are living people systems. People are the life of your company. Not profits. Not technology.

So he urges leaders to create networks that provide the necessary conditions to deliver the customer promise. People issues are usually symptoms that cultural drivers, leadership styles, and the customer promise aren't fitting with one another. For example, when a CEO is appointed from one enterprise type and brings that style of expectation and leadership to another enterprise type, it simply won't work.

This is also why so many mergers and acquisitions fail. The merged companies mix and match their cultures, and end up with a confused system. Success comes from working together to identify a new customer promise. Schneider argues that once you understand your enterprise type and how to implement the correct changes within your company, you can turn things around surprisingly quickly, and usually at low cost.

Schneider's vision is for a human and humane approach to business. He reminds us that people want to do a good job – it's in our nature. Leaders simply need to give their employees the ability to thrive and deliver. A system based on connectivity and interdependence is vital to creating a positive and successful organization.

The systems-centric mindset is based on five essential drivers: focus, configuration, integration, balance, and adaptation. Each is given its own chapter in the second section of the book, which offers practical advice on how to connect your customer promise, culture, and leadership.

An enterprise has focus when its customer promise is understood by everyone and can be clarified at every step of its operations. A lack of focus creates symptoms such as the duplication of work, unclear priorities, mixed messages from leaders, and confusion about where the company is heading.

Configuration is about having an effective power structure. Disconnections and bottlenecks create problems, such as too many levels of management, conflicts, and negative energy flow that exhausts your people. Integration is concerned with ensuring that culture and leadership drivers are practiced in a way that's consistent with your customer promise.

Every enterprise should function in a state of harmonious equilibrium or balance. When leadership or cultural drivers tip into the extreme, their strengths can become weaknesses. Schneider suggests Amazon is a prime example of a company in a state of imbalance. Its technological power has become its Achilles' heel. Amazon has the second-highest staff turnover on the Fortune 500 company list, with the average contract being a year or less. The cost of this must be vast. And the reason?

Schneider describes how Amazon discourages stealing by screening examples of on-the-job theft in its warehouses. It uses personal satellite navigation to track the minute-to-minute movements of its employees, dictate which route they take to get the products, set and measure their productivity, and time bathroom breaks. This is a workplace for robots, he says. No human can thrive in these conditions.

If you feel you've lost your equilibrium, Schneider suggests looking at your opposite enterprise type. Temporarily adopting a contrasting principle of leadership will bring you back into balance.

For example, leaders of a predictable and dependable company that has over-managed its operations at the expense of the wellbeing of its workforce, could draw on the highly personalized cultural drivers of an enrichment company. Devoting a short period to personally getting to know your employees, listening to their ideas, and finding out how you can help improve their work life will make them feel valued and re-energized. And it will cost very little.

A recent survey estimated the average lifespan of companies in the U.S. market is 15 years, a sharp decline from more than 50 years last century. Adaptation is key to survival. Kodak and Blockbuster are both examples of companies that failed to adapt to changing markets. Schneider advises leaders to always look ahead, but if profit does start to decline, they mustn't stick their heads in the sand.

First and foremost, they must remember to listen to customers. Ask them why they've stopped using your product or service. Then ask yourself what you can do to deliver what they now want or need.

This book opens with a promise to provide advice and tools for uniting employees and for getting them to work together, to help understand the root causes of people problems and how to make changes for the better.

It also aims to help leaders infuse positive energy into their company, and set them on the right course for long-term success. We believe it delivers, and provides inspiring evidence of how well this approach can work for leaders of all four enterprise types.

"Lead Right for Your Company's Type" by William Schneider is published by Amacom.

That's the end of this episode of Book Insights. Thanks for listening.