Business in focus: Corporate Punk
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works with fast-growing digital businesses to help them develop what it calls ‘impact cultures’. Its recent clients include Ada
, the healthcare app, Habito
, the mortgage start-up, and Elder
, the digital care provider. The business is also helping corporates such as the BBC and Sony Music adapt to and exploit the digital future.
MD Phil Lewis explains how managing culture in the right ways helps leaders to stimulate team happiness, inventiveness and business growth.
“Culture is such a misunderstood word,” he says. “To many leaders it can feel ephemeral – a vague sense of ‘what matters around here’. Culture is best understood as the social order of a business. It directly affects how a business organises itself, and therefore what gets done and how. It is a key pillar of any corporate strategy – or at least should be. Most businesses fail to recognise it as such.”
An impact culture, claims Lewis, is one that’s geared towards unlocking people’s true potential at work, so they consistently deliver the highest levels of creative and commercial performance. “It’s essential when success depends on people thinking and acting more creatively – for example, where the agile development of new brands, products and services is essential to business performance,” says Lewis.
It is by understanding and developing culture as a specific management focus, the firm believes, that digital businesses can transform their future growth prospects.
A research-led approach
Lewis points to some compelling data to support his case. Research by Harvard Business School Professors John Kotter and James Heskitt has conclusively demonstrated that, over a decade plus, firms with performance-enhancing cultures enjoyed 682% revenue growth. In contrast, firms lacking a performance culture showed average revenue growth of just 166%. Stock price growth is even more stark, measured over the same period: 901% versus 74%.
Informed by such data, Corporate Punk’s belief is a simple one: that being unable to manage culture effectively, especially during growth cycles, ends up holding most digital businesses back.
"It’s a story we hear over and over,” Lewis continues. “Investment and growth make digital businesses more complicated. The very informality that has helped drive success to date starts to make people feel disconnected and chaotic. Performance suffers."
“Equally commonly, investment disrupts everything. Targets, strategy, financial management, leadership and governance are all changed - and usually at the same time. The social order of the business begins to break down. Culture dilutes – and, again, growth starts slowing.
“We see these dynamics at work in a wide range of fast-growing digital firms. Their leaders, and PE and VC investors, are often scratching their heads about how to address them.”
Cultural problems can be hard to spot
The problem with growing digital businesses, Lewis says, is that complexity is often growing so fast it’s difficult to isolate what issues are actually occurring – never mind what to do about them.
“We’d advise looking out for certain tell-tale bits of feedback. ‘The company’s changing’ becomes a complaint. ‘New hires just aren’t working out.’ ‘The people we need most are leaving.’ ‘We can’t agree what to do next.’ ‘Everything feels so sluggish around here.’ These are all good giveaways that cultural problems might be taking root,” he says.
And while leaders usually don’t fail to spot problems, they do often fail to look in the right places for answers. “It’s a slight generalisation, but tech-led businesses tend to think that more tech is the answer. ‘Let’s invest in more tools that help productivity’ is a common mistake. The reality is that the tools are only as aligned and motivating as the people using them.
"In fact, you tend to find that whatever problems are starting to present themselves are only amplified by certain types of tech. Email, Slack, even WhatsApp – the cultural damage that can be inflicted by misuse of these channels can be vast.”
If the answer isn’t always more digital technology, the other mistake that leaders commonly make is to try and exert more control. “It’s never the answer. More rigid structures only decrease adaptability, empowerment and willingness to take risks. The same is true of systems that are developed in isolation by managers who don’t understand their potential impact on the whole.”
For digital leaders facing such cultural challenges, Lewis reckons the answer is counter-intuitive. Look to the human beings you employ, not the tech you give them to work with, and ask how effectively you’re empowering them in their roles.
A formula for cultural impact
Underpinning Corporate Punk’s work is a deep belief that three factors inform how effectively digital business grow their culture.
The first is agenda alignment. “How bought-in to a shared vision of the future is your workforce? And how well equipped are they to navigate the inevitable conflicts that will come from bringing it about?” asks Lewis.
The second factor is creative capabilities. “Creativity is another misunderstood word,” he asserts. “We look at the extent to which people are able to harness their innate problem solving, critical thinking and idea generation potential – and turn that potential into reality. This is imperative in any situation where an organisation is facing the unknown. That could be competitive pressures, or broader changes such as the ones posed by Brexit or automation. In fact, I published a manifesto on that very subject last year.”
The final factor is leadership behaviour. “This refers to how well-positioned an organisation is to capitalise on aligned agendas and creative capabilities. Are leaders establishing the right context? Do their processes foster good ways of working? Are the structures they create sufficiently flexible?”
“Crucially, the momentum created by leadership behaviour can be either positive or negative. Leadership really matters. We all know what happens when you multiply a positive by a negative number,” he says.
Investigating and helping clients to change these factors is helping Corporate Punk transform its clients’ performance. “Last year one client saw profitability increase by 17% without making a single redundancy. Another was failing to hit its CAGR target until we got involved,” says Lewis. According to the firm’s own measures, 87% of Corporate Punk’s clients return when the business has solved their first problem, which is clear evidence of a successful approach.
About Corporate Punk
Industry: Managing Consulting
Company size: 11-50 employees
Ownership: Privately held
Sub-sector: Managed Services
Visit website: https://corporatepunk.com/
A disruptive approach
“When we set up Corporate Punk, we wanted to be as disruptive in our world – culture change – as the digital businesses we wanted to help,” says Lewis. “It’s hard to find advisors who can give you a fully knowledgeable perspective on what’s occurring within your culture. Management consultants are commercially savvy but often don’t fully understand people dynamics. Trainers are good at distracting people for a day, but not affecting business-as-usual. Leadership coaching can be useful but can take forever to trickle down.
"In our case, we wanted to develop the deep and broad skills necessary to offer blended interventions to our clients.” The firm combines strategy consulting, coaching, and mentorship in innovative ways to “focus on changing the aspects of the culture that are having the biggest direct impact on performance,” he says."
For Lewis, offering such laser-targeted solutions also means investing in two main areas. The first is in organisational psychology to help decode what’s really going on within the culture. “Everybody lies!” laughs Lewis. “We don’t mean to – it’s just that none of us really understand why we think and feel as we do, and so tend to make stuff up when asked to explain ourselves. It’s a natural consequence of having an effective non-conscious brain. What’s more, sometimes we’ll also withhold information when consultants get involved – perhaps understandably, because we fear for our security. But we want to make people better, not redundant.”
The second area of investment is in proprietary digital technology that helps the firm profile and track culture. “We have built – and continue to build – amazing software that can get to accurate, rapid diagnoses of what’s taking place in a culture, and enable interventions to be targeted appropriately.”
A combination of blended interventions, psychology and technology, claims Lewis, uniquely positions the business as an invaluable partner to its clients, and is helping them to scale rapidly.
Challenges and goals
But it is not all plain sailing. Corporate Punk faces some big challenges from a number of quarters. “Management Consulting is changing – it is becoming far more creatively led, and firms such as Accenture are wising up to the need to get good at practice areas such as cultural management. They learn fast, and some good work is emerging,” says Lewis.
Part of Corporate Punk’s challenge, Lewis believes, will be to out-innovate the competition from a service perspective. This means continuing to identify how it can best combine organisational psychology and technology to deliver ever more effective solutions to clients.
Management Consulting is also going to need to change its reputation for ruthless business practice, believes Lewis. “Look, time and again we see that digital businesses are wary of big consultants – sometimes unfairly so. But this points to a latent demand for innovation in the consulting model. Risk and reward need balancing better. I believe that clients want to pay for results – not for the hours that people spend working on getting to them.”
"The ultimate challenge we face is to practice what we preach,” he says. “The churn and burn approach of traditional Professional Services isn’t for us. Our people are all experts, with a minimum of 10 years’ experience in their respective fields. They deserve looking after. We want to create the world’s greatest impact culture at Corporate Punk, for their and our benefit.”
Starting in 2018, the firm intends to publish an annual report on its own cultural development efforts. “We have to hold ourselves to the highest standards of transparency and accountability,” Lewis suggests. “Doing so will continue to build confidence that we are a world-class change provider and hold our feet to the fire in terms of ensuring our culture is the best it can be.”
We asked: away from consulting, what digital tech has most impressed you?
“For all the ways in which productivity-related tech can amplify problems, in the right cultural context it can have a hugely positive impact. Slack is a great example of a digital tool that continues to transform how teams communicate and execute workflow.”