Systems, teams and culture

Accounting Ahead | Original study resource | accountingahead.com.au

Systems, teams and culture

MODULE 6 | 6.2.3 | STUDENT COMPANION

Of the seven S's, systems (above all, the flow of information) and staff (teams and culture) are two of the

most closely tied to operational effectiveness. Managing information and knowledge underpins strategic

capability; managing culture decides whether people carry the strategy or resist it.

What big data and analytics can do

For customers and sales For operations

Capture customer information at every point of contact Track inventory in real time

Keep loyalty-program members engaged Predict when equipment needs maintenance

Target marketing more precisely Make service faster and more reliable

Adjust prices as supply and demand move Automate purchasing

Improve service after the sale Sharpen online advertising

Systems and timely feedback

1. Capture

Data at every point of

contact

2. Manage

The speed, variety

and variability of data

3. Analyse

Patterns and early

warnings

4. Feed back

Timely reports on

each initiative

5. Adjust

Fix the strategy, or

the way it's

implemented

Systems pay off twice: efficiencies, and feedback on whether the strategy is working

Feedback in practice (imagined): Corella Partners' weekly report shows how many advisory proposals each

industry team sent, how many clients accepted, and how satisfied they were after the first meeting, so partners

know within weeks whether the new service is landing. Storing data is not enough: its speed, variety and

variability must be managed first. A systems change that starts without planning, documented processes and the

people to support it can become slow and very costly.

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Accounting Ahead | Original study resource | accountingahead.com.au

Leading teams through change

Bring people into the decisions that shape their own work

Back the team and give it real authority

Recognise good performance

Build team spirit and morale

Create a shared sense of purpose

Corella's agribusiness team decides for itself how to share work between accountants in three offices; its partner

sets direction and clears obstacles.

Culture can be described as the norms of work groups, the dominant values an organisation espouses, or the

philosophy behind everyday decisions. Edgar Schein (1985) defined it more deeply as the basic assumptions a

group has learned while coping with outside pressures and holding itself together, which have worked well

enough to be taught to newcomers as the right way to think and feel.

The layers of culture

Surface: artefacts and norms

Symbols, rituals, office layout, how meetings run, everyday behaviour

Values

What the organisation says matters, such as quality, service or accuracy

Basic assumptions

Taken-for-granted beliefs, such as 'a good accountant is a busy accountant'

Harder to

change

Culture cuts both ways. Hard-to-copy capabilities are often rooted in shared values and routines, and a culture

of trust helps people adapt. But when the environment demands new thinking, the same culture can lock

managers into old ways, allow only gradual change and cause strategic drift. A hospital's culture of caution

protects patients, yet can slow the adoption of a better treatment.

Building a strategy-supportive culture

Action What it involves

Diagnose Which parts of today's culture help the strategy, and which block it?

Make it genuine Convince people the change is real, not cosmetic; communicate openly

Manage conflict Resolve disputes between groups that block shared understanding

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Accounting Ahead | Original study resource | accountingahead.com.au

Action What it involves

Agree the change and

the measures

Build a shared vocabulary, and agree how results will be measured, in the plan

Sustain it Keep reinforcing the culture, and change it again when needed

Role model and select Leaders' visible behaviour signals the new values; fill key roles with people who believe

in the direction

Celebrate Treat high performers as champions of the new way of working

Two hallmarks of an effective culture: managers committed to lasting principles and stakeholders, rather than

to particular ways of operating; and employees open to the level of risk-taking and innovation that suits their

industry.

Six steps for changing culture

1. A clear strategic vision

Say where the organisation is going, and

why

2. Commitment from the top

Leaders visibly back the change

3. Modelled at the top

Executives act out the new behaviour

themselves

4. Realigned systems

Structure, people systems, information and

controls, management style

5. Hiring and induction for fit

Bring in people who fit; part with those who

reject it

6. Ethical and legal conduct

Encouraged and expected throughout

People watch what leaders do far more closely than what they say

Across countries, attitudes to authority, equality, business practice and relationships differ, so international

organisations must understand each local culture before changing their own. At Corella (imagined), the surface

talk is of client service, but the deep assumption is that a good accountant is a busy one, measured in billable

hours; partners now share advisory wins at every meeting, and promotions recognise client outcomes as well as

hours.

Case note: the Ritz-Carlton

The luxury hotel group Ritz-Carlton, part of Marriott International, sets out its culture in its Gold Standards,

including the motto that its people are 'Ladies and Gentlemen serving Ladies and Gentlemen'. Every day, staff in

hotels around the world hold a short line-up to discuss one of the standards and share stories of exceptional

service. Employees may spend up to US$2,000 to resolve a guest's problem without asking a manager. Values,

daily routines and empowerment all point the same way, so the culture delivers the strategy.

Sources: The Ritz-Carlton Hotel Company, Gold Standards; Marriott International; Baldrige Performance Excellence Program award

records.

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Accounting Ahead | Original study resource | accountingahead.com.au

Practice questions

MODULE 6 | 6.2.3 | TRY THESE BEFORE THE WORKED ANSWERS

Question 1 - Feedback for a new strategy

Crustworthy Bakeries (imagined, 30 bakeries) is rolling out pre-ordering through an app and wholesale supply to

cafes. List four pieces of feedback its systems should provide in the first three months, and the decision each

would support.

Feedback the systems should provide Decision it supports

1.

2.

3.

4.

Question 2 - Layers of culture

Bridgewater's new strategy is to win design-and-build contracts that require close collaboration with clients.

Feature of Bridgewater Engineering (imagined) Layer Helps or hinders?

(a) Engineers wear company shirts on site

(b) The company says safety is its first value

(c) Everyone assumes the senior engineer is always right

(d) A toolbox talk starts every Monday

(e) It is taken for granted that clients don't understand

engineering

(f) Awards for innovative designs hang in reception

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Accounting Ahead | Original study resource | accountingahead.com.au

Question 3 - Six steps at a hospital

Wattle Grove Hospital (imagined) wants to move from a doctor-centred culture to a patient-centred one, where

patients and families are partners in decisions. Apply the six steps for changing culture, giving one concrete

action for each.

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Accounting Ahead | Original study resource | accountingahead.com.au

Worked answers

MODULE 6 | 6.2.3 | WORKED ANSWERS - ATTEMPT THE QUESTIONS FIRST

Question 1 - Crustworthy Bakeries (sample)

Feedback Decision it supports

App downloads and weekly pre-orders by bakery Where to promote the app, and whether to keep it

Share of pre-orders collected on time Whether ovens and staffing match morning demand

Wholesale orders, margins and late deliveries by cafe Which cafes to keep, and delivery routes

Waste and unsold stock per bakery Production quantities and pricing

Question 2 - Bridgewater Engineering

Feature Layer Effect on the strategy

(a) Company shirts Surface Neutral

(b) Safety first Values Helps: clients value safe delivery

(c) Senior engineer always right Assumption Hinders: discourages listening and collaboration

(d) Monday toolbox talk Surface Helps: a routine that could include client issues

(e) Clients don't understand engineering Assumption Hinders: undermines collaboration

(f) Innovation awards Surface Helps: signals pride in design

Question 3 - Wattle Grove Hospital (sample)

Step Action

1. Vision 'Every patient a partner in their care', explained with the evidence behind it

2. Commitment The board and executives fund training and track patient experience

3. Modelling Senior doctors visibly involve patients and families in ward rounds

4. Systems Patient-experience measures in reviews; family meetings built into care pathways

5. Hiring and induction Recruit and induct for communication skills; address persistent resistance

6. Ethics Reinforce informed consent, privacy and respect for patients' choices

GLOBAL STRATEGY AND LEADERSHIP | M6 | 6.2.3 | WORKED ANSWERS

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