<p>Leveraging Intangibles: Creating Shared Mindset <br />
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As we have learned more about the intangibles of business-quality of leadership, the ability to make things happen quickly, a clear growth strategy, strong functional competencies, and brand recognition-we have seen that strong leaders and successful firms make choices that affect not only what happens inside their firm but also how investors value those decisions.</p>
<p>Intangibles become visible when they are actively understood and managed by leaders in an organization. When this is done, employee commitment, customer intimacy, and investor confidence rise. (For more information on managing intangibles, look for the paperback release of Dave Ulrich and Norm Smallwood´s <em><a href="http://www.maildogmanager.com/link.html?url=5&client=therblgroup&campaign=8&email=bpianezza@hr.com" target="_blank">How Leaders Create Value</a></em>, scheduled for May 2006.) One intangible that many leaders rightly address in change efforts is organization culture, or shared mindset.</p>
<p><strong>Shared Mindset Creates Intangible Value</strong><br />
An organization begins to have a shared mindset when management approaches outlive any one executive and involve more than a single management practice, fad, or era. It represents an enduring thought pattern or framework that everyone in your organization brings to all activities. A shared mindset exists when customers and investors outside and employees inside have a common view of the organization´s identity.</p>
<p>A shared mindset produces intangible value when it creates an identity or positive reputation in the mind of employees, customers, and investors that is tied not to a person or product but to the firm itself. Employee commitment, productivity, and behavior both shape and are shaped by the identity of the firm. Investors also tend to be affected by the extent to which employees have a shared mindset. When every contact with a company reveals the same set of values and goals, it sends a powerful message.</p>
<p>We have worked with more than a hundred executive teams to create a desired identity or shared mindset. Regardless of scope, the process for crafting a shared mindset is similar.</p>
<p><strong>Phase 1: Create the Desired Identity</strong></p>
<p>1. Ask each individual to write a response to the question: "What are the top three things we want to be known for by our best customers in the future?</p>
<p>2. Collect the responses and categorize them, sorting rigorously. At this point in the exercise, the goal is to see the extent to which a shared mindset exists among the top team, which requires exactness of language and ideas.</p>
<p>3. Add the total number of responses in the top three categories and divide by total responses for a rough measure of shared mindset. Our rule of thumb is that a desired level is 80 percent-rare on the first round.</p>
<p>4. Discuss themes by clustering and defining ideas that emerge from the responses. Redo the exercise until an 80 percent consensus on the top three items can be reached.</p>
<p>5. Put the themes into words that resonate with customers and then test the articulated mindset with customers in one-on-one meetings, focus groups, and other customer contact and research methods to make sure it is right. Ensuring that the words resonate with target customers is crucial-if the desired mindset will not influence buying choices, it is the wrong one.</p>
<p><strong>Phase 2: Determine How to Make the Identity Real to Customers</strong><br />
Once you have the confidence your identity will have meaning and impact for target customers, you must find ways to make this identity real to those customers in their terms. This can be done by finding points of contact-touch points-between the firm and the target customer and creating ways to make the desired identity real in each one.</p>
<p><strong>Phase 3: Determine How to Make the Identity Real to Employees.</strong><br />
To make the identity real for customers, employees must reflect the shared mindset. To encourage this, companies must create plans and systems that ensure that employees´ daily actions reflect the shared mindset. Several critical factors for leaders who want to make the mindset real to every employee include treatment of talent, reward systems, and training and development.</p>
<p><strong>Phase 4: Build an Action Plan for Implementation.</strong><br />
Developing a shared mindset will change how employees, customers, and investors think and act. When your employees behave in ways that customers would like them to behave, employees, customers, and investors are all well served. In the fourth phase, the ideas from preceding phases are translated to action. To be successful, action plans need to be specific, start small, and have leadership support.</p>
<p>Developing a shared mindset is just one example of how an intangible can add value to an organization. When leaders understand how they can build intangible value, they can begin to identity specific actions they can take to strengthen their firm brand and market value. Recent events illustrate how business leaders´ impact on the market value of their companies can be a double-edged sword. Some executives inflated market value through deceit and manipulation-and ultimately devastated their companies. Real leaders build tangible and intangible value and increased the market value of their businesses for the long term.</p>
<p>For more information on building a shared mindset, see "Building Intangible Value from the Outside In" in <em>Leader to Leader</em>, Spring 2003.</p>
<p>Originally posted on HR.com on Nov. 21, 2005.</p>
