Proxy Battle + Tribal Leadership

The Proxy Battle Process

Identify a company where there are deep rooted organizational issues related to the corporate culture of the organization. If I believe it is likely I can win a proxy battle, I will pay for the expenses and seek to remove the board. I will replace the board with people who have a strong business track record and who have a background in Tribal Leadership.

Tribal Leadership

Research affirms that just as birds flock and fish school, people tribe. A tribe is a naturally forming group of between 20-150 people. For a very small company, this can be a single tribe. For large organizations, there can be many tribes. They can be departments or crossover. For example, it is easy to spot the culture difference between sales and engineering. Tribes operate at different cultural stages, which can positively or negatively impact the results as an organization. A high performing tribe will be three to five times more productive on average and often eight to ten times more productive for deeply underperforming tribes.

Organizational Culture

Author Edgar H. Schein, MIT’s sage of organizational culture, says changing a culture is about, “observation, inquiry, and leverage. This means observing the ways in which an organization’s employees act; deducing (or inquiring about) the ways they think; and putting in place small behavioral changes that lead them, bit by bit, to think about things differently.” (Strategy + Business, Feb 2011)

The Five Cultural Stages

What the New York Times bestselling book, Tribal Leadership does, is map, for the first time, five stages of corporate culture and the unique leverage points to nudge a group forward. The authors grouped the stages based on the language used and the structure of the relationships.

Stage One

Criminal clusters, such as gangs and prisons, where the language is “life sucks,” and people act out in despairingly hostile ways. Life is so unfair for this segment that anything is permissible. Fortunately, we don’t have to deal with this much in the workplace. It is only 2 percent of the total population, while 40 percent in prisons.

Stage Two

The language used here is “my life sucks.” This group makes up 25 percent of workplace tribes and exhibits the behavior of apathetic victims. This is an upgrade from Stage One because even though their life sucks, they see others around them whose life is working. They may have conversations of, “if only I had a college degree,” or “if only I could afford a car,” then my life would work. If you think of the TV show, The Office, this is the culture of the staff. They do the minimum amount of work to get by and don’t show initiative.

Stage Three

This is dominant culture in almost half of U.S. workplace tribes, where the language is “I’m great” and they are thinking, “and you’re not.” In The Office, this is the character played by Steve Carrell. Stage Three people are competitive and work to show everyone that they are smarter and better than anyone else. This personally competitive cultural stage produces limited innovation and almost no collaboration.

Stage Four

Representing 22 percent of tribal cultures, where the language is “we’re great.” Stage four is the zone of Tribal Leadership where productivity improves substantially, three to ten times more than at Stage Three. Teams are the norm and genuine stable partnership is the structure. At this stage, people feel more alive and have more fun. Zappos is a company at Stage Four.

Stage Five

This is the culture of 2 percent of workforce tribes and the language is “life is great.” Here, people focus on realizing potential by making history. Teams at Stage Five have produced remarkable innovations, leading their industries and the economy.

Once Tribal Leaders identify which cultures exist in their tribe, they can use specific leverage points to upgrade the culture. But first, they have to move themselves to Stage Four by shifting the way that they work and the structure of the relationships around them.

Activism Results

After I remove the board, my goal is to stabilize a culture at Stage 4 which then lays the groundwork to take on Stage 5 projects. An organization that moves from Stage 2 - Stage 4 shows an increase of profits by an average of 300-500%, usually within 24 months.