competing-values-framework

What Is A Competing Values Framework? The Competing Value Framework In A Nutshell

The competing values framework was created by Robert Quinn and John Rohrbaugh, emerging from research into the major characteristics of effective organizations. The competing values framework is a tool used to understand and characterize organizational behaviors and beliefs and how they contribute to success.

Understanding the competing values framework

Based on the study of culture, leadership, structure, and information processing, Quinn and Rohrbaugh discovered 39 different indicators of effectiveness. These were then analyzed for patterns and distilled into two major dimensions of organizational success:

  • Organizational focus –  which may be internal or external. Some companies focused on internal processes to achieve success, while others achieved similar results by maintaining a focus on competitive advantage and rivalry.
  • Organizational structure – is the business flexible or does it prioritize stability? The researchers found that some companies were successful because they were adaptable and agile. Conversely, some succeeded because of stable leadership and process orientation.

The competing values framework has been recognized as one of the 40 most important frameworks in the history of business. It has wide-ranging applications in leadership competency, organizational culture, financial strategy, information processing, and life cycle stage development.

The four major models of the competing values framework

Four major models, or cultural archetypes, are derived from the degree to which a company is internally or externally focused and flexible or stable. 

The interaction between each archetype appears to send conflicting messages, which gives the competing values framework its name. For instance, an organization may need to be flexible while also displaying control and stability at the same time.

With that said, let’s take a look at each archetype below:

  1. Clan (collaborative) – an organization underpinned by shared values such as stability, cohesion, and participation. The culture is dominated by an emphasis on personal development, mentorship, empathy, and openness. Company effectiveness is also bolstered by risk aversion.
  2. Adhocracy (creative) – adhocracies are innovative, externally focussed, and flexible. Creative and diverse ideas drive the company forward because leadership is not afraid to take risks. This type of organization is supremely adept at navigating uncertainty, ambiguity, and instability. 
  3. Hierarchy (controlling) – these organizations are focused internally and owe their success to control, order, and continuous improvement. Culture is overtly formal and procedural. Leadership makes long-term predictions based on efficient, capable, and stable processes that are known quantities.
  4. Market (competing) – competing companies are driven by profitability, market share, and goal achievement. Success is acquired with an aggressive and decisive mindset that is energized by the presence of competitors. Winning through hard work and productivity is actively pursued. With a relatively stable structure, market organizations create a strong brand identity by delivering high customer value.

The competing values framework and leadership

The organizational values of the framework can also be used to model leadership styles.

Below is a brief look at some leadership types based on the hierarchies listed in the previous section:

  1. Mentor, team builder, facilitator (Clan) – these leaders value development, communication, and commitment. 
  2. Innovator, visionary, entrepreneur (Adhocracy) – these leaders preach values around agility, transformation, and innovation.
  3. Coordinator, organizer, monitor (Hierarchy) – these leaders prefer consistency, uniformity, predictability, timeliness, and efficiency.
  4. Producer, competitor, go-getter (Market) – these leaders are primarily concerned with attaining dominant market share, goal attainment, and profitability.

Competing values framework examples

To conclude, we’ll discuss some examples from each of the four main archetypes of the competing values framework.

1 – Clan (collaborative)

The clan culture is often found in start-ups and smaller companies, but it can also be found in companies that employ the franchise model.

One particular example is Tom’s of Maine, an American business and Certified B Corporation that manufactures natural health products such as toothpaste, soap, and deodorant.

Founder Tom Chappell stressed the importance of respectful relationships between co-workers, customers, owners, suppliers, the community, and the environment.

Employees are provided with a safe environment to grow and learn and the culture is more reminiscent of an extended family, with Chappell serving as a mentor and parental figure to subordinates.

2 – Adhocracy (creative)

Pixar has a flat organizational structure which creates the ideal conditions for adhocracy to thrive.

The company has a proven track record of both artistic and technological innovations and is known as a leading pioneer in computer animation.

Pixar is proud to proclaim that, unlike its competitors, it has never purchased scripts or ideas from external parties.

All of the company’s worlds and stories from movies such as Toy Story, Finding Nemo, and Cars came from a creative team who were encouraged to take risks and push the metaphorical envelope. 

Indeed, Pixar understands that true creative talent is rare and that management’s role is to not avoid risk entirely but ensure the company can recover easily when inevitable failures occur.

3 – Hierarchy (controlling)

Most investment banks such as Goldman Sachs operate under the hierarchical model with a strict and inflexible structure.

Each is characterized by the following levels with only minor derivations between companies:

  • Intern.
  • Analyst.
  • Associate.
  • Vice President.
  • Director or Senior Vice President, and
  • Managing Director.

Each level is associated with certain rituals, benefits, and responsibilities, and employees need to be competitive and possess extreme levels of attention to detail.

Progression through these levels is well defined and has not changed considerably over time. 

To encourage employees to work under the intense pressure of a hierarchical structure, promotions are frequent and there is little exclusivity to the titles in most investment banks.

Goldman Sachs, for example, has over 10,000 vice presidents and many firms also have thousands of managing directors.

4 – Market (competing)

Amazon is an oft-cited example of the market culture. Numerous former employees have spoken about a culture that expected the very best they could deliver and to be constantly climbing the ladder.

There were also claims in a 2015 New York Times article that if employees hit the wall – a phrase used to describe one reaching their emotional or physical limits – they were told the only solution was to “climb the wall”.

While the company has made efforts to address its controversial culture in recent years, Amazon’s obvious focus to be the best means it embodies the best (and worst) aspects of the market model for now.

One look at the company’s leadership principles confirms this, with the blurb under the “Deliver results” principle reading as follows: “Leaders focus on the key inputs for their business and deliver them with the right quality and in a timely fashion. Despite setbacks, they rise to the occasion and never settle.

Key takeaways:

  • The competing values framework categorizes the values, beliefs, and behaviors that make up organizational and individual success.
  • The competing values framework measures success in terms of organizational structure and focus, two dimensions based on the quantitative analysis of 39 effectiveness indicators.
  • The competing values framework suggests four different archetypes, with each displaying varying degrees of structure and focus. They are clan, adhocracy, hierarchy, and market. The framework also details the leadership styles that thrive in each archetype.

Connected Analysis Frameworks

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Agile Business Analysis

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Paired Comparison Analysis

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Monte Carlo Analysis

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Cost-Benefit Analysis

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CATWOE Analysis

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VTDF Framework

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Pareto Analysis

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Comparable Analysis

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SWOT Analysis

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PESTEL Analysis

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Financial Modeling

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Value Investing

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Buffet Indicator

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The Buffet Indicator is a measure of the total value of all publicly-traded stocks in a country divided by that country’s GDP. It’s a measure and ratio to evaluate whether a market is undervalued or overvalued. It’s one of Warren Buffet’s favorite measures as a warning that financial markets might be overvalued and riskier.

Financial Analysis

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Post-Mortem Analysis

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Retrospective Analysis

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Root Cause Analysis

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Blindspot Analysis

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Break-even Analysis

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Decision Analysis

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DESTEP Analysis

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STEEP Analysis

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The STEEP analysis is a tool used to map the external factors that impact an organization. STEEP stands for the five key areas on which the analysis focuses: socio-cultural, technological, economic, environmental/ecological, and political. Usually, the STEEP analysis is complementary or alternative to other methods such as SWOT or PESTEL analyses.

STEEPLE Analysis

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