Tài liệu The Culture Cycle pptx

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© 2012 by James Heskett
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Library of Congress Cataloging-in-Publication Data:
Heskett, James L.
The culture cycle : how to shape the unseen force that transforms performance / James L.
Heskett.
p. cm.
ISBN 978-0-13-277978-4 (hbk. : alk. paper)
1. Corporate culture. 2. Organizational behavior. 3. Organizational effectiveness. 4.
Organizational change. I. Title.
HD58.7.H475 2012
658.3 dc23
2011020182
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For my beloved editor, Marilyn,
our children, Sarah, Charles, and Ben,
and grandchildren, Olivia and Sam
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CONTENTS vii
Contents
Acknowledgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . x
About the Author . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xii
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
Two Visits, One Story . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Questions to Be Addressed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
How This Book Is Organized . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13
Chapter 1 A Crisis in Organization Culture? . . . . . . . . . . . . . . . . . . . . . 15
What Culture Is and Isn’t . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Stealth Weapon or Humanizing Effort? . . . . . . . . . . . . . . . . . . . . . .17
The Development of Interest in Organization Culture . . . . . . . . . . 19
The Nature of an Organization’s Culture . . . . . . . . . . . . . . . . . . . . . 22
Culture and the Workplace . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Culture and the Long-Term Erosion of Job Satisfaction. . . . . . . . . 38
Chapter 2 Culture as “Know How” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
ING Direct: Shaping a Culture. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Culture and Purpose (“Know Why”). . . . . . . . . . . . . . . . . . . . . . . . . 45
Culture and Strategy (“Know What, When, Where”) . . . . . . . . . . . 46
Culture and Execution (“Know Who”) . . . . . . . . . . . . . . . . . . . . . . . 46
How Successful Managers View the Importance of Culture. . . . . . 48
Culture in the Context of Purpose, Strategy, and Execution. . . . . . 49
Chapter 3 Culture: A Multi-edged Sword. . . . . . . . . . . . . . . . . . . . . . . . 55
Nature and Results of the 1992 Study . . . . . . . . . . . . . . . . . . . . . . . 59
Strong Cultures Affect Performance . . . . . . . . . . . . . . . . . . . . . . . . 60
Strength of Culture Is Not Correlated with Good Performance . . . . 61
Adaptability Keys Long-Term Success . . . . . . . . . . . . . . . . . . . . . . . 61
The Question of Fit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
The Role of Leadership. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
Chapter 4 Culture in an Organization’s Life Cycle . . . . . . . . . . . . . . . . 69
How Cultures Are Formed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
The Process of Culture Formation . . . . . . . . . . . . . . . . . . . . . . . . . . 72
How Cultures Are Articulated and Institutionalized . . . . . . . . . . . . 72
How Cultures Are Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
Enemies of an Effective Culture. . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
How Cultures Are Renewed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
Reinforcing Effective Cultures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
Chapter 5 Economics of Culture: The “Four Rs”. . . . . . . . . . . . . . . . . . 95
Economic Advantages of an Effective Culture: The “Four Rs” . . . . .97
Culture Impact Model. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114
Several Caveats . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114
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Chapter 6 The Culture Cycle: Measuring Effectiveness . . . . . . . . . . . 119
USAA: Effectiveness Through Trust. . . . . . . . . . . . . . . . . . . . . . . . 121
Nucor Steel: A Study in Learning, Accountability,
Self-Direction, and Innovation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124
Toyota and the Importance of Alignment and Agility . . . . . . . . . . 128
Measuring a Culture’s Strength . . . . . . . . . . . . . . . . . . . . . . . . . . . 132
Measuring a Culture’s Health: The Culture Cycle. . . . . . . . . . . . . 134
Measuring a Culture’s Fit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 146
Caveats . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 147
Chapter 7 The Four R Model: A Field Test . . . . . . . . . . . . . . . . . . . . . 151
The Setting: RTL, Inc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 151
The Research and Findings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 152
The Blind Results. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 156
Blind Result Comparisons. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 158
Caveats Regarding the Blind Estimates . . . . . . . . . . . . . . . . . . . . . 159
Comparisons of Culture Cycle Elements . . . . . . . . . . . . . . . . . . . . 160
Management’s Interpretation of What Happened. . . . . . . . . . . . . 164
Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 165
Chapter 8 Culture and Innovation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 169
The Culture Cycle and 3M Innovation. . . . . . . . . . . . . . . . . . . . . . 172
Levels of Innovation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 174
Adaptability and Innovation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 179
Value “Clusters” That Foster Innovation . . . . . . . . . . . . . . . . . . . . 179
Innovation “Value Clusters” at Apple . . . . . . . . . . . . . . . . . . . . . . . 187
Chapter 9 Culture and Adversity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 197
Adversity and Response at Intuit . . . . . . . . . . . . . . . . . . . . . . . . . . 197
Adversity and Response at BP. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 200
9/11 and the Southwest Airlines Response. . . . . . . . . . . . . . . . . . . 203
Adversity and Response at Goldman Sachs . . . . . . . . . . . . . . . . . . 204
So What? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 209
The Fit Between Culture, Leadership Style, and the
Nature of Adversity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 210
How Cultures Help and Hurt in Times of Adversity . . . . . . . . . . . 212
Culture as a “Filter” Between Adversity and Performance . . . . . . 214
Chapter 10 Subcultures and Global Strategies. . . . . . . . . . . . . . . . . . . . 219
Enter the Culturalists . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 221
Global Management Challenges from Cultural Differences . . . . . .223
What Do These Vignettes Suggest? . . . . . . . . . . . . . . . . . . . . . . . . 231
The Selection of Leaders. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 239
Managing the Relationship Between Headquarters
and Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 241
Organizing, Coordinating, and Controlling Effort . . . . . . . . . . . . . 243
Implications for Subcultures in General. . . . . . . . . . . . . . . . . . . . . 245
viii T
HE CULTURE CYCLE
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CONTENTS ix
Chapter 11 Mission-Driven Organizations: Special Challenges . . . . . . . 251
Supergrowth. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 251
Loss of Focus: “Mission Creep” . . . . . . . . . . . . . . . . . . . . . . . . . . . 253
Making a Large Organization Seem Small . . . . . . . . . . . . . . . . . . . 255
Deploying Human Resources: The Challenge of
Volunteer Labor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 255
Measuring and Rewarding Effectiveness Among an
Organization’s Subcultures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 257
Coordinating Efforts with Other Mission-Driven Organizations . . .259
Managing Board and Leadership Conflicts Concerning
Basic Assumptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 260
Controlling Zealous Behavior . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 263
Chapter 12 Dealing with Forces That Challenge Organization
Cultures Today . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 267
Information and Communications Technology . . . . . . . . . . . . . . . 268
Increasing Emphasis on Transparency . . . . . . . . . . . . . . . . . . . . . . 270
New Generations of Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . 272
Team-Based Work . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 276
Employment and Deployment Strategies. . . . . . . . . . . . . . . . . . . . 277
The Rise of Free Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .281
The Psychological Shrinking of the World . . . . . . . . . . . . . . . . . . . 281
Chapter 13 Leading Culture Change . . . . . . . . . . . . . . . . . . . . . . . . . . . 285
How Do You Know Change Is Needed? . . . . . . . . . . . . . . . . . . . . 288
Monitoring Links in the Culture Cycle: RTL, Inc. Revisited . . . . . .289
Changing a Culture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 297
Sustaining Culture Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 305
Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 309
The Role of the Leader in Reshaping Culture . . . . . . . . . . . . . . . . 310
Chapter 14 Answers and Questions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 317
Characteristics of Effective Cultures . . . . . . . . . . . . . . . . . . . . . . . 318
Economic Outcomes: Profit and Satisfied Stakeholders . . . . . . . . 320
Behavioral Outcomes: Great Places to Work . . . . . . . . . . . . . . . . . 320
Some Final Thoughts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 322
Appendix A Sample Questions for Measuring the Strength and
Health of a Culture. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 325
Appendix B Four R Assumptions and Computations . . . . . . . . . . . . . . . 329
Appendix C Complete Results of Employee Surveys, 2009 and 2010,
for Three RTL, Inc. Offices . . . . . . . . . . . . . . . . . . . . . . . . . 333
Endnotes 339
Index 361
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Acknowledgments
A book like this one is the product of a number of experiences and
the friends and colleagues who shared them with me.
Material that I originally collected in case form supplied many
ideas. It brought me into contact with case protagonists such as
Luciano Benetton, Cofounder of the company that bears his name; Bill
Bratton, formerly Commissioner of the Boston, New York City, and
Los Angeles Police Departments; Scott Cook, Cofounder and Chair-
man of the Executive Committee of Intuit; Frances Hesselbein, when
she was CEO of Girl Scouts of the USA (and since); James Kinnear,
formerly CEO of Texaco; Arkadi Kuhlmann, CEO of ING Direct;
Gary Loveman, Chairman, President, and CEO of Caesars Entertain-
ment Corp.; John Morgridge, formerly Chairman and CEO of Cisco
Systems; Bill Pollard, formerly Chairman and CEO of The Service-
Master Company; Bill Strickland, CEO of the Manchester Bidwell
Corporation; Lorenzo Zambrano, Chairman and CEO of CEMEX;
and the people I came to know over the years and whose acquaintance
I value at Southwest Airlines. Among them are Herb Kelleher, Execu-
tive Chairman and CEO Emeritus; Colleen Barrett, President Emeri-
tus; CEO Gary Kelly; Executive Vice President and COO Mike Van de
Ven; Senior Vice President Culture and Communications Ginger
Hardage; Senior Vice President and Chief Marketing Officer Dave
Ridley; and Vice President Network Planning John Jamotta.
Others who are not the subject of cases I’ve authored or coau-
thored, but who were instrumental in contributing ideas to the book,
whether or not they are aware of it, include Pete Blackshaw, Cofounder
of PlanetFeedback.com; John Bogle, founder of The Vanguard
Group; James Goodnight, Cofounder and CEO of SAS; Bill Hybels,
Founder of the Willow Creek Community Church; Eleanor Josaitis,
CEO of Focus: HOPE; the late Will Rodgers of what was then the
Management Analysis Center, with whom I conducted the early con-
sulting work at GM that is described in the book; and Les Wexner,
Founder, Chairman, and CEO of Limited Brands.
Still other executives who must remain anonymous supplied data
on which analyses in Chapters 7 and 13 are based.
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ACKNOWLEDGMENTS xi
Those who read portions of the manuscript and contributed a
number of ideas were Tom Watson, Bruce Nelson, Brian Emsell, and
Brian Curran of The Omnicom Group; Jane Ramsey, Ezra Singer, Joe
Simonet, and Jason Tostevin of Limited Brands; Dan Maher; and
Dan O’Brien.
Coauthors of previous books and cases who have had a strong
influence on my thinking are Earl Sasser, with whom I have written
five books and to whom I owe a real debt of gratitude; Len Schlesinger,
now President of Babson College and a coauthor on two books, always
a source of stimulating ideas; and Joe Wheeler, Chris Hart, Roger
Hallowell, and, of course, John Kotter, whose work on the impact of
culture on performance and subsequently the management of change
has helped countless practitioners and academics see issues associ-
ated with these topics more clearly.
The persons on these lists have been great teachers. I feel fortu-
nate to still be learning from many of them.
While I’ll take responsibility for any inaccuracies in the material,
I was aided by an outstanding research associate, fact-digger, and
fact-checker, Chris Allen. Jacqueline Archer and Janice Simmons
provided important help with graphics. Throughout the project, Paula
Alexander and Luz Velazquez supplied all-around assistance. All are
associated with the Harvard Business School, where I have had the
privilege of teaching and researching under six deans. All have pro-
vided the leadership that has enabled an inspiring group of colleagues
to, as the school’s mission states, “educate leaders who contribute to
the well-being of society,” a fitting statement for a book like this.
Near the end of the substantive work on the manuscript, I sent
portions of it to three publishers. One didn’t bother to reply. Of the
two that gave it serious consideration, Jeanne Glasser, Executive Edi-
tor at FT Press, was most enthusiastic about it. If it hadn’t been for
Bob Wallace, a longtime friend and editor, and his acquaintance at
FT Press, Timothy Moore, the proposal might not have even reached
Jeanne’s desk.
Finally, I owe the greatest debt to the person who has been at my
side through at least a dozen of these book-length writing projects, my
partner, Marilyn.
Jim Heskett
Cambridge, Massachusetts
June 2011
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About the Author
James Heskett is Baker Foundation Professor Emeritus at the
Harvard Business School. He joined the faculty in 1965 after com-
pleting his MBA and Ph.D. degrees at Stanford University and teach-
ing at The Ohio State University. He has served as president of
Logistics Systems, Inc. and on the boards of more than a dozen cor-
porations and not-for-profit organizations. In addition, he has con-
sulted for the management of companies in the U.S., Europe, Asia,
and Latin America. He is currently a director of Limited Brands, Inc.
While at Harvard Business School, he taught courses in marketing,
business logistics, service management, general management, and
entrepreneurial management. At one time he served as Senior Associ-
ate Dean responsible for all academic programs. He has written arti-
cles for the Harvard Business Review , Sloan Management Review,
and other publications. He also cowrote Service Breakthroughs , The
Service Profit Chain , The Ownership Quotient , and Corporate Cul-
ture and Performance, among other books .
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1
I n t r o d u c t i o n
An organization’s culture matters a lot. That’s what John Kotter
and I concluded from a three-year study of the relationship between
corporate culture and performance in the early 1990s. CEOs gener-
ally agree, although I’m left wondering whether some of them really
believe it or whether it’s something they’ve been conditioned to say
when reminded to do so. It’s confirmed by even the best (5-star)
investment analysts on Wall Street, a group that we might assume
would look only to financial measures in recommending investments.
They told us that culture helps corporate performance in higher-
performing firms and hurts it in lower-performing firms.
1

But if culture is a force, it is an unseen force, most of the time
taken for granted. Its importance sometimes rears its head when two
organizations with strong and very different cultures, such as Chase
Manhattan bank and J. P. Morgan, are merged. We become inter-
ested in culture when a foreign culture appears to produce especially
productive behaviors, as in Japan in the 1980s. We speculate on how
much of the positive difference between a company’s market value
and its book value is due to intangible assets such as high employee
engagement,
2
productivity, and innovation. These assets are called
organizational capital and are as hard to measure as they are hard to
replicate.
3
We wonder about the role that the culture at companies
such as Lehman Brothers, Enron, and Worldcom played in fostering
behaviors that led to their downfall several years ago. And as we saw
at GM, we hook our star to “a culture that can really win” as part of a
herculean effort to emerge from bankruptcy.
4

In many organizations, culture is the most potent and hard-to-
replicate source of competitive advantage—far more important, for
example, than technological innovation. By the time the superior