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Creating A Culture of Profitability

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133 views17 pages

Creating A Culture of Profitability

Uploaded by

Isha Kain
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

Creating a Culture

of Profitability
A Revolutionary Model for Managing Culture

by Rob and Aviva Kleinbaum


Editors: Dave and Debbie Charlesworth
Associate Editor: Nancy Winchester
Cover Concept: Sarah Golliher

Copyright © 2013 by Rob Kleinbaum and Probabilistic Publishing


All rights reserved.

Initial printing: October, 2013

Probabilistic Publishing [Link]


e-mail: dave@[Link]
Florida:
5715 NW 67th Ct
Gainesville, FL 32653
352-338-1789

Texas:
1702 Hodge Lake Ln
Sugar Land, TX 77478
281-277-4006

No part of this book may be reproduced, stored in a retrieval system or transcribed,


in any form or by any means, electronic, mechanical, photocopying, recording, or
otherwise without the prior written permission of the publisher or the author.

Written, designed, and printed in the United States of America.

Library of Congress Control Number: in progress

ISBN: 096479389–X
ISBN 13: 9780964793897

iv
To our three sons: Ian, Aric, and Danny, who taught us more
than we are willing to admit.

v
Preface and
Acknowledgments
First, a note on “voice.” We go back and forth between the first
person singular and plural. When we use singular voice, Rob is talk-
ing about his experiences (usually in a context that should make it
obvious). We hope we have not caused any unnecessary confusion by
switching back and forth between singular and plural pronouns. We
have done our best to keep the tone light and informal. The subject is
serious, but there is no reason the language has to be dull.
Thanks to Lawrence Harrison for bringing us into his work family
and for creating the immense intellectual foundation on which the work
rests, as well as his insightful and detailed comments on this work.
Three successful but different businessmen – David Jerome, Greg
Powel, and Nick Pudar – offered wonderful advice. The participants
at the Society of Decision Professionals 2013 Workshop, “Managing
Alligators,” were generous and thoughtful in their suggestions; they
also reinforced our belief in the applicability of these ideas to manag-
ing projects.
The brilliant and eclectic participants of the Samuel Huntington
Memorial Symposium: Culture, Culture Change, and Economic Development
that took place in Moscow in 2010 provided a world class forum for
discussing the main ideas in this book.
Our editors, Dave and Debbie Charlesworth, provided constant
comments that shaped and focused the ideas, bringing their own long
experience in business as well as their editing skills to bear on the
work. Nancy Winchester offered helpful and gracious comments well
beyond the call of duty.
Ian Mutchnick took time out of his crazy schedule as a neurosur-
geon to make valuable comments about the neurological underpinnings
of culture; this could well be the wave of the future. Dan Kleinbaum
has been a deep contributor to this work for the last two years. It
would not be here without his thoughtfulness, support, and effort. It
is a great blessing to have worked together.
This book has been a joint labor of love between the two of us over
the last five years directly and over the last 15 years working together,
always trying to blend our different point of views. It helps to be in
love with your co-author, especially when talking loudly through the
disagreements. We are each here because of the other.

vii
Publisher’s Note
Two years ago Rob Kleinbaum and I talked at a Decision Analysis
Affinity Group (DAAG) conference about a book he had started work-
ing on. Rob and his wife Aviva had studied fundamental sociological
research that Lawrence Harrison and others had been doing on deter-
mining why some cultures succeed and others fail and were extending
this thinking to a business context. This concept was intriguing, so we
agreed to undertake the project. We went through many discussions
and revisions of the text, especially as we got feedback from reviewers
as noted in the Preface. In fact, it was just over a year ago when we
provided our first comments back to Rob on the initial manuscript.
We believe the result is a powerful framework that gives manag-
ers and leaders the tools they need to create sustainable and profitable
cultures within their organizations.
You might wonder why a publisher of decision analysis and
game theory books would be interested in a book on business cul-
ture. The answer is simple: a company won’t realize the full benefits
of implementing decision analysis unless the culture is positive. The
Kleinbaums have systematized, organized, and codified what most of
us who work have intuited but never organized.
Another distinction relative to decision analysis (DA) is that DA
can sometimes be implemented, at least partially, from the ground up
(although a medium to high level sponsor is usually necessary). To
change the culture, the top person within a unit or a team or a com-
pany must be either the instigator or at least integrally involved in and
supportive of the effort.

We suggest that you first read the book for an overall view of the
content. Then refer to Chapter 12, which discusses how to get started.
An example from my background may be useful in illustrating some
of the potential benefits of changing culture and providing direction
on successful implementation.
I once worked as a technical team leader in a manufacturing plant.
It was not a fun job – many of the negative cultural traits you’re going
to read about in this book were present. We probably had negatives
relative to most of Rob’s 13 aspects of cultural infrastructure (see
Table 2.1).
In addition to manufacturing a large slate of products, our Divi-
sion also had to interface with R&D and marketing. R&D would de-
velop something to fill a marketing need, they’d sample the customer,

ix
and if the customer liked it, we’d have to scale it up. Many times
there were significant problems with the scale up, which would anger
marketing and R&D (they’d blame us and tell headquarters that were
incompetent).
The Production Superintendent and the Division team leads (the
Division Leadership Team), recognizing that we had an image problem
relative the rest of the business, decided to try to improve our image.
I had connectivity to an excellent Organizational Development “guru”
named Ed Klinge, and Ed gave us a framework to use for us to work
on the image problem. His framework was much more basic and
“generic” than what the Kleinbaums present here, but it illustrates a
successful approach.
We did a workshop, and started with the question, “What is our
perception of our own image?” We filled several chart pad pages of
comments, mostly negative. The next question was, “What do we do
that contributes to this image?” Again, chart pad pages of stuff, 90%
of it negative. This was very sobering. At the end of that exercise (the
first phase of Workshop) everybody was really depressed, as we real-
ized that we were our own collective worst enemy!
We condensed and reviewed our lists with the upper management
on-site (no way we would have trusted the headquarters managers
with any of this!), and they apologized, as they didn’t realize that
the climate was so bad. Then we collectively discussed the question,
“Which of these items is the most important factor on our list?” There
was a healthy debate, which we captured and we then agreed on the
top one. The next question was, “What steps do we need to take
to address this item?” This turned into a plan and time line on the
whiteboard, which we all contributed to, agreed to do, and agreed to
hold ourselves accountable for doing. We implemented the plan and
the site upper management was right there with us supporting us. We
completed the first item and then came back and did the second item
on the list. After we did items 3 and 4, our performance, communica-
tion, and subsequently our reputation started to improve. We were
slowly changing the culture.
These changes were subsequently put to the test. We had a new
product that we failed several times to make in our equipment. The
Production Superintendent had agreed to kill it. The marketing guy
called and pleaded with me to intervene, as he had customers that
loved the product samples they had obtained from R&D. We convened
a workshop and used a very similar framework, but this time included
R&D (which had heretofore been considered the enemy). It took 1/2

x
day just to ground everybody on the history of the product’s R&D and
the previous failed attempts. The workshop took two days. We ended
up with a VERY detailed multi-color time line on the white-board wall
of the conference room which everybody bought in to (even R&D and
marketing) and they all had a role. Upon the “last chance” production
run, we nailed it. One of the R&D team leaders spent a whole shift
working at the front of the process helping an operator de-lump feed
materials, which was unheard of. Even the most cynical operators were
excited when the thing worked. We did a look-back workshop and
agreed to work together (rather than blame each other) on subsequent
new products. We changed the culture. It can be done!

The lessons learned relative to this book include:


1. Top Down. Culture change has to be top down, but in our
case, a member of the Leadership Team (me) did catalyze
it. I was fortunate to have a progressive and competent
Division Superintendent – we would not have been suc-
cessful without his active involvement, participation, and
support.
2. No Shotguns! Don’t take a “shotgun” approach to changing
culture – pick out the top one or two items and address
them thoroughly before moving on to the next items that
you need to work on.
3. Culture can be improved. This book gives you a powerful tool
kit to get started.
We would sincerely like to hear your comments relative to this book,
especially successful examples. Please e-mail dave@decisions-books.
com, and we sincerely wish you success in your endeavors.

Dave and Debbie Charlesworth


Probabilistic Publishing
October, 2013

xi
Contents
1 Introduction: A Better Way..............................................................1
1.1 What do we Mean by “Culture?”...............................................3
1.2 What is a “Good” Culture?........................................................4
1.3 How this Book is Organized......................................................6
2 A Profitable Culture.........................................................................9
2.1 Instrumental Values.................................................................11
2.2 Cultural Infrastructure.............................................................12
2.3 Culture’s Self-Preserving Mechanisms....................................22
2.4 Adaptability..............................................................................25
2.5 Cultural Map Summary............................................................26
3 Managing Culture – Overview.......................................................29
3.1 General Symptoms...................................................................31
4 Diagnosis and Treatment: Core Purpose........................................35
4.1 Forces of Entropy.....................................................................35
4.2 Symptoms................................................................................38
4.3 Senior Management Remedies.................................................41
4.4 Middle Management Remedies................................................47
5 Diagnosis and Treatment: Instrumental Values.............................49
6 Diagnosis and Treatment: External Focus......................................51
6.1 Forces of Entropy.....................................................................51
6.2 Symptoms................................................................................54
6.3 Senior Management Remedies.................................................60
6.4 Middle Management Remedies................................................62
7 Diagnosis and Treatment: Internal Trust........................................65
7.1 Forces of Entropy.....................................................................65
7.2 Symptoms of Internal Mistrust................................................68
7.3 Senior Management Remedies . .............................................72
7.4 Middle Management Remedies................................................75
8 Diagnosis and Treatment: Leadership............................................77
8.1 Forces of Entropy.....................................................................78
8.2 Symptoms................................................................................80
8.3 Senior Management Remedies.................................................82
8.4 Middle Management Remedies................................................85
9 Diagnosis and Treatment: Time Orientation..................................89
9.1 Forces of Entropy.....................................................................90
9.2 Symptoms................................................................................91
9.3 Senior Management Remedies.................................................95
9.4 Middle Management Remedies................................................98

xii
10 Diagnosis and Treatment: The Basics........................................101
10.1 Forces of Entropy.................................................................102
10.2 Symptoms............................................................................102
10.3 Remedies..............................................................................105
11 Managing Cultural Law Enforcement........................................107
11.1 Financial Resource Allocation Processes.............................108
11.2 Human Resources and Compensation.................................111
11.3 External Communication Rules...........................................113
11.4 Internal Communication Rules............................................114
11.5 Process Enforcers.................................................................116
11.6 People...................................................................................116
11.7 Understanding the Rules.....................................................117
12 Getting Started: Organizational Placement and First Steps.......119
12.1 CEO and Senior Management..............................................119
12.2 Getting Started.....................................................................120
12.3 An Illustration......................................................................122
12.4 Managers..............................................................................124
13 Changing a Strong but Unhealthy Culture................................127
13.1 Change People......................................................................128
13.2 Respect and Confidence.......................................................129
13.3 GM Today – An Example Turnaround?................................130
14 Managing Alligators: Making Projects Successful......................133
14.1 Mapping Culture into Project Quality..................................135
14.2 Creating Alligator Management Plans.................................141
14.3 Example: Product Development Strategy............................141
14.4 Applicability.........................................................................146
15 Culture and Profitability: A Test................................................149
15.1 Sample Selection Bias and Halo Effect.................................149
15.2 Objective Data and Avoiding the Halo.................................151
15.3 Results.................................................................................153
15.4 Caveats.................................................................................154
15.5 Conclusion...........................................................................155
16 Culture as a Limit to Growth.....................................................157
17 Public Policy and Corporate Culture..........................................159
18 Conclusion.................................................................................163
Appendix I: Lawrence Harrison’s Typology of Cultural Capital.....165
Appendix II: Retooling GM’s Culture.............................................173
Appendix III: Why Did Such a Nice Guy Finish Last?....................183
Index................................................................................................187
About the Authors..........................................................................191

xiii
1
Introduction: A Better Way
I knew that corporate culture carried much of the blame when,
after 25 years of working either for or with General Motors (GM), I
watched the company deteriorate and go bankrupt.
GM’s response to the crisis in 2008 and early 2009 reflected its
fundamental beliefs about the way the world works and was consis-
tent with what it had been doing for the last 30 years: cut “structural
costs,” wait for future products to bring salvation, and count on cash
from other regions to help prop things up. In the meantime, make no
fundamental change in the business, its structure, or people running
it (as they are clearly the best and brightest, know how to manage in
a serious way, and have a sound plan). Proposed changes were touted
as “profound” and “fundamental” but were really the minimum change
from status quo the company believed it could get away with. GM
leadership was unwilling to make necessary but painful long-term
changes; instead there was continual compromise of action that only
delayed disaster. This was reflected in every aspect of the enterprise,
from decisions on manufacturing, which never brought capacity into
line with market realities, to people, where almost no one was ever
let go for poor performance.
GM’s corporate culture had become unhealthy and self-destruc-
tive. Lack of customer awareness and the strong insular nature of its
culture sent GM down a path towards bankruptcy well before the onset
of the economic crisis. GM was so out of touch with the market they
could not capitalize on innovations and changing customer needs, even
though they had many of the technologies and ideas to do so. They
failed to stay competitive.
2 Creating a Culture of Profitability

I knew that culture was an important factor contributing to GM’s


failure and that there had to be an explanation and a solution to the
problem of poor organizational culture. The best business writings
on organizational culture – Argyis1, Schein2, and Kotter3 – assign the
success and failures of companies to their cultures but did not go far
enough to be useful and none did a great job of describing what I was
seeing. Because GM’s culture was so destructive, I wondered if there
were organizations with cultures that led them to be successful. There
must be a better way!
The path to creating this book began with Culture Matters4 by
Lawrence Harrison and Samuel Huntington, two of the leading experts
in economic development. These scholars addressed a fundamen-
tal question: Does culture matter in societal development? Harrison and
Huntington made a compelling case: culture matters a great deal. They
uncovered the specific traits that lead a society to progress or prevent
it from doing so. Their work provided a rigorous way to think about
culture that is based on evidence. They found that some cultures are
able to create and foster consistent strong development, but some
flounder despite huge amounts of international aid. Their explanation
was brilliant. Surmising that these same cultural traits that Harrison
and Huntington found to be important in a society would also apply
to private enterprise, I took their model and applied it as a filter to
analyze GM’s culture. The product was a paper I wrote in March 2009,
Retooling GM’s Culture (see Appendix).
Retooling resonated with nearly every GM manager and profes-
sional below the management committee that was making the cor-
porate decisions. It also resonated with many outsiders. The most
compelling e-mails were from GM people who noted that the paper
echoed their experience and wanted to know how they could help. The
desire by members of the organization to belong to a healthy culture
was so strong that it was almost heartbreaking. It showed the deeply
human side of understanding culture – it matters to the lives of people.
When Retooling circulated widely in government and industry, many

1 Argyris, Chris. (1993) Knowledge for Action: A Guide to Overcoming Barriers to


Organizational Change, Jossey-Bass.
2 Schein, Edgar. (2010) Organizational Culture and Leadership 4th Edition,
Jossey-Bass.
3 Kotter, John and James Hesket. (1992) Corporate Culture and Performance,
Free Press.
4 Harrison, Lawrence and Samuel Huntington. (2001) Culture Matters: How
Values Shape Human Progress, Basic Books.
1 Introduction – A Better Way 3

industry experts, executives, consultants, and journalists said that the


paper was the best description of the culture they had seen. Senior
management, starting with the CEO, was furious; they immediately
canceled my contract and said that I would never work at GM again
(nor have I). So clearly I was on to something.
One unexpected result of Retooling was that Lawrence Harrison
brought me into his professional family and invited me to join the
executive committee of the Cultural Change Institute at Tufts Uni-
versity. He inspired me to work more deeply on the role of culture in
business. This involved addressing the fundamental question that he
had asked concerning nations:
Is there a definition of “good” corporate culture – culture that
leads to lasting business success?
This book answers the question and the answer is “Yes.”
We have created a useful map where there was once only a vague
sketch with many regions marked terra incognito. The map’s value is
the power it gives business leaders to navigate their way and man-
age culture to the same degree they can manage other important and
complex drivers of profitability such as cost, customers, R&D, and so
on. Managing culture will still need insight, diligence, creativity, and
work, just as these other drivers do, but the map we provide is a big
improvement over today’s ad hoc treatment of culture. Like any map,
its worth is how it gets you to your destination, not the detail on every
space between here and there.5

1.1 What do we Mean by “Culture?”


Before laying out the details, we need to create two key build-
ing blocks: what we mean by “culture” and what makes a culture
“good.”
Culture is the values, beliefs, attitudes, and assumptions shared
within a company.
Culture includes all the shared mental baggage people carry with
them. Behind any string of complicated logic lies the assumptions
giving a thought shape. Culture is what defines those assumptions
and, therefore, includes the reasoning and logic people use when they
are making decisions. These beliefs and behaviors are brought to one
decision after another, leading to success or failure. Culture affects the
5 Giere, Ronald (2006) Scientific Perspectivism, University of Chicago Press.
4 Creating a Culture of Profitability

success of the company through the quality (or lack of quality) of the
decisions that management makes.
Business culture helps people decide quickly by making the basic
rules clear and aligning the company. People at all levels understand
their role and what they are supposed to do without having to be told.
The success of many companies, including Chevron, McKinsey, P&G,
Honda, WL Gore, and Pixar is attributed to their cultures. A recent
study of Toyota concluded that its success is due as much to its culture
as to the Toyota Production System.6
Despite all this, mentioning the “C” word makes eyes roll, as it
is seen as too “soft” to deal with operationally and does not matter
anyway, once the “real stuff ” has been taken care of. Business leaders
know that culture is important but are frustrated with the lack of tools
and specifics available to improve culture. Academic business theory is
either too general or too daunting to be useful. Defining a good culture
as adaptable and appropriate is hard to argue with but is not very help-
ful. A theory of culture needing an army of outsiders led by a genius
professor to manage is not going to be “scalable,” as we say today.
Much of the research is driven by ideology and “positive” values from
people with little understanding of business and only a vague notion
that profits are important. Authors assert values that sound good, but
do not have a convincing story on how culture adds to profits.

1.2 What is a “Good” Culture?


We define a “good” culture very simply:
A good culture is a culture that leads to a profitable, sustainable,
healthy business.
Our focus is on sustaining a healthy and profitable business, not
morals or aesthetics. Profitability is the outcome of success, that is, a
measurement or indicator of how healthy your business is. If an idea
does not contribute to the long-term health of a company, it should
be tossed aside. We are not saying greed is good; it is not, for reasons
we will discuss later. However, without profit, your business will be
neither sustainable nor healthy. Robert Heinlein once said “Blessed
are the rich in spirit, for they shall make dough.”7

6 Takeuchi, Hirotaka, Emi Osono, and Norihiko Shimizu (2008) “The Con-
tradictions that Drive Toyota’s Success” Harvard Business Review
7 Heinlein, Robert. (1961) Stranger in a Strange Land, Putnam.
1 Introduction – A Better Way 5

Now that we’ve defined “good” culture, is there such a thing,


and if so, what is it? The current consensus in literature is that the
only universal characteristics of a good culture are adaptability and fit.
This is not very useful. People need more depth to improve culture and
business leaders are frustrated with the literature. It is like reducing
marketing to “give customers what they want” or managing costs to
“keep costs as low as possible.”
An unsatisfactory answer does not always mean an incorrect an-
swer. Our cure for the common cold is rest and chicken soup, and that
is the extent of our understanding whether we like it or not. For culture,
however, there is a much richer answer that we will develop.
People who care about the development of countries have looked
at the role of culture for a long time, e.g. Weber’s The Protestant Ethic and
the Spirit of Capitalism, published in 1905. Over the last 20 years, there
has been new research on the subject, initiated and led by Lawrence
Harrison (mentioned earlier) and the Cultural Change Institute at Tufts.
The Institute focused on how culture contributes to the prosperity
and democracy of nations and published their findings in three major
works: Culture Matters (2001), The Central Liberal Truth (2006), and Jews,
Confucians, and Protestants: Cultural Capital, and the End of Multiculturalism
(2012), with three volumes of supporting studies.
One of their important findings is that policy interventions need
to consider culture, both in considering the causes of the problem and
its cure. Naïve policy prescriptions that are oblivious to cultural issues
are likely to fail. This also holds true for managing business problems.
Culture is often a key part of many business challenges and needs to
be part of the solution. Without this awareness, people will often work
on the wrong issues.
Harrison and his colleagues (led by Mariano Grondona) found
25 attributes that define whether a culture is good8, i.e. leads to eco-
nomic success and democracy (see Appendix for a full listing). These
attributes have been empirically validated9 and are compelling. These
are the values shared by the most successful societies on Earth and
by the highest achieving minorities within them. Harrison calls them
collectively a country’s cultural capital. This is a powerful idea that ap-
plies to companies as well.
8 Harrison, Lawrence. (2013) Jews, Confucians, and Protestants: Cultural Capital
and the End of Multiculturalism, Rowman and Littlefield.
9 They were independently tested in the World Values Survey. Ronald Ingle-
hart, “Testing the Progress Typology,” presented at the final Culture Matters
Research Project conference at the Fletcher School, Tufts University, March
27-8, 2004, p. 10.
6 Creating a Culture of Profitability

It is a short leap to assert that the same values that lead to


prosperity for nations also lead to prosperity for companies, since a
nation’s wealth depends heavily upon the success of its businesses.
These 25 attributes are the starting point for thinking about what
defines a good culture for companies, but there are three reasons they
must be modified:
♦♦ Some, such as child rearing, do not apply.
♦♦ A company is part of larger society and we know that the
company’s culture plays an important role in how well it
fits into the surrounding society. For example, German and
Japanese companies hold different cultural norms within
their respective national cultures.
♦♦ Companies possess a core purpose beyond making money
that defines the heart of their values. This purpose differs
from company to company, even for close competitors in
the same markets.
Leo Tolstoy famously said, “All happy families resemble one another;
each unhappy family is unhappy in its own way.” This quote sheds
insight on understanding business culture and differences between
companies. All good cultures look alike, as they share many of the same char-
acteristics. Even in different places and industries, healthy companies
all have a clear purpose, fit well within the larger society and markets,
and live by a set of values that drive business success.
However, culture can go bad and drive failure in many ways, so
there will be differences between the “unhappy” companies with a
poor culture: some will be buggy makers in a world of automobiles,
some have poor ethics, some are insular, some will be torn apart by
internal silos, and so on.

1.3 How this Book is Organized


The next chapter defines a “profitable culture,” presenting the
main ideas and concepts. The will give you a clear understanding of
the structure of a good culture.
The following chapters form the heart of the book: how to diag-
nose and manage culture. For each cultural value, we discuss:
1 Introduction – A Better Way 7

♦♦ Forces leading to decay, which we refer to as the forces


of entropy,
♦♦ Symptoms allowing diagnosis, and
♦♦ Remedies for restoring cultural health, both for upper
management and for middle management.
In discussing how culture decays, we contrast what makes a company
successful with what leads to decay. We liken cultural decay to entropy,
that is, natural forces that lead to decay.
We discuss detailed symptoms on the health of each part of cor-
porate culture. This permits a company to develop an early warning
system and to understand specific cultural problems.
When presenting remedies, we distinguish between actions top
management can take and those middle management can take. Both
are important, but the respective span of control and roles are differ-
ent, so separate tools are necessary. Both the top manager and middle
manager should recognize what aspects of culture are within their
span of control and have a conceptual model and set of tools to restore
cultural health to their organization.
Following the chapters on diagnosis and treatment there is a
chapter on managing the ways that culture preserves and protects
itself. This issue cuts across different cultural traits and merit its own
chapter.
We then discuss how a company should begin to implement
culture management, including specific steps and tools. We suggest
organizational roles and responsibilities for managing culture on an
ongoing basis. Each company will need its own solution, but the initial
road map can help it get started. We include a chapter on dealing with
a strong but unhealthy culture.
The next chapter is titled “Managing Alligators.” It focuses on
how to survive cultural issues when running a project. The purpose is
to give the tools for anticipating culture-related problems at the begin-
ning of a project. This allows the team to plan for and manage them.
The final chapters include an empirical test of our key idea: right
culture leads to profitability. While the results must be read with some
caution, they are encouraging.
We are now ready to discuss a culture of profitability.
2
A Profitable Culture
The first step to fill in the sparse map of culture is to split corpo-
rate culture into four distinct parts, each with its own role:
♦♦ Core purpose – the guiding objective or principle that sets
the organization’s direction – its raison d’être.
♦♦ Instrumental values – links between the external environ-
ment and the firm.
♦♦ Cultural infrastructure – traits necessary for sustainable suc-
cess for all companies, although their relative importance
will vary. These traits drive good decisions throughout
the enterprise.
♦♦ Self-preserving mechanisms – the ways in which culture be-
comes deeply embedded within the enterprise, ensuring
compliance and punishing those who would change it;
almost a living thing in its tenacity and will, not a set of
ephemeral values.
This is a fundamental redrawing of the map of culture, replacing “Here
be Dragons” with a map that supports navigation and management.
The following sections discuss these distinctive parts of culture
and describe how they can contribute to making a culture “good” or
healthy, ultimately leading to profitability.

2.1 Core Purpose


The first part of a company’s culture is its core purpose or reason
for being. This is the true heart of the enterprise – what people really
want to do and where they want to go. To be useful, the purpose must
be broadly understood and specific enough to guide action, otherwise

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