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strategy and business
 / Summer 2013 / Issue 71(originally published by Booz & Company)


Culture and the Chief Executive

A better starting point is a realistic recognition of the culture’s current status. No company’s collective practices and beliefs are all good or all bad. They have evolved over time for understandable reasons—often to deal with the challenges or malfunctions of the past. Moreover, they are firmly entrenched in mind-sets and habits. Therefore, it is essential to be rigorously selective and disciplined in dealing with cultural issues. There are several things you can do from your highly visible position at the top of the hierarchy to spark and foster the cultural realignments you want to see:

  • Demonstrate positive urgency by focusing on your company’s aspirations—its unfulfilled potential—rather than on any impending crisis.
  • Pick a critical few behaviors that exemplify the best of your company and culture, and that you want everyone to adopt. Set an example by visibly adopting a couple of these behaviors yourself.
  • Balance your appeals to the company to include both rational and emotional cues.
  • Make the change sustainable by maintaining vigilance on the few critical elements that you have established as important.

In all this activity, avoid delegating your culture-oriented actions. Do as much as you can yourself.

The Power of Positive Urgency

Time and again, we hear executives cite the importance of having a “burning platform”—a stress-producing crisis, whether externally driven or self-induced—to incite a high-performance culture. We once observed a CEO incur several hundred million dollars of unnecessary debt for the sole purpose of creating a sense of urgency for his culture change effort. For many years, we too subscribed to the conventional wisdom that burning platforms were the only way to obtain cultural impact. But no longer.

Certainly we understand the logic that underlies this point of view: Companies full of complacent people will rouse themselves only in response to crisis. But experience and common sense argue differently. Consider what people on real burning platforms do. They escape. They barely have time to act, much less change their mind-sets and habits with a view toward long-term success. In the business equivalent, which usually involves a rapid drain of cash and profitability, your options will be similarly limited—in this case, to layoffs, plant closures, responses to the press and investors, and other forms of damage control. Like BP’s recovery efforts after the Deepwater Horizon spill, Toyota’s after the Fukushima disaster, or any plant shutdown made in response to a sudden loss of business, these traumatic activities are typically seen as a one-time event, not as a way of building for the future.

There is a much better way to overcome complacency. As a CEO or senior executive, the greatest thing you can do is to marshal an authentic sense of urgency, but not one built solely on the logical reasons that change is necessary. Rather, build an emotional sense of urgency, focusing on the values that the company cares about collectively: its way of serving customers, its desire for growth and success, its positive impact on social and community issues, and the attraction and welcome that people felt when they first arrived.

Every sustainable company culture is based, in part, on this intrinsic attraction to the work—including the way it challenges people. At some point, your employees chose to be part of the enterprise. For the most part, they liked (or loved) their profession, they felt they could excel, and they wanted to gain the personal benefits of accomplishment. As CEO, you need to capitalize on those feelings, give them voice, and encourage people to spread them virally throughout the company. This may mean discarding some businesses that don’t fit your strategy, your capabilities, or your culture. But it will also mean helping people expand (or recapture) the pride they have felt, all along, in their collective strength.

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