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(originally published by Booz & Company)


Culture Change: Calling on Philosophers and Engineers

Information Flows

Discovery Excellence Altruism Heroism
Well-designed informal and formal networks (face to face, e-mail, and telephone) keep everyone up to date about events, fashions, and trends relevant to the company and its innovations. These networks should be allowed to extend beyond the organization, so that employees are kept in touch with new ideas. One problem can be limiting the flow to avoid distraction. The most important information at these companies is the knowledge of quality standards, which may be captured in formal codes, such as a house style book at a newspaper, or passed on through apprenticeship and discussion, as at many professional services firms and at Toyota with its famous shusa (master teacher) approach to training engineers. Sophisticated information systems are used by large altruistic organizations to replicate the personal customer knowledge of the small businessperson. Tesco’s Clubcard, which it uses to segment its market, has been a key ingredient of its success. Information should be allowed to flow quickly up and down the hierarchy to enable the centralized power structure to operate effectively. Measurements should be used extensively to monitor performance at every level.


Discovery Excellence Altruism Heroism
The opportunity to create something new. The innovator whose ideas are always killed will quickly lose heart. The opportunity to learn new skills and knowledge and the ability to be recognized through publications and patents are also important. The opportunity to do great work and to be recognized for it; as Warren Buffett put it, “the thrill of outstanding performance.” The original designers of the Macintosh at Apple arranged to have their signatures inscribed on the mold for every computer housing. Customer gratitude. Seeing the benefits that people get from using their product or service and establishing long-term relationships with those who are served are the reward. Winning. The opportunity to be seen as a leader in the field, to beat the competition, to be number one.

3. Living by New Rules
If structure, decision rights, information, and motivators are integrated and aligned with a company’s purpose and strategy, the organization will function effectively. If these levers are out of synch or, worse, working at cross purposes, they will impede execution and thwart the company’s long-term competitive success.

Of course, without the commitment and follow-through of the senior leadership team, there is no hope of true and lasting culture change. Leaders are the only ones able to declare a “new day” and to make it stick. In establishing purpose and realigning the fundamental levers of the organization, senior managers need to “walk the talk,” and not just for a week or a month…but for three to five years. That’s the time frame in which significant culture change transpires.

Giving speeches and modeling behaviors in public is one thing, but leaders need to also take this message to their employees on a more personal basis. Town hall meetings, site visits, and performance reviews, for example, are all good face-to-face opportunities to communicate and spread a strong performance culture. If accountability was a problem before, call attention to specific instances in which it was exercised (and when it was not exercised). If customer focus is important, send the top team on key account calls. If the appraisal process does not single out those who best represent the purpose and culture of the enterprise, change it. Critically, management from the top down needs to live the new rules and tap into the hearts and minds of their employees by instilling in them a sense of shared purpose. Only then is culture change really possible. Only then can it unlock lasting competitive advantage.

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  1. Nikos Mourkogiannis, Purpose: The Starting Point of Great Companies (Palgrave Macmillan, 2006): The book on which this article is partly based explores the notion of purpose in business. Click here.
  2. Gary L. Neilson and Bruce A. Pasternack, Results: Keep What’s Good, Fix What’s Wrong, and Unlock Great Performance (Crown Business, 2005): In addition to the “building blocks” of this article, this book describes seven principal organization types and their characteristics. Click here.
  3. Gary L. Neilson, Bruce A. Pasternack, and Karen Van Nuys, “The Passive-Aggressive Organization,” Harvard Business Review, October 2005: This article examines one of the more dysfunctional examples of the seven organization types: the passive-aggressive organization. Click here.
  4. The Organizational DNA Web site: Booz Allen Hamilton has developed an online assessment tool, the OrgDNA Profiler®, that allows individuals to diagnose their organization’s execution culture. Click here.
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