John Kotter and James Heskett’s classic book, Corporate Culture and Performance, is an organization development classic. The book provided solid evidence of the payoffs that come from adaptive cultures and the negative power of unadaptive cultures.
Adaptability is absolutely critical today. As change tsunamis relentlessly sweep the globe, adaptive organizations are getting stronger and unadaptive ones are being washed out to sea. Harvard Business School professor, James Heskett’s new book, The Culture Cycle: How to Shape the Unseen Force That Transforms Performance, follows up his and John Kotter’s earlier work with updated research, current examples, and pertinent observations. Southwest Airlines, Wal-Mart, IBM, ING, 3M, and Proctor and Gamble are some of the adaptive cultures providing insights to the enduring success growing from their highly effective cultures.
Steps in The Culture Cycle
The book’s main framework is a circular diagram following these steps:
- Mission, Shared Assumptions, and Values <–> Alignment with Strategies and Methods of Execution
- Setting Expectations
- Behaviors Consistent with Shared Assumptions and Values
- Expectations (e.g. leadership, recognition, job opportunity, personal development)
- Core Phenomena (Trust, Engagement, and Ownership)
- Policies, Practices, and Behaviors (e.g. self-direction, accountability, transparency, collaboration)
- Organization Learning (e.g. continuous improvement, adaptability, agility, and speed)
- Results (Four Rs, innovation, growth, and profitability)
Steps 2 – 4 are labeled “Causes (less visible)” and steps 6 – 8 “Effects (More Visible).” Step 1 is at the top of the cycle and both the beginning and the end — or beginning of the next turn of the cycle. Step 5 is at a halfway point and bridges causes to effects.
The “Four Rs” of Step 8 are “the results of an effective culture can be (but rarely are) documented and tracked:
- Referrals: A higher proportion of potential employees recommended by current or former employees.
- Retention: Lower recruiting, hiring, training, and lost productivity costs because of greater employee loyalty.
- Returns to labor: Greater productivity per dollar of compensation.
- Relationships: Better customer relationships, resulting in greater loyalty, lower customer acquisition costs, and more sales.”
The Culture Cycle‘s organization and bent leans towards the academic. Although it provides a framework, it’s not a how-to book. The Four Rs for measuring culture are the books’ strongest contribution. The steps of the Culture Cycle are very helpful and align extremely well with our decades of experience using similar approaches with dozens of Clients.
Heskett does a great job of showing how culture is critical to organizational success and providing powerful and highly illuminating examples. But his application of the Culture Cycle steps are vague, confusing and often veer into generalizations. Having written two books on leading high performance cultures (Firing on all Cylinders and Pathways to Performance) and produced detailed how-to workbooks, I am clearly biased.
The chapter on “Leading Culture Change” has some very useful nuggets — especially on measuring and monitoring. Heskett uses his Culture Cycle model to prescribe the role of leadership. It’s a good start and outline of many of the key issues. But this chapter needs lots more detailed how-to steps for executives and support professionals to follow.
Here are a few of his conclusions that are especially critical to “predicting the effectiveness of efforts to lead culture change:” (I’ve emphasized a few vital points)
- “Effective leadership often involves delegating responsibilities and authority. But one responsibility that can’t be delegated completely is reshaping and maintaining an effective culture … leaders personally act out the values and behaviors … they do it consistently.
- Necessary changes in behaviors have to be modeled from the top. They can, however, be reinforced through such things as performance evaluations placing as much emphasis on “managing by the values” as “making the numbers.”
- Broad involvement in shaping shared values and behaviors helps ensure the effective implementation of the change.
- Culture change that reflects or accommodates changes in strategy and methods of execution has the best chance of success.
- (Leaders) assign “believers” as change agents and replace “nonbelievers” early in the process.
- (Leaders) form a “contract” with employees that specify expectations of all parties.
- They preserve the culture through everyday behaviors, measurement, and timely corrective actions, beginning with managers exhibiting behaviors that run counter to the values.”
I very much enjoyed The Culture Cycle. The combination of field and secondary research, examples, and pithy quotations/comments makes this an engaging and very useful book. It’s a great addition to the field of organizational culture change/renewal.
Six Core Elements to Leading a Peak Performance Culture
My reciprocal post on Zenger/Folkman’s blog is now available. Click on Six Core Elements to Leading a Peak Performance Culture to read it. This post brings together some of the elements I covered in our free Leading a Peak Performance Culture webcast. Click the title to access it now.