Classic Culture Change

Organizational culture determines organizational results, and organizational leaders shape organizational culture. If your organization is not achieving the results it desires, then your organization’s culture needs to change. Why? Because culture is working around the clock, regardless of whether you recognize it or like it. The essential question is, “Does your organization’s culture facilitate or hinder achievement of your organization’s desired results?” If your answer is “yes” to both (that’s typical), then you need to reinforce what facilitates and eliminate what hinders.

Lou Gerstner understood this when he orchestrated the turnaround at IBM. Twenty years ago the company was on the verge of extinction with its three core divisions acting as separate fiefdoms. Gerstner and his leadership team began shifting the way people in the organization were thinking and acting by connecting individual performance with organizational performance, tying employee rewards to the performance of the company as a whole rather than business units, and making employees real partners in the turnaround. Stock options were issued liberally (for the first time in the company’s history) across the organization to underscore and bolster the shift. Collaboration, a new sense of unity, focus on performance, and accountability for results soared. During Gerstner’s decade at the helm of IBM, the company experienced an 800% increase in its stock price, grew dramatically, laid a new foundation for the future, and returned to the ranks of the most admired corporations. Gerstner’s now famous quote reminds us of what he learned in the process: “Until I came to IBM, I probably would have told you that culture was just one among several important elements in any organization’s makeup and success — along with vision, strategy, marketing, financials, and the like. I came to see, in my time at IBM, that culture isn’t just one aspect of the game, it is the game. In the end, an organization is nothing more than the collective capacity of its people to create value.”

To learn more about how make “culture change” an ongoing competitive advantage in your organization, join our Accountability Community at www.partnersinleadership.com, where you can review the accounts of real culture change and its impact on results.

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