A Process for Changing Organizational Culture

Abstract

Think of it. If you were going to start a business and wanted to make a lot of money, what markets will you most likely avoid! Airlines, discount retailing, consumer electronics, publishing, food distribution. The list of industries represented by these five companies looks like an impending disaster for new entrants--massive competition, horrendous losses in the industry, widespread bankruptcy, virtually no barriers to entry, little unique technology, many substitute products and services, and a non-leadership position in market share. Yet, these five firms out-performed everyone even with none of the special competitive advantages. What differentiates these extraordinarily successful firms from others? How have they been able to make it when others failed? How did Wal-Mart take on Sears and K-Mart, the two largest retailers in the world at the time, and almost drive them out of business? While Wal-Mart prospered, its largest rivals were forced to sell-off divisions, replace CEOs (more than once), downsize dramatically, close stores wholesale, and even file Chapter 11 bankruptcy. How did Southwest thrive when several of its strongest competitors went belly-up (e.g., Eastern, Pan-Am, TWA, Texas Air, People Express)? How did Circuit City, Tyson Foods, and Plenum Publishing succeed when their competitors went out of business so rapidly that it’s hard to keep up? The key ingredient in every case is something less tangible, less blatant, but more powerful than the market factors listed above. The major distinguishing feature in these companies, their most important competitive advantage, the factor that they all highlight as a key ingredient in their success, is their organizational culture. The sustained success of these firms has had less to do with market forces than company values; less to do with competitive positioning than personal beliefs; less to do with resource advantages than vision. In fact, it is difficult to name a single highly successful company, one that is a recognized leader in its industry, that does not have a distinctive, readily identifiable organizational culture