This is a summary of a book titled “Win from Within: Build organizational culture for Competitive Advantage” written by James Heskett who is a professor emeritus of Business Logistics at the Harvard Business School. The book was published by Columbia Business School Publishing in 2022. It provides an applicable overview with concrete examples.

The book details 16 steps to change your culture on the premise that evidence does not support most of the common wisdom about organizational culture. An effective culture boosts the bottom line and fosters flexibility, innovation, and learning. Responsibility rests with the leaders to engage and retain employees and an organization’s policies must reflect its values. High-engagement workplaces share several crucial characteristics and experimentation improves your likelihood of success. There might be some challenges presented by remote work, but they are not insurmountable. The risk associated with good cultures going bad is that change becomes difficult.

A strong culture does not imply marketplace success and is not necessarily a winning asset. It could even be toxic. But leaders can shift the culture in a matter of months. The steps listed here are useful to everyone involved in managing organizations.

Culture and strategy are complementary. For example, Satya Nadella simultaneously healed Microsoft’s dysfunctional culture and led a major strategic shift from Windows to cloud computing. On the contrary, resisting new ideas assuming what worked in the past will continue to work, is one of the most common pitfalls.

An effective culture boosts the bottom line, and fosters flexibility, innovation, and learning. The competitive advantage of an effective culture can outlive that of any strategy. Organizations that put their employees first gained long-term market share and later rewarded their shareholders handsomely. Analysts can predict a company’s relative profitability by studying just the culture. There can even be a virtuous feedback loop between cultural changes and impact on profit. For example, Ritz Carlton vets the hirings thoroughly and empowers almost anyone to spend up to 2000$ to redress a guest’s problem. It emphasizes attitude and empathy.

Leaders must engage and retain employees and culture can be a tiebreaker in engaging talent. Organizations with effective culture can be tiebreakers but they could also be pressure cookers. Discontent stems from a lack of training and a lack of being acknowledged.

Companies known for highly engaged employees train their recruiters in employee engagement as a competitive advantage. They seek people with complementary viewpoints and empower them with the necessary skills.  The US Marine Corps, the Mayo Clinic and Harvard Business School all have sustained high engagement beyond their founding generation and leverage a team-based structure to maintain the culture. Similarly, Southwest Airlines views the late departure as a team failure, not an individual one. This results in a top on-time record.

Experimentation is key to success.Booking.com authorizes any staffer to run a test without advance approval. Testing is taught and test evidence overrides executive judgment. Failed tests provide lessons. The author asserts that measurement without action is a great way to scuttle the success of a lot of effort that precedes it.

Sometimes, a toxic culture has devastating results. After two Boeing 737 MAX planes crashed, a whistleblower said management had rejected an engineer’s request for a safety measure. Employees feared retaliation for bringing problems to management’s attention. Similarly, the O-Ring failure destroyed the Challenger space shuttle, and the case of Volkswagen’s emissions-testing imbroglio is well-known.

Remote work presents cultural challenges and the best that the leaders of increasingly remote workforces can hope for may be hiring advantages and modest increases in productivity.

James Heskett lists the following steps to accomplish culture change:

1.       Leaders acknowledge the need for culture change – Leaders must take note of the metrics and messages emerging from the “shadow culture.”

2.       Use discontent with the status quo as a spur for change – Drastic steps might be needed to crystallize and alleviate the concerns people see with change.

3.       Share the message of change – Communications must be ongoing, clear, and simple. Listen to the reactions. Repeat.

4.       Designate a change team – A team can be tasked with cultural change codifying values, gathering input, meeting deadlines, and maintaining the impetus for change.

5.       Install the best leaders – Bring the right people to the fore; tell the wrong people good-bye. Your goal is alignment around change.

6.       Generate and maintain urgency – Culture change should take six to 12 months. As John Doerr said, “Time is the enemy of transformation.” Build in a sense of drive.

7.       Draft a culture charter – by articulating what must change and how. For example, Microsoft spurred change to empower people “to achieve more.” Compare the current state to the desired future.

8.       Promulgate a change statement that involves the whole organization – Communication is crucial. Gather comments; include or reject them; document the outcome.

9.       Set up a “monitor team” – This team tracks relevant measurements, checks progress, and ensures that communication continues.

10.   Align everything – Changes must align with corporate values. Reward what matters.

11.   Put changes into motion – Leaders must walk the talk. McKinsey found that change is more than five times likelier when leaders act the way they want their employees to act.

12.   Teach people at every level how to implement change – Training must be imparted.

13.   Measure new behaviors – Align your metrics with your new expectations and handle troubles.

14.   Acknowledge progress – Milestones are just as much reason to celebrate as the goal.

15.   Give big changes time to unfold – Long range habits take time to reach the customer.

16.   Keep reminding yourself what culture change requires – This is an ongoing evolution. Frequent check-ins with everyone on the team and recalibrations help.