When organizations get into big trouble, fixing the culture is usually
the prescription. That’s what most everyone said GM needed to do after
its 2014 recall crisis. Cultural reform has likewise been proposed as
the solution to the corrosive bureaucracy at the Veterans’
Administration, unethical behavior in banks, and the excessive use of
force by police. But interviews with successful change makers, conducted
by Harvard Business School’s Jay W. Lorsch and Emily McTague, suggest
that culture isn’t something you “fix.” Rather, cultural change is what
you get when you put new processes or structures in place to tackle
tough business challenges. Organizations are complex systems with many
ripple effects—and reworking fundamental practices will inevitably lead
to new values and behaviors. In this article, the authors explain how
this played out during four major transformations: the remake of Ecolab
into a diversified corporation three times its original size; the
postbankruptcy merger of Delta and Northwest; the turnaround of Ford;
and Novartis’s shift to a diversified health-care portfolio. Each firm’s
CEO took a different approach for a different end. Ecolab’s Doug Baker
pushed decisions down to the front lines to strengthen customer
relationships. Delta’s Richard Anderson got airline workers on board by
focusing on meeting their needs. Ford’s Alan Mulally broke down barriers
between units to improve collaboration and efficiency. Novartis’s
Daniel Vasella decentralized to unleash creative energy. But in every
case, when the executives used tools such as decision rights,
performance measurement, and reward systems to address their particular
business challenges, organizational culture evolved as a result,
reinforcing the new direction. [ABSTRACT FROM AUTHOR]