The Culture Cycle: How to Shape the Unseen Force that Transforms Performance

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The contribution of culture to organizational performance is substantial and quantifiable. In The Culture Cycle, renowned thought leader James Heskett demonstrates how an effective culture can account for 20-30% of the differential in performance compared with "culturally unremarkable" competitors.

Drawing on decades of field research and dozens of case studies, Heskett introduces a powerful conceptual framework for managing culture, and shows it at work in a real-world setting....

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The Culture Cycle: How to Shape the Unseen Force that Transforms Performance

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The contribution of culture to organizational performance is substantial and quantifiable. In The Culture Cycle, renowned thought leader James Heskett demonstrates how an effective culture can account for 20-30% of the differential in performance compared with "culturally unremarkable" competitors.

Drawing on decades of field research and dozens of case studies, Heskett introduces a powerful conceptual framework for managing culture, and shows it at work in a real-world setting. Heskett's "culture cycle" identifies cause-and-effect relationships that are crucial to shaping effective cultures, and demonstrates how to calculate culture's economic value through "Four Rs": referrals, retention, returns to labor, and relationships. This book:

  • Explains how culture evolves, can be shaped and sustained, and serve as the organization's "internal brand."
  • Shows how culture can promote innovation and survival in tough times.
  • Guides leaders in linking culture to strategy and managing forces that challenge it.
  • Shows how to credibly quantify culture's impact on performance, productivity, and profits.
  • Clarifies culture's unique role in mission-driven organizations.

A follow-up to the classic Corporate Culture and Performance (authored by Heskett and John Kotter), this is the next indispensable book on organizational culture.

"Heskett (emer., Harvard Business School) provides an exhaustive examination of corporate policies, practices, and behaviors in organizations." Summing Up: Recommended.

Reprinted with permission from CHOICE, copyright by the American Library Association.

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Product Details

  • ISBN-13: 9780132779784
  • Publisher: FT Press
  • Publication date: 8/28/2011
  • Edition description: New Edition
  • Edition number: 1
  • Pages: 384
  • Sales rank: 584,329
  • Product dimensions: 6.60 (w) x 9.10 (h) x 1.30 (d)

Meet the Author

James Heskett is Baker Foundation Professor, Emeritus at Harvard University’s Business School. A leader in advancing management practice, he remains active at Harvard Business School; serves as a board member at Limited Brands; and consults with companies worldwide. Heskett has won the Council of Logistics Management’s John Drury Sheahan Award; Sales and Marketing Executives International’s Marketing Educator of the Year Award; and the American Marketing Association’s Career Contributions to the Service Discipline Award. He is author and coauthor of several books, including Corporate Culture and Performance (with John P. Kotter); The Value Profit Chain (with W. Earl Sasser, Jr. and Leonard A Schlesinger); and The Ownership Quotient (with Sasser and Joe Wheeler).

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Table of Contents

Acknowledgments x

About the Author xii

Introduction 1

Two Visits, One Story 3

Questions to Be Addressed 12

How This Book Is Organized 13

Chapter 1 A Crisis in Organization Culture? 15

What Culture Is and Isn’t 17

Stealth Weapon or Humanizing Effort? 17

The Development of Interest in Organization Culture 19

The Nature of an Organization’s Culture 22

Culture and the Workplace 35

Culture and the Long-Term Erosion of Job Satisfaction 38

Chapter 2 Culture as “Know How” 41

ING Direct: Shaping a Culture 41

Culture and Purpose (“Know Why”) 45

Culture and Strategy (“Know What, When, Where”) 46

Culture and Execution (“Know Who”) 46

How Successful Managers View the Importance of Culture 48

Culture in the Context of Purpose, Strategy, and Execution 49

Chapter 3 Culture: A Multi-edged Sword 55

Nature and Results of the 1992 Study 59

Strong Cultures Affect Performance 60

Strength of Culture Is Not Correlated with Good Performance 61

Adaptability Keys Long-Term Success 61

The Question of Fit 62

The Role of Leadership 65

Chapter 4 Culture in an Organization’s Life Cycle 69

How Cultures Are Formed 69

The Process of Culture Formation 72

How Cultures Are Articulated and Institutionalized 72

How Cultures Are Diluted 75

Enemies of an Effective Culture 77

How Cultures Are Renewed 88

Reinforcing Effective Cultures 90

Chapter 5 Economics of Culture: The “Four Rs” 95

Economic Advantages of an Effective Culture: The “Four Rs” 97

Culture Impact Model 114

Several Caveats 114

Chapter 6 The Culture Cycle: Measuring Effectiveness 119

USAA: Effectiveness Through Trust 121

Nucor Steel: A Study in Learning, Accountability, Self-Direction, and Innovation 124

Toyota and the Importance of Alignment and Agility 128

Measuring a Culture’s Strength 132

Measuring a Culture’s Health: The Culture Cycle 134

Measuring a Culture’s Fit 146

Caveats 147

Chapter 7 The Four R Model: A Field Test 151

The Setting: RTL, Inc. 151

The Research and Findings 152

The Blind Results 156

Blind Result Comparisons 158

Caveats Regarding the Blind Estimates 159

Comparisons of Culture Cycle Elements 160

Management’s Interpretation of What Happened 164

Conclusions 165

Chapter 8 Culture and Innovation 169

The Culture Cycle and 3M Innovation 172

Levels of Innovation 174

Adaptability and Innovation 179

Value “Clusters” That Foster Innovation 179

Innovation “Value Clusters” at Apple 187

Chapter 9 Culture and Adversity 197

Adversity and Response at Intuit 197

Adversity and Response at BP 200

9/11 and the Southwest Airlines Response 203

Adversity and Response at Goldman Sachs 204

So What? 209

The Fit Between Culture, Leadership Style, and the Nature of Adversity 210

How Cultures Help and Hurt in Times of Adversity 212

Culture as a “Filter” Between Adversity and Performance 214

Chapter 10 Subcultures and Global Strategies 219

Enter the Culturalists 221

Global Management Challenges from Cultural Differences 223

What Do These Vignettes Suggest? 231

The Selection of Leaders 239

Managing the Relationship Between Headquarters and Subsidiaries 241

Organizing, Coordinating, and Controlling Effort 243

Implications for Subcultures in General 245

Chapter 11 Mission-Driven Organizations: Special Challenges 251

Supergrowth 251

Loss of Focus: “Mission Creep” 253

Making a Large Organization Seem Small 255

Deploying Human Resources: The Challenge of Volunteer Labor 255

Measuring and Rewarding Effectiveness Among an Organization’s Subcultures 257

Coordinating Efforts with Other Mission-Driven Organizations 259

Managing Board and Leadership Conflicts Concerning Basic Assumptions 260

Controlling Zealous Behavior 263

Chapter 12 Dealing with Forces That Challenge Organization Cultures Today 267

Information and Communications Technology 268

Increasing Emphasis on Transparency 270

New Generations of Employees 272

Team-Based Work 276

Employment and Deployment Strategies 277

The Rise of Free Agency 281

The Psychological Shrinking of the World 281

Chapter 13 Leading Culture Change 285

How Do You Know Change Is Needed? 288

Monitoring Links in the Culture Cycle: RTL, Inc. Revisited 289

Changing a Culture 297

Sustaining Culture Change 305

Conclusions 309

The Role of the Leader in Reshaping Culture 310

Chapter 14 Answers and Questions 317

Characteristics of Effective Cultures 318

Economic Outcomes: Profit and Satisfied Stakeholders 320

Behavioral Outcomes: Great Places to Work 320

Some Final Thoughts 322

Appendix A Sample Questions for Measuring the Strength and Health of a Culture 325

Appendix B Four R Assumptions and Computations 329

Appendix C Complete Results of Employee Surveys, 2009 and 2010, for Three RTL, Inc. Offices 333

Endnotes 339

Index 361

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