Chapter 9 Culture Innovation and Change 05 06 2014 Intro 1 Managers must Big 3 things Develop culture o Intentionally develop culture Encourage innovation o Always think about what s next o If your not moving forward you re moving backward o World is changing managers must lead organization through Manage change change 2 Tony Hsieh CEO Zappos Known for international approach to culture Entire business model is around core values that show culture Video o 10 core values foundation of culture o Ideas of how we run our business o Humble was a favorite value Zappos is taking over Vegas o Trying to drive Zappos culture into community Tony encourages employees to be involved and focuses the company around customer service o Very distinct culture and do things like acknowledge a random person for a day just to make them feel better and inspire others to work 1 3 Organizational culture innovation change are all parts of management Culture Culture System of shared beliefs values guiding behavior internal The way we do things around here Set of signals of what is considered appropriate vs inappropriate external Thinking behavior Structure Symbols 1 Culture is Personal a Cultural fit high impact on people leaving their job 1 reason b 5 famous musical celebrities slide All share culture 2 Culture is organizational a Masters Augusta Georgia IBM CEO male culture at club i IBM CEO Ginni Rometty wasn t allowed to join 1 Augusta national didn t allow any women as members ii Condi Rice and Darla Moore were allowed in and started process for women first women members of Augusta National Golf Club b What are aspects of Penn State Culture Observed vs Core i Observed campus dress international sports fitness leaders action classes technology dating career stuff speakers orgs THON ii Core Academics grades code conduct integrity WE ARE Penn State quality edu accreditation rules alma mater 2 3 Culture is Corporate things a Corporate culture is the direct behavior of a company The way we do i Shape attitudes Understand what your doing in this corporation ii Reinforce Beliefs Reinforce org beliefs believing in iii Direct behavior Appropriate iv Set expectations quality work b Disney Video about traditions with Mickey i Example of setting expectations c Microsoft Stacks or Forces ranking i Forced ranking system d KPMG study Mergers and acquisitions i Analysis of 700 deals over two years ii 83 failed to produce any benefit iii 50 destroyed shareholder value iv only 17 added value 1 key thing here they didn t merge the cultures of two different companies therefore they clashed and couldn t get over the differences 4 Culture is Global a Wall street culture John Reed i Different than other companies compared wall street to drug cartels ii Culture about making money b Worldmap org examples Global aircraft departures big in America and Europe and rail passengers big in Asia 3 c Societal cultures and sub cultures general examples i Functional norms like marketing and academic levels type and level ii More general like geographic club ethnic political fitness style religious urban rural any many more components 5 Culture above and below the waterline observed and core culture iceberg titanic ex a Edgar Schein s levels of culture Corporate culture levels i 1 Visible dress office symbols slogans ii 2 Invisible expressed values of the company what we say about ourselves ex HP way iii 3 Assumptions deep beliefs ex PSU we are a family b Observed and Core Culture i Observational culture where we begin to understand a company 1 Language dress building design perks provided iii Stories heroes symbols rites rituals all around core culture iv Core culture values or beliefs about right ways to behave cannot 2 not Code of conduct ii Things you can physically see see this type of culture v 1 Heroes 1 people in the company that you look up to or aspire to be in the future 2 Cultural benefits a Shared knowledge of hero stories b Establish or represent core values 4 Burns Zerox vi 2 Rites Rituals 3 Sam Walton Wal Mart Ken Frazier Merck Walt Disney Disney Co a Disney does a great job instilling this in others using the Disney Institute which reaches out to other companies and works with them to build a better overall company 4 Meg Whitman HP Indra Nooyi Pepsico Ursula 1 specific to each individual company 2 Cultural Benefits a Creates connections communication people org b Builds morale engagement c Shared hands on experiences enhances retention i does not serve in place of other benefits 3 DreamWorks video a Pixar culture at office leads to creativity b Have carnival days races and other activities to get workers more engaged with coworkers vii 3 Symbols 1 things you associate to something ex Logos 2 Cultural Benefits a Common understanding of culture b Easy to recognize you and others 3 Kellogg s Tony the tiger PSU lion a Thurl Raven Scroft voice of tiger b Nittany Lion associates with PSU 5 viii 4 Stories 1 get companies motivated to do more 2 Cultural Benefits a Easily remembered passed on b Instills deeper cultural understanding 3 Harland Sanders KFC Dave Thomas Wendy s a Dave s daughter Wendy is girl in logo and travels around telling stories of her father 4 Wegman s Best Place to Work video a Example of stories and culture b Story of Mr Wegman s treat your employees well and right and do the right thing they will treat our customers the same way c They constantly talk to their employees about being on fortune magazines 3rd best place to work at in the country connected i By telling the employees they get more 5 Fortune Magazine Best Places to Work a Where performance culture intersect Innovation 1 Innovation definitions a taking a new idea and putting it into practice b the process of translating an idea or invention into a good or service that creates value or for which customers will pay c want to encourage innovation 6 2 Nick D Aloisio Video Innovator 2013 sold app to yahoo a 17 year old kid who created news summary app called Summly b reinvented model for text content to shrink articles sold to Yahoo 3 3 Three Forms of Organizational Innovation Process Product Business model a 1 Process Innovation i focusing on lean principles reduction of waste 1 reduction in cost 2 3 increased turn around cycle time increase in output 4 better customer satisfaction ii six sigma process improvement iii Gulf Stream example 5 days 4 days to move plane iv Bank of America example b 2 Product Innovation i ii taking an already existing
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