Corporate Culture and Performance

by John P. Kotter

Going far beyond previous empirical work, John Kotter and James Heskett provide the first comprehensive critical analysis of how the "culture" of a corporation powerfully influences its economic performance, for better or for worse. Through painstaking research at such firms as Hewlett-Packard, Xerox, ICI, Nissan, and First Chicago, as well as a quantitative study of the relationship between culture and performance in more than 200 companies, the authors describe how shared values and unwritten rules can profoundly enhance economic success or, conversely, lead to failure to adapt to changing markets and environments.With penetrating insight, Kotter and Heskett trace the roots of both healthy and unhealthy cultures, demonstrating how easily the latter emerge, especially in firms which have experienced much past success. Challenging the widely held belief that "strong" corporate cultures create excellent business performance, Kotter and Heskett show that while many shared values and institutionalized practices can promote good performances in some instances, those cultures can also be characterized by arrogance, inward focus, and bureaucracy -- features that undermine an organization's ability to adapt to change. They also show that even "contextually or strategically appropriate" cultures -- ones that fit a firm's strategy and business context -- will not promote excellent performance over long periods of time unless they facilitate the adoption of strategies and practices that continuously respond to changing markets and new competitive environments.Fundamental to the process of reversing unhealthy cultures and making them more adaptive, the authors assert, is effective leadership. At the heart of this groundbreaking book, Kotter and Heskett describe how executives in ten corporations established new visions, aligned and motivated their managers to provide leadership to serve their customers, employees, and stockholders, and thus created more externally focused and responsive cultures.

Genres: Business, Leadership, Nonfiction

277 pages, Kindle Edition

First published April 7, 1992

About the author

John P. Kotter, world-renowned expert on leadership, is the author of many books, including Leading Change, Our Iceberg is Melting, The Heart of Change, and his latest book, That's Not How We Do It Here!. He is the Konosuke Matsushita Professor of Leadership, Emeritus at the Harvard Business School, and a graduate of MIT and Harvard. He is co-founder of Kotter International, a change management and strategy execution firm that helps organizations engage employees in a movement to drive change and reach sustainable results. He and his wife Nancy live in Boston, Massachusetts.

http://www.kotterinternational.com/ab...

Reviews

[Nick · Rating 3 out of 5]

Mostly relevant to changing culture at large companies, less relevant at startups.

Good performance from a strong culture that produces business strategies matched to the environment; strong cultures with mismatches hurt performance.
Based on data from successful cultures, one value needs to be on adaptivity. Another needs to be on caring about customers, employees, and stockholders.
Culture change needs to come from top down or it doesn't work; even then, it usually doesn't work. To change culture, one individual needs both insider resources, outsider perspective, and strong leadership skills.

[Elissa · Rating 4 out of 5]

Very interesting. While this book was mainly studying corporation in the 80s and prior still pretty applicable. Definitely a book you take your time to read to get the most out of. Hope at some point I. The future the authors revisit their research and create an update.

[Andrei Gavrila · Rating 3 out of 5]

The book is good, with interesting and insightful information. But you could get most of it by reading the introduction and summary chapters. The rest are heavy mixing information with statistics and research methodology.

[Derek Barraza · Rating 5 out of 5]

Really enjoyed the book Great insights and very relevant information for those responsible for leading organizational change. Very authoritative on the change management topic!

[Carmen · Rating 4 out of 5]

Für große Firmenbesitzer sicher sehr spannend, für Kleinbetriebe eher weniger.

[Yamato · Rating 3 out of 5]

The title was intriguing.

First three chapters tries to correlate through studies and data how companies with strong cultures correlate to business performance.
It is a mild correlation, can not say that it is strong. Culture must also have a good fit with the key business strategies and industry. For example an automotive OEM may not want to have a risk taking culture, especially in the manufacturing group.
This book is mainly talking top level leadership and culture and does not look deeply into sub unit culture, so it is at a high level.

Many great turnaround leadership examples show that the leader had outside experience or perspective, not completely internally grown. Mentions emotional detachment to make clear decisions and outsiders perspective. I can appreciate that having stepped out of my sub unit company for two years. The key is to think how to emotionally detach (be objective) and have an outsiders perspective on my own (benchmarking, reading, studying, etc)

Time required for cultural change is 4-10 years is cited for corporations. I should be able to turn around my current sub unit of 900 associates in 3 years. That will be my challenge.

The source of bad culture is complacency and a dominant position... Good adaptive culture takes existing, maps out against future business environments, creates a “crises” and rallies a team towards improvements."

Leaders use every opportunity to repeat the communication and vision.

[Nines · Rating 3 out of 5]

yea... again.. for my thesis.. *sigh*

[Garima · Rating 1 out of 5]

This could have been summarized in as an article.