It was a hot day in Atlanta, Georgia, on June 22, 1979. Two
aspiring entrepreneurs, Arthur Blank and Bernie Marcus, were
standing outside of the grand opening of the first of two stores
designed to make the lives of the "do-it-yourselfer" easier. On
that day, The Home Depot was born. Home Depot's story, like many
good stories, is one of heroic success and tragic missteps. During
its early years, it was Home Depot's culture that catapulted it
into stardom. Mirroring the values of Arthur and Bernie, Home Depot
was driven by three spoken and unspoken principles: service,
entrepreneurial spirit and community. Arthur and Bernie preached
these values with vigor and regularity. In fact, it was said that
Arthur and Bernie were so adamant about service, initially they
didn't want any signs at the ends of the aisles indicating what was
on that aisle. They wanted customers to seek out an associate,
driving home the importance of service.
Over time, problems soon arose. As Home Depot grew they began to
realize they had significant inefficiencies in the system,
inefficiencies and costs that had to be addressed immediately.
Enter Bob Nardelli. The former GE rising star was asked to take
over the helm of Home Depot and to bring about this necessary
change. It was the hope of many that Bob would bring that one piece
that Home Depot lacked - efficiency. Indeed, Bob brought that
missing piece to Home Depot - in spades. Unfortunately, the values
of service, entrepreneurial spirit and community were not important
to Bob. Rather, he preached efficiency, cost reduction, and chain
of command. The net effect was a culture change that drove away
customers, employees and shareholders, despite the organization's
dramatically improved cost structure. But most importantly Home
Depot had lost its magic.
Does this story sound familiar to you? Cultures are delicate and
funny things. Managing them intentionally and strategically is even
trickier. The good news is that while the recipe is complex, there
is a recipe for managing cultures strategically. Consider the
1. It starts with leadership - From the research that we've
conducted on cultures, one of the most surprising findings is how
significant the role that a leader's story and his or her personal
values has on the culture AND how quickly a culture molds to fit
that leader - for better and for worse. In fact, 50% of any culture
will always be a reflection of that leader's personal values. A
frightening, but true statement. So, if you are the leader of your
organization ask yourself the following questions:
- What are my values? Where do they come from in my story?
- What are the implications of my values on the organization? For
betterand for worse?
- How can I leverage these intentionally and positively to meet
the needs of the organization?
- Where are the gaps?
2. What do our stakeholders value? - What do our employees
value? Why are they here in the first place? And what do our
customers value today? How has that changed? Making sure the
culture is aligned with the values of its stakeholders -
particularly customers - is critical. In Home Depot's case, the
employees' and customers' values did not change dramatically during
this transition; however, the organization's values did to
3. Give your values "teeth" - Put in place systems,
structures and symbols to reflect the values you choose. At
Chick-fil-A's corporate headquarters, the lights of the building
are turned off at 5:00 PM to reflect the value of "family"
symbolizing the importance that employees go home to their own
families. What systems, structures and symbols do you have in place
and what are they signaling to employees? What could you be doing
differently or better?
4. Talk about, reinforce and reward what you value - At Ritz
Carlton hotels across the world, every morning the staff get
together and discuss the importance of one of their core values.
Employees, from housekeeping to the valets, are recognized when
they successfully live out those values on a daily basis. It is one
of the reasons why Ritz Carlton's culture is its driving
competitive advantage in a very challenging industry.
5. Protect the culture at all costs - One can predict the
strength and intentionality of a culture with near perfect accuracy
based on the presence of these words in a given conversation with
the leader as he or she describes his or her role: "protector of
the culture." In great cultures, from Google to Southwest Airlines,
there is a clear sense of responsibility to protect the culture. So
what can you do? Consider assigning your own "values champions" to
make sure you have the right values being promoted by the right
With any change to an organization, comes a subtle change to its
culture. Whether that change is from growth and added headcount or
from cost reduction and downsizing, managing change and ensuring
you continue to have the culture you want requires a vigilance that
most overlook. Home Depot missed this subtlety as they strove to
create a leaner organization. On the cusp of that change, they
forgot to ask a central question: "What got us here and how can we
ensure that we don't lose our 'special sauce' as we move forward?"
Had they asked that question, perhaps they would have approached
their need for efficiency differently.
So, as you look at to the challenges you and your organization
face, don't forget to include your organization's special sauce as
you mix new cultural ingredients to create the right culture for
your organization today.
Brandon Smith is the founder of "The Workplace Therapist"- a
resource dedicated to eliminating dysfunction at work, improving
workplace health and restoring that sense of optimism and hope in
the workplace that has been lost. In addition to working closely
with individuals and organizations as a coach, therapist,
consultant and speaker, Brandon also currently serves as faculty at
Emory University's Goizueta Business School where he teaches on and
researches healthy workplace dynamics and communication.
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