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Who Does Culture Change Rest On?
Promoting a vibrant corporate culture starts with front-line employees, as they have the greatest impact on customer satisfaction.
Most executives know that company performance extends beyond sales volume and stock price. As the challenges of global business have become more difficult, the practical interest in leading has grown to a new level: developing a strong corporate culture.
Research has shown that a vibrant corporate culture can connect the mindset of an organization’s people to the challenges of the business and help a company achieve sustainable competitive advantage. Organizations that do this outperform their competitors in terms of customer satisfaction, growth and profitability.
The culture of any organization is revealed in the routines, habits and rituals that have developed over time. But the important part of corporate culture lies beneath the surface — it’s contained in the underlying beliefs and assumptions in the organization, including those that often go unquestioned. This links big picture strategy with the mindset of the people on the front line.
The power of these rituals, habits and routines has been highlighted in various IMD Business School case studies (Editor’s Note: The authors are professors at IMD and also authored these studies).
One is Domino’s Pizza. Employees knew that change was on its way when Domino’s was acquired by Bain Capital in 1999, after being led by its founder for almost 40 years. What they did not bargain for was that new CEO Dave Brandon and his team would decide that the key to customer focus was the quality of the workforce.
On his first day as CEO, according to the IMD case study, Brandon made it clear that he was unwilling to accept the habits of the past.
He said: “If you don’t remember anything else about me today, just remember these three words: Change is good. Change is not a criticism of the past. It just means the future is going to be different. If that sounds exciting to you, you’re going to love me. If any of you are thinking ‘I’d rather do things the way we’ve always done them,’ I’ve got to tell you — you’re going to hate me.”
In this vein, Domino’s quickly decided that the quality of the people delivering the pizzas was as important as the quality of the pizza they were delivering. Early on the company recruited Patti Wilmot to head up human resources; it then created a developmental pipeline for every job category in the company based on these new cultural values.
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