April 14, 2022

150 How to turn Your Organizational Culture Into a Competitive Advantage with Harvard Business School Professor James Heskett | Partnering Leadership Global Thought Leader

150 How to turn Your Organizational Culture Into a Competitive Advantage with Harvard Business School Professor James Heskett | Partnering Leadership Global Thought Leader

In this episode of Partnering Leadership, Mahan Tavakoli speaks with Professor James Heskett. Professor Heskett is UPS Foundation Professor Emeritus at the Harvard Business School. James Heskett has authored/co-authored nine books, including one with fellow Harvard Business School Professor John Kotter on Corporate Culture and Performance. In this conversation, Mahan and James Heskett talk about Professor Heskett's latest book, Win from Within: Build Organizational Culture for Competitive Advantage, and actions leaders can take to overcome barriers and nurture the right culture within their teams and organizations. 


Some highlights:

- Professor Heskett on why so many leaders doubt their ability to influence their organization's culture

- How leaders can establish the right culture for working in a hybrid environment 

- The role of belonging, diversity, and inclusion in great organizational cultures 

- Professor James Heskett on how leaders can create more trusting relationships 

- Specific steps leaders can take to impact the culture of their team and organization


Connect with Professor James Heskett:

Professor James Heskett @ Harvard Business School

Professor James Heskett Books @ Amazon


Connect with Mahan Tavakoli:

MahanTavakoli.com

https://www.linkedin.com/in/mahan/

More information and resources available at the Partnering Leadership Podcast website: 

PartneringLeadership.com



Transcript

 Mahan Tavakoli: 
Welcome to partnering leadership. I'm really excited this week to be welcoming. Professor James Heskett, professor Heskett is UPS foundation, professor emeritus at Harvard business school, where he was previously faculty chair of the MBA programs. His many books include corporate culture and performance, which he wrote back in 1992 with professor John Kotter and the "Culture Cycle: how to shape the unseen force that transforms performance." Professor Heskett has been at the forefront of organizational culture, working with some of the best organizations with respect to culture across the globe. His most recent book is "Win from within: Build organizational culture for competitive advantage." I really enjoyed this conversation with professor Heskett having studied much of his work and some of his case studies back when I was going through business school at Georgetown, and then studied a lot of his thinking on organizational culture and its importance throughout the years.

Way before most people were talking about the importance of organizational culture and its impact on the future of the organization. So I really enjoyed this conversation. I'm sure you will too. I also enjoy hearing from you. Keep your comments coming, mahan@mahantavakoli.com, there's a microphone icon on partnering leadership.com, you can leave voice messages for me there.

Don't forget to follow the podcast. Tuesday conversations with magnificent change makers from the greater Washington DC DMV region, and then Thursday conversations with brilliant global thought leaders like professor James Heskett. And finally, when you get a chance to leave a rating and review.

Especially on apple podcast, you can do that at the very bottom of your feed. Spotify has also added ratings. It's toward the top of your feed. Those ratings and reviews, help more people find and benefit from these conversations. Now here's my conversation with professor James Heskett. 

[00:02:07] Mahan Tavakoli: 
Professor James, Heskett welcome to Partnering Leadership, I am thrilled to have you in this conversation with me because over the years, I've studied a lot of your work. And now your book, " Win from within: build organizational culture for competitive advantage", can't wait to learn some more about organizational culture from you. But before we get to that, we'd love to know whereabouts you grew up and how your upbringing impacted, who you've become and where you ended up. 

[00:02:37] James Heskett: I, grew up on a farm in Iowa. Obviously farming was not my career objective, so that shortly after graduating from college nearby, I spent a couple of years in the army where I had my first opportunity to observe leadership in action. During the time that I was serving in the army overseas, a buddy convinced me that rather than going into retailing, which was my objective, that I should apply to a graduate business school. And in his estimation there was only one that was worth applying to, and that was Stanford. So he said, I have an extra application here, fill it out and send it in. So I filled out the application in pencil.

Didn't hear anything from Stanford for months. And finally, just shortly before the beginning of the term, was notified that I was admitted. So my wife and I piled into a car, went to California and had our first experience, with the academic side of leadership, a mentor of mine, Professor Gayton Jermaine introduced me to the world of leadership in the fields of logistics and transportation and sent me on my way to teach at Ohio State University and later the Harvard business school.

With some time off to manage a company that I founded called logistic systems. Well, along the way, I encountered some remarkable leaders and have continued to, try to seek out, outstanding, leaders that, believe in the importance of culture in their organizations. And of course, a couple of them that I was fortunate enough to spend some time with, were Herb Kelleher at Southwest airlines, with whom I had a long relationship and, John Bogle at Vanguard Systems with whom I enjoyed in acquaintanceship, but an opportunity to learn how they felt or how they feel about the way that culture, enabled their organizations to achieve what they have.

[00:05:02] Mahan Tavakoli: Professor Heskett you mentioned a couple of great leaders, but those two individuals, John Bogel and Herb Kelleher couldn't have been more different. In getting to know them and their leadership, what were the commonalities? Because their personalities were drastically and diametrically opposed to each other. 

[00:05:21] James Heskett: Yes, indeed. You're right. I think what they shared in common. First of all, a very clear vision of how culture might fit into an organization's strategy at Southwest Airlines, it was the idea of the underdog, and, fighting against the large, competitors entrenched in that industry. At Vanguard, it was the idea of the consumer of investment products, valuing and benefiting from a low cost high quality, service.

So that, in a sense, both of those gentlemen, had as an important element of their organization strategy, low costs, Southwest of course, being the low cost, airline at the time and John Bogle being, the head or founder of an organization that was totally devoted to lower costs for investors, with employees being recognized, and organized, to produce lower costs and with an organization whose performance was measured as much on cost, as on investment performance because as many people know Bogle was a proponent of index funds, which are basically not managed but produce an average return at very low costs, which results in a total return, which is actually higher than most of the other investment opportunities in the market.

But both had a focus on this idea and the importance of people in meeting that objective, they heard it used to say that. They asked themselves what kind of an organization they wanted and decided that what they wanted was one in which they could have fun, develop people, produce a loyal working team.

And the same was true at Vanguard through totally different methods. The working environment at Vanguard it's one that induces people to stay, high levels of loyalty and with resultant impact on lower costs.

[00:07:46] Mahan Tavakoli: Professor Heskett, in addition to dealing with these two leaders and their organizations. What got you so interested in organizational culture, as you mentioned, initially, you had started in logistics then, worked on service organizations, but you along with John Kotter wrote a book and I interviewed John Kotter a few months back on his most recent book on change.

But you wrote a book back in 1992 on corporate culture and performance, you've co-written seven books. Culture has been something that you have been researching and advocating for a very long time. What got you so interested in the impact of organizational culture. 

[00:08:26] James Heskett: At the time, going back in the late eighties and I was actually teaching courses and researching in the area of service management at the Harvard business school and came across some very remarkable service organizations. And it occurred to me that the thing that made those organizations remarkable was the culture within them.

The idea that their leaders understood the importance of culture to the bottom line and practiced systematically the kinds of things that would lead to cooperative, loyal group of employees. One case that I wrote that influenced me probably more than any other was the Shouldice hospital case that has been taught hundreds of thousands of students about a hospital that did one thing concentrating on inguinal hernias located in Toronto Canada, where there was no star system.

People were paid well, they all ate together, the doctors, the nurses, the supports staff, they maintained A healthy sense of humor in dealing with people who were having their hernias fixed of all things and in an organization where the objective was to turn the responsibility for rehabilitation over to the patient as quickly as possible.

So the tradition was that the surgeon would operate on the patient and then invite the patient to put his arm around the surgeons shoulder and walk with him to the door to begin or signal the idea that the patient was primarily responsible for his or her own rehabilitation. And in the process, the spirit of can do and employee ownership and patient ownership sort of it came across so strongly to me that it occurred to me that we ought to be understanding whether or not other organizations are doing this, and if not, why.

And that really encouraged me then to join with John and the study that we did to try to measure the impact of culture on performance.

[00:10:56] Mahan Tavakoli: Professor Heskett, I'm proud to say that when I went through Georgetown in professor Robert Bies' organizational behavior class, we did that case and I still remember it like it was yesterday. outstanding case on organizational culture and all the different aspects that go into it. Now, one of the frustrations or questions I have is that you were at the leading edge talking about the impact of organizational culture and the importance of it. Why is it that still to this day? So many leaders find themselves having a hard time understanding whether they can, that's a part of it and how to impact the organization's culture. 

[00:11:39] James Heskett: I think by and large leaders get the idea now that culture can have a significant influence on performance. .A study done at Duke University several years ago found that 92% of respondents senior executives felt that culture was important to performance. The problem was that only 16% felt that their culture was what it should be which leaves a huge gap.

And I think are alluding to in organizations where the leadership understands the importance of culture, but isn't doing much about it. I think there are several reasons that leaders are reluctant perhaps to spend a lot of time on it. First of all, the belief that it takes so long that it probably isn't going to produce results during their tenure in that CEO's spot.

Also just the idea that it requires so many complicated steps, or at least they've been convinced that it is a complicated process that they have been reluctant to to do it. Third, firefighting takes over I like to think of changing a culture and the way people think about it in leadership positions a little bit like climate change we all know that it's important to do, but we'll put it aside because we've got so many things to deal with today that we can't invest in a process that's going to take us months or as some believe even years

The purpose of the book "Win from within" is to try to encourage leaders to act with some degree of urgency on the matter of culture change in ways that enable them to do it within their tenure, within the attention span of the organization within a reasonable period of time.

And as John Kotter has written about the importance of urgency which is always present in the leadership of an organization, John Doerr the venture capitalists, the famous venture capitalists has said that time is the enemy of transformation. And most many leaders don't feel that they have the time to do it, or they actually initiate a program and the organization allows other things to take over.

[00:14:28] Mahan Tavakoli: Your book serves as a great framework for leaders to reflect on how they can do it well, professor Heskett, there are a couple of other things that you've mentioned in the book that I believe contribute to this. One of them is our language as leaders has evolved, but the practices haven't evolved as much.

So a lot of leaders talk the talk with respect to organizational culture, but aren't necessarily doing the things or walking the walk with respect to it. And then you also mentioned that as it is the case with alcoholics anonymous or any issue we want to address climate change organizational culture.

 The first step is admitting that there is a problem. And I find with the leadership award industrial complex every leader is constantly getting awards, being told how great they are, how great their organizational culture is. There's a tendency not to reflect on the first step is I need to admit, and we need to admit that organizational culture is something that we need to improve. 

[00:15:31] James Heskett: Yes, I think you're right. Mike Beir, my colleague has written on the importance of creating dissatisfaction with the status quo as one of the first steps in the management of change. And I think, you might agree that many leaders may not be all that good at creating dissatisfaction with the status quo.

An organization that is performing well can become complacent. The extreme of that behavior of course, is arrogance. You try as a leader to build pride within the organization and too much pride leads to arrogance, but the whole idea of a self-satisfaction, if you will works against change, people become so satisfied with their performance that they don't see any need for change.

In a sense, this was the case at Microsoft. Microsoft was not going down the tubes in 2014. It was still profiting from its emphasis on software and doing reasonably well. The task was to convince people that we can be doing much better and we all prefer to be doing a lot better, not only for our customers, but for ourselves.

That was the task, confronting the new CEO, at that time. And he did a very good job of it. which enabled Microsoft to be regarded as one of the great turnarounds of in recent corporate history.

[00:17:15] Mahan Tavakoli: and I do mention the example of Nadella. I love the way you also described the experience there in that a lot of times, one of the things I find frustrating is people talk about the importance of culture over strategy. So culture eats strategy for breakfast, lunch, dinner, all of those things. Part of what you say is an effective culture anchors strategic change.

 So Nadella at Microsoft, he did have a significant impact on transforming the culture. At the same time, the strategy of leaving behind some of the legacy focus on the PC on mobile was a big part of the success of the organization. The two are not mutually exclusive. What you say is that effective culture anchors strategic change. 

[00:18:09] James Heskett: It doesn't serve us well to try to decide what's more important culture or strategy. The situation that Nadella was involved in at Microsoft involved change in both and is quite natural to work on both at the same time. You don't have to have the perfect culture in order to change an organization's strategy.

But today, in an era in which organizations have to change strategy frequently, as we saw during the recent pandemic impact, you have to have a culture that supports adaptability. That takes us all the way back to the study that John Kotter and I did in 92 in which we pointed out that or found, based on our data, that strong cultures can be very successful and they can be very unsuccessful.

It all depends on the nature of the values and the way in which they support adaptability. Because today, we have to have a culture that can support several strategies and several strategic changes because we change our strategy much more frequently than we change our culture. And therefore if we can get a foundation laid through an effective culture that will support several strategies, it can provide us with a basic competitive advantage over a reasonably long period of time.

[00:19:47] Mahan Tavakoli: That's one of the things I found myself reflecting a lot on professor Heskett in reading your book, that strong cultures can be positive or negative that adaptability is critical to the success. In the book, I love this at the beginning you mentioned strategy is hard, culture is soft.

The impact of a strategy on growth and profit can be measured. And that of culture can not, if you get the core values shared by everyone, right? The rest will take care of itself. A strong culture helps assure good performance to change. An organization's culture requires a long time.

All these assumptions have been passed around in management circles over the years, and all of them are essentially wrong. 

[00:20:36] James Heskett: I believe that very strongly. And obviously John Kotter shares my belief because he wrote the foreword to the book. But, based upon what we have found over the years and in his case, his research in the management of change, these shibboleths, if you will, tend to become embedded in people's minds.

And they discourage so much important action. They provide excuses for inaction. they do all kinds of things that, prevent us from taking full advantage of the importance of culture in bottom line performance. I think we're seeing that right now. There, there is a significant concern about employee turnover, primarily because, millions of people are reconsidering their careers and whether they should maintain their relationship with their current organization or whether they should move, take new jobs, start new careers, what have you. 

And in the book, I basically said there are many things we can't predict, but there's one thing we can predict from this pandemic, and that is that research will tell us that those organizations that created an effective, supportive, place to work during the pandemic are going to be those organizations that were able to retain their people and come out of the pandemic in better shape, competitively speaking, I'm certain, this is going to be the case.

And the organizations that we're reading about are those organizations that probably didn't do a very effective job during the pandemic, when people needed support, they needed the feeling that they were part of an organization and they didn't get it.

[00:22:29] Mahan Tavakoli: Professor Haskett, you also addressed this in the book. One of the challenges that I see with the leaders that I interact with is that they're finding it very hard maintaining a cohesive culture when operating in remote, considering what the impact is going to be being hybrid or shifting back and forth to remote.

What are your thoughts and perspectives with respect to how leaders can nurture the right kind of culture while being either hybrid or remote, which are two very different modes of operating. 

[00:23:06] James Heskett: I learned a lot from a case study that's described in the book an organization called critical mass, that's headquartered in Calgary, Alberta, headed by a woman named Diane Wilkins. They're in the business of creating good work environments. And so they spent a lot of time thinking about this and actually provided me with some good ideas in that regard.

Several of which are probably going to create some debate if you will. For example, I'm becoming convinced that the quality of middle-management becomes more and more important in a remote or a partially remote organization. Somebody has got to be there to hold the hands of those people who are, alone.

If they're new to the organization, they really are alone. And unlikely, I think, to ever become a long-term employee. Those people are going to turn over because there is no way to bring them into the organization. Middle managers can serve not just as coaches, but as advocates because people working remotely need an advocate back at the home base, so that they don't feel that they're being lost and they are feeling that they are becoming lost in large measure.

A culture that supports people who are working remotely becomes absolutely critical. That means probably budgeting an extra amount for in-person meetings, gathering people either on a national or a regional basis, maybe doing like Semex in Monterrey, Mexico, where their managers all work under something called the Semex way and periodically get together on an international basis in order to cement those relationships so that they know who they're talking to over the phone and can recognize faces on zoom or whatever else they may be using, because without the face to face contact, almost everything else is lost. Not only do you not get the collaboration that you seek, but you don't even get the loyalty that you need, to maintain an effective organization. It's really important that we, try to bring people together.

And when we can't do that, create a cadre of people in the middle of the organization who are trained to work in a remote environment and trained to support those people out in the field, in ways that perhaps they wouldn't support them at the headquarters. These are ways that we're not used to, operating in and the training of this core of people becomes very important.

And there are some, as you well know who believe that middle-management is a dirty word. we've eliminated it in too many organizations, as a way of downsizing or re sizing. And now some of those organizations I think, are paying the price in a world of remote work that is not going to go away.

[00:26:44] Mahan Tavakoli: That's one of the things I've loved about your work professor Heskett and including this book in that I find in many aspects of life, including in leadership literature, writing books, there is a lemming effect where everyone all of a sudden runs in one direction or another, the death of middle managers and not needing any middle managers in organizations is one of those.

We're a lot of people have been predicting and what is the purpose of the middle managers? But you make a great point that for organizations, most especially operating in a remote and a hybrid environment, that is required you also mentioned in the book and quoting the Gallup study, that their relationship with that immediate supervisor and manager is a critical factor to employee engagement.

For a lot of reasons, some of what we have been running to like lemmings is counterproductive even in the in-person environment, let alone in a hybrid or virtual environment. 

[00:27:47] James Heskett: I agree. the real losers in this whole process our new hires, we have to do a better job of making those people feel like they have a home, that they're part of an organization, that means quite probably, organizing around teams, that are composed of members that aren't located all across the globe, but in areas where they can occasionally get together and, build the relationships that are important to a team.

And, otherwise, those new hires in this environment are just going to continue to turn over. We're going to have, an increased impact on turnover. And employee turnover, as the book suggests, is one of the biggest factors in bottom line performance for all kinds of reasons. it not only costs money in and of itself, it costs in terms of productivity, it costs in terms of collaboration, it costs us in so many ways that I'm concerned that what is now occurring, and I'm sure we're going to see an upswing in employee retention numbers. Maybe a downswing would be better a way of putting it. Those employee retention numbers are going to, take a hit in organizations that aren't doing as well as others. Those that are able to at least maintain their employee retention will be the winners. In the book, I don't hold out any great hope that people are gonna make a killing on culture during the pandemic. My hope is that, an organization can maintain its culture, its employee loyalty, the productivity numbers.

I don't expect them to increase all that much, but, there will be small victories, during this time.

[00:29:54] Mahan Tavakoli: As long as the leaders, as you say, professor Heskett, keep in mind that nurturing that culture is really important . Over the past couple of years, there has been even more firefighting, some of it by necessity, some of it just because of the pace of change. In many instances some of the leaders that I see have focused less effort on the culture and in their mind justifying it by saying we are trying to at this point firefight and keep things going, 

[00:30:23] James Heskett: It's a wonderful excuse for not doing anything about culture. 

 It can put it off. We have to have zoom meetings right, what can we do? 

We're victims of circumstance at this point, I label that as kind of the gray swan problem. It's the one that provides us with excuses to put off what someday is going to become a very critical, problem in our organization.

And until it does, you know, we can get by. I think the CEO of a fifth, third bank, put it quite well recently when he said, and I'll paraphrase that, we're never going to be a great organization working remotely. Okay. We'll manage all right, don't worry about us, but we're not going to be great, working remotely.

And I think that he realizes what many CEOs don't, these days. And I suspect that when, as soon as possible an organization like fifth, third is going to do something about that.

[00:31:29] Mahan Tavakoli: It provides an opportunity , for some of that development that you also mentioned is important for culture. The is important for the employees themselves. You have a beautiful visual in your book of two options, option A and option B with respect to organizational culture.

And the fact that. A single strategy can be effectively executed without having the right culture. And I find sometimes some, entrepreneurs or others that have had a single success are used as an example of being able to succeed without great organizational culture. But your option B shows that when the culture is the right culture and platform, it allows for various strategies to be effectively executed. 

[00:32:24] James Heskett: Yeah. I think at current performance only tells us so much about the effectiveness of an organization's culture, because as we all know a great product, a terrific distribution channel, will save us for awhile even if we have a problems with culture. 

[00:32:43] Mahan Tavakoli: You mention the financial impact of culture, where they're unemployed for all us retention productivity. there is a lot of financial data that supports the importance of great culture. One of the things that you mentioned is with respect to diversity. You say that despite the evidence, many organizations are using a leaky bucket in their approach to diversity. What is that leaky bucket and how can leaders view diversity and more importantly, inclusion differently in their organizational culture? 

[00:33:21] James Heskett: First of all, one of the very important mechanisms for practicing diversity and inclusion is obviously the team. What you would like to have for the most effective impact on performance is a team that's comprised of diverse individuals with different backgrounds, able to make different kinds of contributions.

Having them there is the first step, getting the contribution that diversity can provide is the more important step. And that's where we come to the idea of inclusion. Managers are not trained well for inclusion. Our training for inclusion is woefully weak in too many organizations.

And therefore, we don't get the benefit of diversity, particularly in creative organizations where ideas are so important. And the notion of collaboration and cooperation is also important. The idea that every voice needs to be heard, that we don't, shout down the person with the extreme opinion.

The practice of throwing ideas out on the table was that we don't reject anybody's idea. First of all, we get them all up there. And I think we've forgotten that to some extent, because it's still the case that too many people are not heard, their ideas are down played, and don't make it to the level of the organization where they should be considered importantly, as real contributions to potential products or new processes, or what have you. Again, it's a matter of management, education and training.

Diversity can be forced on them, inclusion can't. It's up to them, to include the members of their group that may have these outstanding ideas.

[00:35:25] Mahan Tavakoli: And that, training that learning is Absolutely critical for all leaders and at all levels of the organization, you do make a point that this changes not just something that the most senior people in the organization and culture, is not what they need to focus in on. It's something individuals need to be able to lead at all levels of the organization to make the right culture reality. 

 You also mentioned, professor Heskett, the importance of trust you, quote Brian Chesky, co-founder and CEO of Airbnb, talking about things, moving at the speed of trust in the organization. How can leaders have a greater sense of trust with respect to their organizations and what role does trust play in organizational culture? 

[00:36:20] James Heskett: As I pointed out in the book at the elements of trust that I believe are important are really pretty straightforward and can be summed up in the idea that we will do what we say we will do. We will meet expectations. this is something that came from my work in service management, where we found that if you meet or exceed a customer's expectations, there's a huge upswing in loyalty.

So the idea of meeting or exceeding, just doing what you say you will do is really important. I think it's Ursula Burns who when she was CEO of Xerox, chastise the organization for having meeting after meeting in which people promise that they would do something by a certain date, leave the meeting and nothing would happen.

That's how you destroy trust. Got to the point where apparently in her organizations, very few people trusted each other. If you don't have trust, well let's talk about it in the positive sense. Trust enables you to rely on somebody else doing what they say they're going to do by a certain date. Trust in a set of values, allows your organization to work remotely, in a very successful way, confident that everyone is following the same set of ideas, procedures, values, what have you. That's how organizations work successfully in a remote fashion. I mentioned in the forward to the book that, one of the things that, got me interested in subject really, was a case study that a colleague of mine did about Jim Burke when he was CEO of Johnson and Johnson.

 And one of the company's subsidiaries had its a product Tylenol, poisoned. Burke was out of the country. The company has a credo which lists several ideas to which everyone subscribes. The crowd in Chicago where this poisoning took place that actually led to seven deaths, decided that they had to act fast in order to get on top of this thing.

 Burke was in Japan, out of the country. They acted first and then informed him about what they had done and what they had done was to pull all of that product of off the shelves of every store in the United States at a cost of a hundred million dollars to Johnson and Johnson. So it was no small matter.

It was based on trust. trust has driven Johnson and Johnson to pretty successful heights over the years. And it can do that for any organization where people can rely on their colleagues to do what everybody has agreed upon. I'm not going to say, do the right thing, but it's, it's what everybody has agreed upon so that, you know, what's going on in another part of the organization, in another part of the world, in another part of the company. That's how organizations build agility without trust, it's impossible to be agile.

[00:39:47] Mahan Tavakoli: That trust is critical, professor Haskett. One of the challenges that I find is in many instances, when working with organizations having conversations with some of their team members specifically when it comes to addressing organizational culture, a certain level of trust has been broken and that people feel like, been there, done that. We've had these conversations before been there done that nothing changed. 

[00:40:15] James Heskett: Think about the destruction of trust, in organizations like, that I've cited in the book, like a Wells Fargo where, Senior managers claim that they did not know what was going on inside the organization. And the people at the operating level had actually violated a company values, when given a set of objectives that were almost impossible to meet, without violating company values. Or Volkswagen for example, where, obviously engineers were, not told not to cheat in devising a way of meeting environmental goals.

While also accommodating performance in their products. Or at Boeing, where there clearly was a lack of trust between engineering and top management, that led to product problems that Boeing really was not known to have in the past.

[00:41:22] Mahan Tavakoli: Professor Heskett, for leaders to reflect on organizational culture. You have great frameworks, you have 16 steps that they can go through as people are listening to this conversation and are thinking to themselves, okay, I get it, culture is really important, understood, that it serves as a platform for strategy. What would be a first step to take for leaders to impact their organization culture? 

[00:41:54] James Heskett: I think, first of all, it's important to reflect on what is a shared understanding among managers? do we all subscribe to the same set of values agreed upon behaviors or what portion of them do we not agree on, and what are we doing to address those differences of opinion. Going back to Johnson and Johnson, Jim Burke, after this incident that I described, said to his organization, okay, we're going to look again at the credo, the company's credo. And I want you to tell me how we should change it, which one of these things do you believe in? What don't you believe in? What do you think is a problem? You've got to start at least by assessing the degree to which people subscribe to a set of values that probably are already in existence.

 I mean, culture forms either by itself or with a little encouragement from management, And which of these things about how we do things around here do you agree with or not that we'll get the process started because if we all agree on certain set of things, then we at least have the basis for moving forward.

If we don't, then we had better develop some convergence in what we believe in. But just because we all agree on the values and the way we do things around here doesn't mean that those are going to serve us well in the future. It doesn't mean necessarily that we're going to have a culture that will support more than one strategy over time.

We've got to ask ourselves look, how do we write the story about this company's performance five years from now and what kind of values and processes do we need to have to get us there and how do those relate to where we are now? I cite from two example at Microsoft in the book.

What do we need to change? And do we all agree on whether we need to change that? Well, that set of discussions prior to the early stages of those 16 steps that are outlined in the book, will provide us with a launching pad for a process as again, that's described there that, that will allow us to change our culture in a reasonable period of time. At Microsoft, six to 12 months at Uber around nine months, it can be done. As those organizations have shown, there are also devices then that are described and suggested that will enable us to maintain an effective culture. For example, every time we make a strategic decision, is there somebody asking, what impact does it have on people's trust? Is there somebody asking whether or not that decision conforms with the values that we've all agreed on? is there somebody asking whether or not the way we're going to go about doing this is compatible with how this organization works.

At Southwest Airlines, there always seemed to be somebody saying, wait a minute, how does this fit with our culture? Are we going to destroy our trust with our employees? we better watch out about that, whether you have a culture committee, which is not necessary, or whether you have people who just think about those things and bring them up from time to time.

It is unimportant, but it's important to have somebody. Furthermore, I've suggested that as a CEO, Or as a manager at any level of the organization, take five minutes at the beginning of every day and ask yourself, what's the most important decision I'm going to make today? How am I going to make it? what is it going to be? And how compatible is that with the organization's values and behaviors, in terms of how I'm going to do it or what I'm going to say? Those frequent reminders will help in preserving an effective culture. In addition to the 16 steps that I've described in changing, the culture in our organization.

[00:46:30] Mahan Tavakoli: Those are great perspectives, professor Heskett. And one of the things I say is that there's a huge difference between knowing what we're supposed to do and say, and consistently doing it. What I urge people to do is to reflect on what you said, read your book, not just for understanding of the importance of culture and the steps to go through with respect to culture.

 However, it needs to be part of the ongoing conversation and ongoing operation. No not because culture eats strategy for breakfast . However, because that culture is an absolute critical part of enabling the organization. Being a platform for different strategies into the future.

Professor Heskett, you have so much wisdom that you have shared over the years, including my years studying your cases back at business school. In addition to your own book and your own work, are there any leadership practices or resources you typically find yourself recommending. 

[00:47:34] James Heskett: I go all the way back to, Peters and Waterman's book on excellence, going back to the eighties, they were a big influence on me and I still think about things that they wrote about years ago that are applicable to today's management environment.

 I read number of things that have been written by Marc Beniof at salesforce.com and he's done a couple of books that have been quite influential obviously, John Kotter's work on leading change, has been really important to me, some of the things that John Bogle wrote have still inspire me, and I suspect we'll continue to do so. Those are some of the influences that have been important to me. I would just add one footnote to what you said Mahan just recently, just now. And that is the importance for a leader of telling those stories, the stories that reflect the values that reflect the way we do things around here.

 And what I've tried to do is sprinkle a number of those stories through the book because leaders that rely heavily on organizational culture for the success of their companies, they tell stories and they tell them over and over, until people become sick of them, the stories get better and better the more times they tell them. But just keep telling those stories because the stories are what enabled people to understand what we're all about and they help unify us, with a sense of purpose in achieving our objectives.

[00:49:26] Mahan Tavakoli: That's beautifully said professor Haskett. I truly believe that the power of storytelling that you also mentioned in the book is critical because it's the stories that communicate values, the stories that communicate what the culture is, and the stories that become memorable. It is not the posters on a wall, or words that we write down. The stories become memorable and whether it is for external customers or it is for people within the organization, To know what is important and what is not. You also quote Ben Horowitz, who has written a lot himself, a successful entrepreneur in Silicon valley. He wrote hard thing about hard things.

 And, he says that if you don't systemically work on your culture and consistently work on your culture, then two thirds of it will end up being accidental, and then the rest of it. We'll be a mistake. So the challenge to leaders, listening to the conversation right now is that there needs to be intentionality behind the conversation around culture.

 And it is not something that happens once a year in off-sites when in person or zoom meetings, when not it is something that needs to consistently happen, in ongoing storytelling interactions, conversations with respect to strategy and decision-making 

[00:50:55] James Heskett: I liked the way Ben put that. That's why I quoted him in the book.

[00:51:01] Mahan Tavakoli: Professor Hasket, I really appreciate, all you have done to contribute to my understanding of organizational culture over the years, including this outstanding book " Win from within build organizational culture for competitive advantage", which in it, you do a brilliant job talking about the importance of it.

 Not just the importance of it from a soft perspective, because culture is not just soft, the heart perspective of the financial and other impacts on the organization, but also specifically frameworks for leaders to consistently think about and apply in their organizations to help elevate their organizations. Truly appreciate you professor Heskett joining me in this conversation for Partnering Leadership. 

[00:51:50] James Heskett: Thanks Mahan for having me.