Building a High Performance Business Culture
Daniel Denison
International Institute for Management Development
Lausanne, Switzerland
Denison Consulting, LLC
Ann Arbor, Michigan, USA
“A milestone in the culture studies arena.”
-Edgar H. Schein
Denison & Hooijberg’s newest book
illuminates the cultural dynamics firms need
to manage in order to remain competitive,
including:
Supporting the front line
Creating strategic alignment
Creating one culture out of many
Exporting culture change
Building a global business in an
emerging market
• Building a global business from an
emerging market
•
•
•
•
•
Published June 2012
What Is It All About?
Supporting the Front Line
Domino’s Pizza
Creating Strategic Alignment
DeutscheTech & Swiss Re
Creating One Culture Out of Many
“Polar Bank”
Exporting Culture Change Across National Boundaries
GT Automotive
Building a Global Business in an Emerging Market
GE Healthcare China
Building a Global Business from an Emerging Market
Vale
Mindset is the Foundation
Norms,
Behaviors
and artifacts.
Visible, tangible.
Personal Values
and Attitudes.
Less visible, but
can be talked about.
Cultural Values
and Assumptions.
Usually not visible at all, often
held subconsciously, rarely (if ever)
questioned in everyday life.
Image by R.A. Clevenger
Culture Reflects the Lessons
Learned Over Time
Visible Symbols
Lessons
Culture
Underlying Principles
http://www.youtube.com/watch?v=6_WAmt3cMdk
Survival
Understanding Habits & Routines
Rituals, Habits, & Routines
We
must make automatic and
habitual ... as many useful
actions as we can.
The more of the details of
our daily life we can hand
over to the effortless
custody of automation, the
more our higher powers of
mind will be set free for
their proper work.
William James
Hold Your Horses!
Morrison’s essay opens with a story of a young time &
motion expert trying to find a way to speed up artillery
crews during WWI, just after the fall of France. He
watched one of the five- man gun crews practicing in
the field with their guns mounted on trailers, towed
behind their trucks. Puzzled by certain aspects of their
procedures, he took some slow-motion pictures of the
soldiers performing the loading, aiming, and firing
routines.
When he ran these pictures over once or twice, he
noticed something that appeared odd to him. A moment
before the firing, two members of the gun crew ceased
all activity and came to attention for a three-second
interval extending throughout the discharge of the gun.
Since this seemed like quite a waste of time, and the
young time & motion expert really couldn’t make any
sense of it, he asked an old artillery colonel to look at
the films to see if he could explain this strange behavior.
The colonel, too, was puzzled. He asked to see the
pictures again. "Ah," he said when the performance was
over, "I have it. They are holding the horses."
Elting Morrison, Gunfire at Sea
Changing Culture
By Changing Rituals, Habits & Routines
Good
Bad
Preserve
&
Strengthen
Invent
&
Perfect
Unlearn
&
Leave Behind
Rethink
&
Try Again
Old
New
Building a High Performance
Business Culture
What Counts…
Mission
Adaptability
Direction..Purpose..Blueprint
Pattern..Trends..Market
Defining a meaningful
long-term direction
for the organization
Translating the
demands of the
business environment
into action
“Do we know where
we are going?”
“Are we listening
to the marketplace?”
Consistency
Involvement
Systems…Structures…
Processes
Commitment..Ownership
Responsibility
Building human capability,
ownership, and responsibility
Defining the values
and systems that are the
basis of a strong culture
“Are our people aligned
and engaged?“
“Does our system
create leverage?”
http://www.youtube.com/watch?v=6_WAmt3cMdk
One Hundred Year Old Manufacturing Company
68
29
12
11
9
18
12
55
8
66
63
82
One Hundred Year Old Manufacturing Company
•
•
•
•
•
•
68
First in industry,
but declining
Trying to hold on to the past
1st time in 20 years
failed to meet targets
Targeted by competitors
President operationally focused
“We’re a team going down together
29
12
11
9
18
12
55
8
66
63
82
Creating Strategic Alignment
Global Purchasing: Executive Team
Global Purchasing: Middle Managers
Global Purchasing: Buyers
Post-Merger Integration
Parent Company
Acquisition
Transformation:
GE Healthcare China
http://www.youtube.com/watch?v=yB47wx-b6sY
GE Health Care China:
Entering an Emerging Market

2002: GE acquired Datex-Ohmeda and entered the anesthesia business.
DO was focused on the medium and high-end of the market.

2006: GE acquired Zymed (CSW), a family-run business in Wuxi
Zymed had “adopted” their technology from Datex-Ohmeda.
“The organizational structure of Zymed was simple. It had dreams, but no
long-term strategy. It had a culture of thrift. It also had good execution, which
was based on a transparent rewards system. In its ten-year history employees
benefited a lot financially.”

2007: GE hired Finn Matti Lehtonen as General Manager of LSS in China
He replaced Singaporean P.S. Sim, the original GM
“Sim was busily engaged in marketing and sales, He has no time for quality,
operations, costs, or other issues.”

2007: Lehtonen, an engineer with over 25 years experience in China
He built a team with long experience in GE Healthcare China
A few key hires (engineering, sales) from the outside.
GE Health Care China:
Entering an Emerging Market
 GE underestimated the quality problems that they had
inherited and had to stop shipping CSW machines. DO
machines were high quality, but assembled at another,
separate site in Wuxi. Engineers were too busy fixing
quality problems to do the necessary product design work
to replace the existing CSW products with new one.
“We have to put about 90% of our engineering resources on
maintenance. If I could start from scratch and put 90% of the
engineering resources on new product development, we could
reduce quality issues by 80%.”
Survey Results: Late 2007
Leadership Team
Managerial & Supervisory
What to Do?
R&D
GE Health Care China:
Entering an Emerging Market

Lehtonen decided to lead with vision. The goal was to inject a
strong sense of vision, mission, and strategy into the organization
and reshape the mindset of all employees. He held monthly town
hall meetings that involved all 180 employees on site to discuss the
vision and the strategy map for the organization and for each
function.

The culture survey results showed that among the engineers, there
were three major issues: lack of customer focus, limited sense of
purpose, and little attention spent on capability development. They
addressed this issue by sending each of their engineers into the
operating room one day each year, to see their products in action.
“When I was in the operating room, the idea occurred to me that if the
machine didn’t work, we could harm people. On the other hand, when
the operations are successful, I feel proud of my job because I help save
people’s lives.”
Survey Results: Early 2009
Leadership Team
2008
2009
Managerial & Supervisory
R&D
GE Health Care China:
Entering an Emerging Market

Leading with process was much harder. The organization had at
least three different processes: GE Process, DO Process, and CSW
Process. They involved very different mindsets:
“It seems no one realizes how much a good process means to engineers.
My understanding is that a good process is like a signpost on the
highway. With a good process, you’ll know clearly how to do things…
Engineers are people who like to ask “why” and find the answer… But we
have neither clear signposts nor people answering the question here…
Sometimes you have to spend more than a day doing something that
could be done in one hour with out the process.”
“The new GE process is developed based on US FDA requirements. Its
level is just too high for our low baseline.”
“A lot of requirements come from EHS (environment, health and safety),
HR Finance, and other functions. GE culture is very aggressive. You
must close lots of things within a very short period of time.”
“We can’t use the DO process as it doesn’t have a supporting system
here. But the new process is not clear. When you get lost with the
process and ask someone else, it seems no one knows the direction.”
Questions & Answers