Culture Is How An Enterprise Honors It Mission

When Portuguese colonists first came across manioc in South America, they were a bit perplexed by the elaborate, multi-day process the indigenous people followed before consuming it. Some steps, like boiling the raw tuber to eliminate its bitterness and prevent digestive issues, appeared practical. Others, however, seemed more driven by superstition than anything else.

So when they transferred the crop to West Africa they streamlined the process. Yet, as Joseph Henrich explains in The Secret of our Success, the original ritual was more practical than it seemed. As it turns out, manioc, if not properly processed, has low levels of cyanide, which accumulate over time and cause chronic poisoning.

What the Portuguese didn’t realize was that they were seeing survivors—those who had inherited the knowledge to process manioc safely. Others who ignored these practices had died out. This same dynamic plays out in business. Leaders often see long-standing practices as outdated inefficiencies—when in reality, they may serve a critical, unseen function.”

Culture Is What You Don’t See

Businesses, like the Portuguese colonizers, often prioritize efficiency without recognizing the hidden value in institutional traditions. For example, when Bob Nardelli took over as CEO at Home Depot, he was determined to replace the retail firm’s famously decentralized, entrepreneurial culture. He intended to aggressively slash costs and streamline operations.

It didn’t turn out well. Immediately upon his arrival, Nardelli angered people by firing long-time Home Depot executives and bringing in cronies from his time at General Electric. His strategy of replacing full-time employees with low-cost, part-time staff undermined both morale and customer service. A warm, collaborative atmosphere was replaced by a cut-throat viper pit. The stock languished, investors balked and he ultimately resigned under pressure.

The interesting thing about the case of Nardelli and Home Depot is profits more than doubled under his tenure. In fact, just a year before he was ousted, uber-consultant Ram Charan published an article in Harvard Business Review praising the culture change at the company. Yet insiders weren’t fooled. They knew that, much like what happens when people eat underprocessed manioc, the organization was being slowly poisoned.

The truth is that culture is how an enterprise honors its mission. Home Depot built its business through forging trust with its customers. It invested in its store associates, many of whom were former or part-time contractors, and had an unrelenting focus on customer service. You went to Home Depot not merely to buy things, but to get advice on your home improvement project.

Those details were essential to the mission of the enterprise. Yet Nardelli didn’t take the time to learn about those unseen connections. He just came in and hacked away. It would take years for the business to recover.

Building Psychological Safety

Nardelli came up as an executive at General Electric and that informed his experience. GE had been in business for a century and, by the time his mentor, Jack Welch, took over, it had become somewhat bloated. Welch created a culture of rigorous cost discipline, which was enormously successful in improving profitability, but didn’t create any new businesses or value, which would eventually lead to the iconic firm’s downfall.

Ed Catmull, on the other hand, built Pixar’s business from the ground up. A key to the movie studio’s legendary success is its unique culture of creative feedback. At the heart of this is the ‘Braintrust,’ a select group of top directors and producers tasked with providing feedback on films in development.

When we had Catmull’s friend, Stanford Professor Bob Sutton, on our podcast, he told us that the Pixar founder would keep on a director he knew was failing for as long as a year—and accrue millions of dollars in costs—to avoid creating a culture of fear. To him, protecting the culture of trust among directors was well worth it.

It’s easy to imagine an outsider like Nardelli coming in and seeing how to immediately boost Pixar’s profits. Crack down. Cut costs. Fire directors faster. An incoming CEO would likely win praise from pundits like Ram Charan for making the “tough” calls. It’s easy to analyze an income statement, much harder to understand what’s going on below the surface.

That’s why organizations like Pixar are rare, because culture is made up of the norms and rituals that underlie behaviors. Those are the things that outsiders don’t see, but are crucial to how an organization functions.

Honoring Values That Further The Mission Of The Enterprise

When Paul O’Neill took over as CEO at Alcoa in 1987, the company was in dire straits financially. So analysts were astonished when, in his first appearance as CEO, he said. “Every year, numerous Alcoa workers are injured so badly that they miss a day of work,”he said. “I intend to make Alcoa the safest company in America. I intend to go for zero injuries.”

When the financial reporters and analysts tried to steer the conversation to financial targets, O’Neill would have none of it. “I’m not certain you heard me,” he said.” If you want to understand how Alcoa is doing, you need to look at our workplace safety figures.”

Or consider Lou Gerstner. When he took over at IBM, the firm was near bankruptcy and it was critical that costs be cut for it to stay in business. Yet one of his first acts was to visit the famed T.J Watson Research Center at Yorktown Heights and underscore that he considered research investments crucial to IBM’s future.

Unlike Nardelli, who prioritized short-term profits above all else, both would lead their firms to unprecedented profitability because they focused on furthering the respective missions of their enterprise. For O’Neill, and Alcoa that meant improving the process of manufacturing aluminum. For Gerstner and IBM, that meant inventing cutting edge technology.

O’Neill’s unwavering commitment to safety created a culture of operational discipline. As workers optimized processes to reduce injuries, they also discovered ways to improve efficiency. By championing research investment, Gerstner sent a clear message: IBM’s future would be defined by innovation, not just survival.

Managing For What You Don’t See

In his book Who Says Elephants Can’t Dance, Lou Gerstner wrote, “Culture isn’t just one aspect of the game, it is the game. In the end, an organization is nothing more than the collective capacity of its people to create value… What does the culture reward and punish – individual achievement or team play, risk taking or consensus building?”

Every organization, whether consciously or not, develops norms and rituals that shape behaviors. In a positive organizational culture, norms and rituals support behaviors that honor the mission of the enterprise. Negative cultures undermine that mission. A common problem with many transformation initiatives is that they focus on designing incentives to alter behaviors, ignoring the underlying norms and rituals.

Home Depot built a high-touch culture around serving the customer and sputtered when Bob Nardelli tried to impose a six-sigma mindset. Netflix, quite famously, has a culture deck that explicitly describes the norms that it expects its people to embrace. Amazon has built a writing culture around its six-page memo.

No leader has full visibility into their organization, and wise leaders recognize that control is an illusion. You can’t force your people to do what you want—there’s many of them and only one of you—but you can inspire them to want what you want by honoring a mission that they care about and can devote their energy and talents to.

When you empower people to achieve, they have a way of surprising you.

Greg Satell is Co-Founder of ChangeOS, a transformation & change advisory, an international keynote speaker, host of the Changemaker Mindset podcast, bestselling author of Cascades: How to Create a Movement that Drives Transformational Change and Mapping Innovation, as well as over 50 articles in Harvard Business Review. You can learn more about Greg on his website, GregSatell.com, follow him on Twitter @DigitalTonto, his YouTube Channel and connect on LinkedIn.