The Secret of Culture Change

The Secret of Culture Change Plot Summary

Introduction

Picture a company on the brink of collapse. Revenue is plummeting, employee morale has hit rock bottom, and the executive team is divided on how to move forward. In this critical moment, the newly appointed CEO does something unexpected. Instead of announcing layoffs or restructuring plans, she invites a junior employee from the call center to address the executive committee about customer service failures. This bold move—breaking all hierarchical norms—becomes the catalyst for a cultural transformation that ultimately saves the company. Culture change isn't just about new mission statements posted on walls or mandatory training sessions. It's about authentic stories that signal a clear break with the past while pointing toward a better future. Throughout human history, stories have been our most powerful tools for creating meaning and inspiring action. They speak to both our rational minds and emotional hearts. When leaders build and share stories that embody the values they wish to instill, they create powerful ripples that can transform entire organizations. This journey of cultural transformation through storytelling is what awaits you in the chapters ahead—practical insights into how genuine stories, not just words, can fundamentally change how people think, feel, and act within organizations.

Chapter 1: Building Authentic Stories That Break with the Past

When Michael Schutzler became the founder and CEO of FreeShop, he believed that establishing strong organizational values was essential for success. Drawing on conventional wisdom, he wrote down five core values that he personally valued and had them prominently displayed on the wall for all employees to see when they entered the office. Feeling confident that he had laid the cultural foundation for his startup, he went about his business. Soon after, seeking feedback on his initiative, he approached several employees to ask what they thought about his list of values. Their responses shocked him. "You know that list of values is a joke, right?" one employee said bluntly. Confused and somewhat offended, Michael insisted that he truly meant those values. The employee replied, "I'm sure you do mean these things, Michael. They are your values. But they don't represent our company. We don't live up to these values. They are nothing like us. We should write up there what we are, not what you think we should be." This feedback struck Michael like lightning. He realized his mistake immediately—he had imposed his personal values without considering the reality of the company's current culture. In response, he erased his list from the wall and began facilitating discussions with employees about "What are we?" and "What will make us successful?" These conversations revealed the truth about where they actually were culturally and what they needed to improve to succeed. One particularly revealing insight came when Michael discovered that while he had included "having fun at work" as a core value, most employees didn't prioritize this. What they really valued was taking the company public and creating wealth. They each had their own ways of having fun outside work. The employees agreed that winning—defined as taking the company public—was important, and that winning could be fun, but "having fun" itself wasn't a core value they identified with. By acknowledging his mistake and inviting employees to co-create the company's values, Michael built an authentic story that exemplified humility and openness to learning. This story became powerful precisely because it was genuine—it revealed his willingness to be vulnerable, to admit he was wrong, and to truly listen. Through this experience, Michael learned that effective culture change begins not with imposing values from above, but with authentically engaging people in the process of defining who they collectively are and who they want to become.

Chapter 2: Starring in Your Own Leadership Story

Annette Friskopp joined a small satellite fleet management company as one of their first employees. When the CEO gathered the team and announced, "Look to your left, look to your right. I can't afford to keep paying both of you, so one of you is going to be gone in three weeks," Annette didn't wait for fate to decide her future. She immediately stood up and headed for the door. When the CEO asked where she was going, she replied, "I'm wasting time sitting here talking to you guys. I know what we need to do. We need to go get customers, we need to sell, so I'm wasting my time sitting here." Without a clear plan but driven by determination, she booked a flight to New Orleans—the only place she could think of where there might be fleets of vessels to track. Upon arrival, with no contacts or leads, she used the Yellow Pages to find potential customers. After several calls, she secured meetings with towboat companies operating on the Mississippi River. Not content with office meetings alone, she asked to see operations firsthand and was invited to ride on the barges from Baton Rouge to New Orleans. Sitting in the wheelhouse of a towboat pushing half a mile of barges, Annette observed the captain filling out enormous paper logbooks. When she asked how this information was processed, she discovered it took up to 90 days from the time a service was provided until an invoice was generated. Armed with this insight, Annette returned to California and built a software system for fleet management with touch-screen technology that allowed captains to enter information in real-time. This innovation reduced the billing cycle from 90 days to 90 seconds, dramatically improving cash flow for the industry. Her solution captured 90% of the market. Annette's story demonstrates the power of personal courage in building a cultural narrative. She could have assigned someone else to do the field research, but by starring in her own story—venturing into unfamiliar territory, asking questions, and immersing herself in the customer experience—she created a powerful example for others to follow. As one of the few women in the vessel fleet management business, her willingness to break gender barriers added another dimension to her story's impact. This experience shaped Annette's leadership philosophy throughout her career. She continued to prioritize direct customer engagement, even using similar approaches when entering new markets like commercial fishing. The lesson is clear: when it comes to culture change, your deeds matter more than your words. By physically embodying the cultural values you wish to instill—curiosity, customer focus, and bold action—you create a story that resonates far beyond any policy document or mission statement.

Chapter 3: Appealing to Both Hearts and Minds

When Marise Barroso became CEO of Amanco Brazil, the leading manufacturer of pipes and fittings for water management systems in Latin America, she found a demoralized company. After ten years of struggling against their dominant competitor—Tigre Tubos e Conexões, which held 60% of the market—employees had lost hope. Tigre's advertisements emphasized their superior quality (though tests showed their products were no better than Amanco's) and allowed them to charge a 25% premium. Marise needed to transform the company's culture from defeatist to confident, but she understood that this required appealing to both rational analysis and emotional connection. Behind the scenes, her team conducted careful segmentation analysis, estimated marketing costs, and made the strategic decision to compete directly with Tigre rather than pursuing a lower-price strategy. This rational foundation was crucial, though invisible to most employees. For the emotional connection, Marise turned to something universally beloved in Brazil—soccer. "I've got to find a way, using very simple and popular language, to make people understand our potential. We are losing the game because we aren't even showing up to play," she explained. She organized the largest sales convention the company had ever held, featuring Milton Neves, a famous soccer commentator. The entire event was structured around the metaphor of Amanco becoming a championship soccer team. This sports metaphor caught fire throughout the organization. Employees spontaneously began creating "green waves" (the company color) at retail stores, covering them with banners and balloons while chanting "Amanco, Amanco!" The battle cry became so popular that salespeople made it their ringtone. In one memorable television commercial, a salesman wearing an Amanco T-shirt petted a tiger's ears, symbolically taming their fierce competitor. The results were remarkable. Within six months, brand awareness jumped from nearly zero to 56%. When Marise joined, Amanco had 7% market share compared to Tigre's 61%; when she left, Amanco had 34% while Tigre had fallen to 41%. The cultural transformation was complete—employees who had once been demoralized now saw themselves as part of a winning team. What makes this story particularly instructive is how it balanced logical business strategy with emotional engagement. Without the underlying market analysis and strategic decision-making, the soccer analogy would have been just an exciting sales meeting with no follow-through. But without the emotional power of the sports metaphor that resonated deeply in Brazilian culture, the strategic plan might never have inspired the passion needed for implementation. True cultural transformation requires appealing to both hearts and minds.

Chapter 4: Creating Theatrical Moments for Cultural Impact

Jeff Rodek, as the newly appointed CEO of Hyperion Solutions, faced a serious challenge. After a merger, the company had developed a complacent, self-satisfied culture despite mounting problems. When financial results deteriorated dramatically, leading to a large revenue and earnings miss, Jeff knew he needed to signal a clear break with this culture of complacency. An offsite meeting for the executive team had been scheduled at the luxurious Fairmont Hotel in San Francisco. Although the company had secured a favorable rate due to the technology industry downturn, Jeff was troubled by the inappropriate opulence given their poor performance. Since cancellation would mean paying for the venue anyway, he devised a different approach without informing his senior team. When executives arrived for the kickoff dinner, they found the table beautifully set with sparkling silverware, crystal goblets, and exquisite china—exactly what one would expect at such a prestigious hotel. But as the dinner began, Jeff stood up and played Elton John's "Funeral for a Friend" while the waiters served nothing but bread and water. "Normally, I would have canceled this event," Jeff explained. "It's not just the cost, it's the appearance—and we don't have the right to celebrate our dismal performance. We all know it's been terrible. We have let down our customers, employees, and shareholders. So I have decided to serve the only menu that we, as a company, deserve tonight. Bread and water. That is all we will get tonight, that is all we deserve tonight." The theatrical moment created a powerful impact, with executives nodding silently in acknowledgment. Jeff even warned that anyone who expensed so much as a Snickers bar that evening would be terminated. He continued, "My expectation is that we will solve the problems we are facing this year, and that next year we will completely turn the performance of the firm around. I want to be back in this ballroom next year... But I don't want to serve bread and water next year. I want to have an opulent meal. I want us all to deserve an opulent meal." This dramatic gesture marked a psychological turning point for the company. The turnaround began that very night, and one year later, they indeed returned to celebrate their success with a proper meal. The theatrical element of this story—the contrast between the elegant setting and the humble meal, the musical soundtrack, the solemnity of the moment—created a memorable experience that signaled the seriousness of their situation far more effectively than any PowerPoint presentation could have done. What makes this theatrical approach to culture change so effective is precisely its unexpectedness and emotional impact. By creating a visual and visceral experience that breaks normal patterns, leaders can penetrate the psychological barriers that often make employees resistant to change messages. The theatrical moment becomes a story that spreads throughout the organization, remembered long after bullet points and strategic plans are forgotten.

Chapter 5: Fostering a Cascade of Stories Throughout Your Organization

When Brett Keller became CEO at Priceline, he wanted to instill a culture obsessively focused on the customer experience. Rather than simply declaring this as a priority, he began building stories through his own actions. Brett became known throughout the company for regularly sending screenshots of issues he encountered while using Priceline's website and apps. "I'm a fanatical user of our products on all our platforms—desktop computers, mobile phones, iPads," Brett explained. "I also use our competitor's products, as well as the demand channels that we use to get consumers into our experiences." Late at night on weekends, he would search travel terms on Google, click on ads, and attempt to make reservations. Whenever he encountered a problem or friction point in the user experience, he would take a screenshot and send it directly to the product owner or business partner responsible for that area. Brett didn't demand immediate fixes, but he expected the team to consider whether what he identified was truly a problem and, if so, to address it. "It's very easy for people to get lost in their jobs and to lose track of what the consumer is actually experiencing," he noted. "It's like you put blinders on." His regular screenshots—sent at least weekly for over 20 years—continually reminded everyone of the importance of actually using their own product as customers would. This practice sparked a cascade of similar behaviors throughout the organization. Soon, product teams began proactively identifying and fixing user experience issues before Brett even spotted them. When he would send a screenshot, the response became, "Yeah, we're aware of this problem. It's already in the pipeline and we're going to fix it." The company transformed from one where employees generally did not use their own product to one where staff became expert consumers of their services. At Traeger Pellet Grills, CEO Jeremy Andrus created a different kind of story cascade after transforming the company's toxic culture. One Monday morning, his head of sales came into his office exclaiming, "You're not going to believe what Rob did over the weekend!" Rob, a junior employee, had received a call from a Costco warehouse assistant manager whose Traeger grill wasn't working before a big weekend cookout. Rather than passing the problem along or promising to call back Monday, Rob diagnosed the issue over the phone, bought a plane ticket from Salt Lake City to Seattle, delivered and installed the replacement part, and helped the customer season his brisket—all without seeking permission or recognition. What made this story particularly powerful was that Rob didn't see his actions as exceptional—he was simply living one of Traeger's core values: "no reservations" about creating meaningful customer experiences. Jeremy recognized this as the beginning of a story cascade and established a quarterly "Value Our Values" program where peers could recognize colleagues for exemplifying company values. This created hundreds of peer-to-peer recognitions that Jeremy would read and celebrate at weekly all-hands meetings. The most effective culture change occurs when stories begin to multiply organically throughout an organization. Leaders can facilitate this cascade by publicly celebrating employee-built stories, creating formal recognition programs, and consistently highlighting examples in company communications. When employees begin spontaneously building and sharing their own stories that align with the desired culture, transformation is truly underway.

Chapter 6: Aligning Policies and Practices with Your New Culture

Building powerful stories is essential for initiating culture change, but making that change stick requires aligning your organization's policies and practices with the new culture. Without this alignment, employees receive mixed signals: they hear inspiring stories about a new way of operating but experience systems and processes designed for the old culture. Manoel Amorim, CEO of Telesp (a Brazilian telecom company), understood this principle well. After building compelling stories about customer service and breaking down hierarchical barriers, he implemented substantial changes to employee evaluation systems. "We needed to align our employee evaluation system with our new culture," he explained. "The first thing we did was to implement scorecards to clarify what was expected from each employee, at all levels in the company." For the first time in company history, "Customer Satisfaction" became a component of everyone's scorecard. He also implemented a 360-degree evaluation system where employees received feedback from their boss, subordinates, peers, and key clients. In a previously hierarchical organization, having subordinates evaluate their bosses represented a radical cultural shift. To overcome initial fear and resistance, Manoel volunteered to be the first person evaluated this way. When his results came back—"and they were not 100 percent good"—he called a meeting with nearly 1,000 employees and openly shared his evaluation results, including areas where he needed improvement and his plan to address them. The audience was shocked: "Can the CEO be evaluated by other people in the company now?" But they quickly realized the benefits of this approach. Within a couple of years, what had initially caused anxiety became something employees actually looked forward to. Manoel followed this with changes to compensation practices, creating a rigorous ranking system where top performers received substantial bonuses funded by withholding bonuses from the bottom 20% of performers. At DaVita, a kidney dialysis company, leadership aligned their hiring practices with their "Trilogy of Care" culture (caring for patients, each other, and the world). Recognizing that technical skills alone wouldn't sustain their desired culture, they began evaluating potential employees based on values alignment alongside clinical competence. Their training programs incorporated stories that exemplified their "village" concept, helping new employees understand that DaVita was "a community first and a company second." These examples illustrate that while story building initiates culture change and story cascades spread it throughout an organization, alignment of human resource policies—how you hire, train, evaluate, compensate, and sometimes terminate employees—makes the change permanent. The timing of this alignment matters: attempting to change policies before building compelling stories often fails because employees don't yet understand or believe in the new culture. But once stories have begun shifting perceptions, policy changes reinforce and institutionalize the emerging cultural norms. Successful culture transformation ultimately requires a holistic approach—starting with authentic, leader-starred stories that break with the past; fostering a cascade of employee-built stories; and finally, embedding the new culture into the organization's formal systems and processes.

Summary

The journey through cultural transformation begins with an authentic story. The most powerful transformations don't start with grand declarations or polished presentations, but with leaders who build genuine narratives through their actions—stories that demonstrate a clear break with the past while pointing toward a more promising future. The courage to be vulnerable, to star in your own story, to appeal simultaneously to hearts and minds, and sometimes to be a bit theatrical—these are the elements that can spark true cultural revolution within organizations. What makes these stories so transformative is their ripple effect. When a leader builds an authentic story—whether it's Annette Friskopp venturing onto Mississippi barges, Jeff Rodek serving bread and water at a luxury hotel, or Brett Keller sending screenshots of user experience problems—it grants permission for others throughout the organization to build their own stories. This cascade creates momentum that eventually becomes self-sustaining. The final step comes when an organization aligns its formal policies and practices with these emerging stories, cementing the new culture into everyday operations. Remember that meaningful transformation isn't about perfection, but progress. Even the most accomplished leaders make mistakes along the way. What matters is authenticity—the willingness to acknowledge those mistakes, learn from them, and continue building stories that reflect your deepest values and the future you envision for your organization.

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Jay B. Barney

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