"Cultured" Corporate Winners

How clear goals--and some office heroes--can bring success

Japanese management techniques will not reverse America's economic decline. Neither will obsessive number crunching or strategic planning. O.K., so what will? Strong corporate cultures, that's what. Such is the blunt message of Corporate Cultures (Addison-Wesley; 242 pages; $14.95), a lively dissection of American business winners written by Terrence E. Deal of the Harvard Graduate School of Education and Allan A. Kennedy, a Boston-based consultant. Executives, say Deal and Kennedy, must recognize that "a strong culture has almost always been the driving force behind continuing success in American business."

In defining what constitutes corporate cultures, the authors include not only a company's overall goals but also the subtle yet compelling little signals, like styles of dress or who gets promoted, that tell employees how to behave. Industrial powerhouses often sum up their cultural values in slogans like General Electric's venerable "Progress is our most important product" or Du Font's "Better things for better living through chemistry." Those mottoes not only help sell light bulbs, refrigerators and synthetic fibers, but tell the employees what their companies stand for.

Successful corporations also have pantheons of heroes, who serve as role models. Like Henry Ford of Ford Motor Co., Thomas Watson of IBM or Ray Kroc of McDonald's, they "have great symbolic and mythic value within the cultures of their companies." Employees are proud to be connected with these magical figures, say the authors, and draw strength and courage from them. Mary Kay Ash, who overcame severe arthritis to found Mary Kay Cosmetics, uses that achievement to inspire her salespeople.

Even though exceptional individuals such as Ford, Watson and Kroc are rare, companies continually create new heroes. The members of IBM's "Hundred Percent Club," who have met their annual sales quotas, become office stars. Likewise, the McDonald's franchisee who cooked up the idea for the fast-food chain's bestselling "Egg McMuffin" breakfast sandwich in 1972 found his way into Ray Kroc's autobiography, Grinding It Out: The Making of McDonald's, and has become part of company lore.

The cultural identity of a firm can range from supercharged overdrive to bureaucratic caution. At Tandem Computers Inc., a rapidly growing high-tech firm south of San Francisco, the work week ritualistically climaxes in Friday-afternoon company-sponsored beer busts in the company cafeteria. By contrast, Dallas-based Mary Kay Cosmetics seeks more of a frills-and-lace image. Each year, at lavish seminars, the top producers among the firm's virtually all-female sales force are awarded pink Cadillacs, diamonds and mink coats.

As often as not, a firm's in-house culture is reflected in the face that the company presents to the world at large. The "work hard / play hard" cultures of companies like McDonald's, IBM, Xerox, Pitney Bowes and R.H. Macy carry well beyond the office, showing up in a dedication to sales and customer service. A spirit of entrepreneurial risk-taking helps "bet-your-company" firms like Exxon and Boeing to make huge investments in high-risk ventures that take years to develop.

Skills that create success in one company's culture can cause failure in another's. Deal and Kennedy would urge a rising GE executive to think hard, for example, before accepting a bigger job at Xerox. Reason: GE moves slowly and cautiously, while Xerox runs at "a near frenetic pace."

The clash of corporate cultures may, in fact, help to explain why many highflying 1960s conglomerates such as Litton Industries, LTV and RCA later stumbled. By swallowing up companies with widely different cultures, some conglomerate leviathans all but invited interoffice quarreling and management disputes. In many cases the only way to resolve such problems has been to spin the acquired companies off, sometimes at a painful loss.

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