Culture Renovation

the transformation of microsoft under satya nadella stands as one of the most dramatic cultural renovations in corporate history. when nadella took over as ceo in 2014, he inherited a company struggling with innovation and internal competition. within five years, microsoft's market value had soared from $300 billion to over a trillion dollars. 

how was such a dramatic turnaround possible? the answer wasn't a revolutionary new product or a string of smart acquisitions – it was a carefully orchestrated renovation of the company's culture. this story, along with others from companies like 3m, cvs, and amazon, reveals a practical framework for transforming organizational culture. 

in this chapter, you'll find essential steps that separate successful cultural changes from the 85% that fail. while we can’t cover all 18 of the steps, we’ll find plenty of actionable strategies drawn from some of the most dramatic cultural turnarounds in corporate history.

let’s get started.

microsoft’s cultural renovation didn't happen by accident. it began with careful listening.

the first step of successful culture change is developing a comprehensive listening strategy. traditional annual employee surveys aren’t enough. they fail to capture real-time sentiment and can be skewed by recent events or current moods. modern approaches are more nuanced and more immediate. amazon, for instance, asks employees a single strategic question each day before they log into the network. questions like "is your manager a simplifier or a complexifier?" serve both to prompt reflection and gather valuable insights into the state of the company.

for large organisations, natural language processing allows companies to analyze employee sentiment continuously. this technology helps identify emerging issues before they become crises and provides a more authentic view of employee experiences. microsoft leveraged this approach early in their transformation, gathering input through multiple channels including focus groups, leadership discussions, and ongoing pulse surveys. they then took an innovative step by creating a "culture cabinet" – a group tasked with distilling more than 50 different cultural aspirations into clear, actionable statements that would resonate with employees.

perhaps no one expressed the importance of listening more colorfully than former t-mobile ceo john legere. legere says he can summarize everything he knows about effective leadership as the following: "listen to your employees, listen to your customers, shut [up], and do what they tell you." legere backed up these words with action, becoming the first t-mobile ceo to regularly visit call centers across the country. these visits weren't just symbolic – they were part of a systematic effort to understand employee experiences and remove obstacles to success. 

the lesson is clear: before attempting to change culture, organizations must first understand their current reality through the eyes of their employees. modern tools and technologies make this easier than ever, but the fundamentals are the same – leaders must genuinely commit to hearing and then acting on what they hear.

in 1923, a 3m engineer named richard drew was visiting an auto body shop when he noticed a frustrated mechanic struggling with a two-tone paint job. the painter's tape kept leaving residue and ruining the clean lines he needed. drew spent the next two years obsessing over this problem, experimenting with different adhesives and backing papers. the result was scotch masking tape – a product that would help define 3m's future and exemplify its culture of innovation. even more remarkably, drew soon noticed a colleague wrapping his masking tape in cellophane and had another insight: what if the adhesive was on the cellophane itself? this observation led to the invention of the scotch tape we know today. 

these inventions weren't accidents – they emerged from a carefully cultivated culture of innovation established by william mcknight, who rose from bookkeeper to ceo in the early 1900s. mcknight instituted what became known as "15 percent time," encouraging employees to devote a portion of their workday to experimenting with new ideas outside their normal responsibilities. this policy, which would later inspire google's similar "20 percent time," led to countless breakthrough products including post-it notes and wireless electronic stethoscopes.

mcknight understood the second step to cultural change – preserving what works while evolving what doesn't. he formalized this philosophy in what became known as the mcknight principles, which emphasized pushing decision-making down through the organization and tolerating mistakes: "if you put fences around people, you get sheep. give people the room they need."

this balance between preservation and evolution continues under current ceo mike roman. when roman took the helm in 2018, he launched a massive listening campaign that gathered over 21,000 ideas from employees globally about what elements of 3m's culture to preserve and what to change. today, 3m approaches culture with the same experimental mindset it brings to product development – hypothesizing, iterating, learning, and improving.

from drew's keen observation in an auto body shop to today's global innovation engine with over 60,000 products, 3m's story demonstrates that successful cultural transformation isn't about wholesale reinvention – it's about understanding what to keep, what to evolve, and how to bring people along on the journey.

one of satya nadella’s first acts as microsoft ceo was to challenge the company's longtime mission statement: “a computer on every desk and in every home.” while this had been an ambitious goal in 1980, by the 2010s it was obsolete. as nadella observed, they had confused a temporary goal with an enduring mission. his new purpose statement was bolder and more lasting: “to empower every person and every organization on the planet to achieve more.” 

after listening to your organization and assessing its current state, the third critical step in cultural transformation is setting a clear path forward through purpose. an effective statement of purpose captures why a company exists and provides a north star that can guide decisions for generations. the best purpose statements work on multiple levels. first, they should be relevant to both customers and employees. second, they should be capable of guiding both major strategic decisions and daily choices. and third, they must differentiate the company from competitors.

perhaps no company has demonstrated the power of purpose more clearly than cvs. in 2014, cvs announced it would stop selling tobacco products at its 7,800 us locations – a decision that would cost $2 billion annually in lost sales. the reason was simple but profound: selling tobacco products was inconsistent with their purpose of “helping people on their path to better health.” this wasn't just a marketing move. the decision led to measurable social impact, with 100 million fewer cigarette packs sold in states where cvs had significant market presence, within just one year.

for leaders seeking to set or refresh their organization's cultural path, the key is authenticity. purpose statements can’t be hollow marketing slogans – they have to reflect genuine organizational values and guide real decisions. when purpose, culture, and brand align, companies create what might be called a new corporate currency – one that attracts talent, engages employees, and resonates with customers. the result is a sustainable organization that can thrive while making meaningful contributions to society.

at amazon, every important meeting begins with silence. instead of powerpoint presentations, attendees spend up to 30 minutes quietly reading detailed memos – memos that presenters have often spent weeks preparing. jeff bezos admits it’s a bit strange, but insists it drives deeper thinking and better decisions. “if we don't,” he explains, “the executives – like high school kids – will try to bluff their way through the meeting.”

this distinctive practice illustrates the fourth critical step in cultural transformation: defining specific behaviors that will shape your organization's culture. after establishing purpose, leaders must translate cultural aspirations into concrete, observable actions that employees at every level can understand and embrace. this is particularly crucial given that 77% of adults evaluate company culture before applying for positions, with 56% ranking it as more important than compensation.

cultural behaviors flow from the top. when leaders consistently model specific practices – like amazon's commitment to deep thinking through memo writing – these behaviors cascade throughout the organization. they become embedded in everything from meeting protocols to decision-making styles, ultimately defining how work gets done.

f5, a global technology company, demonstrates how to implement this systematically. under ceo françois locoh-donou, the company developed “bef5” – five core behaviors: customer obsession, helping others thrive, choosing speed, taking ownership, and promoting diversity. rather than just listing these as values, f5 embedded them into every aspect of operations – from performance reviews to recognition programs to hiring decisions. the behaviors appear prominently in their seattle headquarters and are regularly reinforced in leadership communications.

defining the core cultural behaviors requires both systematic planning and constant reinforcement. behaviors must be clearly defined, consistently modeled by leadership, and integrated into formal systems. this means examining every aspect of operations – from how meetings are run to how decisions are made – and ensuring they align with the desired culture. 

one practical approach is to create "behavior checkpoints" in key processes: before any major decision is finalized, leaders should pause and explicitly evaluate whether the process followed matches behavioral goals. for instance, if “inclusive decision-making” is a core behavior, leaders might ask: “did we gather input from all affected teams? did we give people adequate time to voice concerns?” 

while the specific behaviors will vary by organization, the principle is the same: culture is shaped by the behaviors leaders choose to model, reward, and systematically reinforce.

ask any employee “is work done according to the org chart?” and you'll get a knowing laugh. in every organization, there are those unofficial “go-to” people who really make things happen – the colleague who always knows how to navigate a tricky situation, or the quiet problem-solver who keeps projects on track. these informal influencers are the hidden backbone of any organization, yet surprisingly, most executives don’t know who they are.

this brings us to the fifth critical step in cultural transformation: identifying the influencers, energizers, and potential blockers who will determine whether change succeeds or fails. research shows that just 3-5% of employees account for up to a third of the valuable collaborations in typical organizations. that makes these specific individuals crucial to any cultural shift.

through organizational network analysis (ona), companies can map these informal influence networks. they do this by surveying employees about their work relationships or analyzing communication patterns. this reveals three key types of players: connectors who serve as go-to resources for many colleagues, boundary spanners who bridge different departments or functions, and energizers who create enthusiasm and inspire creativity in those around them.

abbvie, a global pharmaceutical company, leveraged this understanding by establishing a network of “culture ambassadors” throughout their organization. as human resources chief tim richmond discovered, these local representatives were crucial in translating corporate initiatives for their specific contexts, across 75 countries.

companies should systematically identify and engage these informal leaders. first, map company networks through surveys or communication analysis, then formally enlist the influencers as change champions. regular check-ins with these individuals provide early warning of potential resistance and help ensure initiatives resonate at all levels. remember: cultural change moves at the speed of trust, and these key influencers are the ones who build and maintain that trust.

when garry ridge took over as ceo of wd-40, he did something unexpected: he required every employee to take the “maniac pledge,” a solemn vow to become a “learning maniac.” the pledge committed employees to take action, ask questions, and share knowledge without fear. the result? employee engagement soared above 90%, and the company's stock price increased sevenfold.

so far, we've focused on the steps necessary to plan a culture change. now let's look at two key steps to implementing your plan: clear communication and future-focused storytelling.

first, successful culture change demands crystal-clear messaging from the top. research shows that nearly 80% of successful transformations were led by ceos who communicated consistently and frequently. leaders who succeeded focused on future opportunities rather than past problems. for instance, qualcomm developed an innovative “52 weeks” program, sending one company story weekly to new employees that highlighted key values and innovations, helping them understand both the company’s heritage and future direction. these stories became so popular that thousands of existing employees requested to receive them as well, creating a shared narrative throughout the organization.

second, culture change requires a compelling vision of the future, best conveyed through strategic storytelling. the most effective organizational stories contain three elements: the origin (what sparked the company’s creation), the customer impact (what problem was solved), and the future vision (how the company will make a difference). take trader joe’s: their story is one of differentiating from conventional grocery stores by offering unique international foods. this story not only explains their past but continues to guide their future direction. the founder’s experience traveling the caribbean and noticing americans’ newfound taste for international foods became more than just history – it became a blueprint for ongoing innovation.

success in cultural transformation demands relentless momentum. in 89% of successful culture changes, leaders maintained their commitment through a steady cadence of town halls, site visits, and consistent messaging across all channels. rather than viewing culture change as a finite project, successful organizations embrace it as a continuous journey, with leaders creating a drumbeat of reinforcement that touches every corner of the organization. through personal engagement in everything from informal conversations to major milestone celebrations, these leaders create an unmistakable signal that cultural change remains a top priority long after the initial announcement fades.

the main takeaway of this chapter to culture renovation by kevin oakes is that successful cultural transformation in organizations follows six key steps: 

first, develop a comprehensive listening strategy to understand your current reality. second, identify what elements of culture to preserve while evolving others. third, establish a clear and authentic purpose that guides decisions. fourth, define and model specific behaviors that define the culture you want. fifth, identify and engage key influencers who can drive change throughout the organization.

finally, maintain momentum through clear communication and compelling storytelling. from microsoft's trillion-dollar transformation to cvs's bold decision to stop selling tobacco, these principles have helped companies align their culture with their mission and values – with exceptional results.

okay, that's it for this chapter. we hope you enjoyed it. if you can, please take the time to leave us a rating – we always appreciate your feedback. see you in the next chapter.