Creating a Culture of Profitability, A Revolutionary Model for Managing Culture by Rob and Aviva Kleinbaum

“This is a truly important book. Managers at every level of every organization, big and small, private and public sector, should read it." – Lawrence Harrison, Director of the Cultural Change Institute and Author of Jews, Confucians, and Protestants: Cultural Capital and the End of Multiculturalism, The Central Liberal Truth: How Politics Can Change a Culture and Save It from Itself, and Culture Matters.

“I have heard Rob Kleinbaum speak several times about what makes for a healthy, profitable corporate culture. I am always impressed by how clearly he explains what is, at its core, a very complex concept. He and his wife, Aviva, have now captured these ideas in an easy-to-read book. After finishing some of the chapters, one is tempted to think, 'Oh, that’s obvious.' Don’t be fooled; one of the hallmarks of a really good explanation of a complex thought is that the logic is obvious in retrospect.” – Patrick Leach, CEO, Decision Strategies Inc. and author, Why Can't You Just Give Me The Number?"

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ISBN-13: 9780964793897, ISBN: 0976479389X (print version)

ISBN-13: 9781941075005 (digital version)

Library of Congress Control Number: 2013956382.

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Academic Usage

Creating a Culture of Profitability can be utilized as a book of supplemental readings for MBA courses on management and supervision. Dr. Kleinbaum's codification of corporate culture and how to manage it is unique and highly recommended. Contact us for additional resources and information.

From the Back Cover

Improving culture in business has been a “soft” and subjective topic – until now. Rob and Aviva Kleinbaum have used Lawrence Harrison’s 30-year study of successful cultures as the foundation for a powerful and logical framework for analyzing and improving business culture.

Building on this research and integrating the work of others, the Kleinbaums have developed a conceptual model that is useful, based on data, and testable against experience. There are symptoms and metrics for the cultural ills that reveal problems before they become overpowering. They suggest reasonable and doable treatment plans that attack the symptoms and root causes. There is a workable plan for getting started and integrating cultural management into the existing organization, without adding bureaucracy or overhead.

Culture matters. Everyone knows that. But now something can be done about it.

A Note from the Authors – Rob and Aviva Kleinbaum

Thanks to Lawrence Harrison for bringing us into his work family and for creating the immense intellectual foundation on which the work rests, as well as his insightful and detailed comments on this work. Three successful but different businessmen – David Jerome, Greg Powel, and Nick Pudar – offered wonderful advice. The participants at the Society of Decision Professionals 2013 Workshop, “Managing Alligators,” were generous and thoughtful in their suggestions; they also reinforced our belief in the applicability of these ideas to managing projects.

The brilliant and eclectic participants of the Samuel Huntington Memorial Symposium: Culture, Culture Change, and Economic Development that took place in Moscow in 2010 provided a world class forum for discussing the main ideas in this book.

Ian Mutchnick took time out of his crazy schedule as a neurosurgeo to make valuable comments about the neurological underpinnings of culture; this could well be the wave of the future. Dan Kleinbaum has been a deep contributor to this work for the last two years. It would not be here without his thoughtfulness, support, and effort. It is a great blessing to have worked together.

This book has been a joint labor of love between the two of us over the last five years directly and over the last 15 years working together, always trying to blend our different point of views. It helps to be in love with your co-author, especially when talking loudly through the disagreements. We are each here because of the other.

About Creating a Culture of Profitability

Two years ago Rob Kleinbaum and I talked at a Decision Analysis Affinity Group (DAAG) conference about a book he had started working on. Rob and his wife Aviva had studied fundamental sociological research that Lawrence Harrison and others had been doing on determining why some cultures succeed and others fail and were extending this thinking to a business context. This concept was intriguing, so we agreed to undertake the project.

We went through many discussions and revisions of the text, especially as we got feedback from reviewers. In fact, it was just over a year ago when we provided our first comments back to Rob on the initial manuscript.

We believe the result is a powerful framework that gives managers and leaders the tools they need to create sustainable and profitable cultures within their organizations.

You might wonder why a publisher of decision analysis and game theory books would be interested in a book on business culture. The answer is simple: a company willnot realize the full benefits of implementing decision analysis unless the culture is positive. The Kleinbaums have systematized, organized, and codified what most of us who work have intuited but never organized.

Another distinction relative to decision analysis (DA) is that DA can sometimes be implemented, at least partially, from the ground up (although a medium to high level sponsor is usually necessary). To change the culture, the top person within a unit or a team or a company must be either the instigator or at least integrally involved in and supportive of the effort.

We suggest that you first read the book for an overall view of the content. Then refer to Chapter 12, which discusses how to get started.

We would sincerely like to hear your comments relative to this book, especially successful examples. Please e-mail dave@decisions-books. com, and we sincerely wish you success in your endeavors.

From the Book: Table of Contents

1 Introduction: A Better Way.......................................................1
 1.1 What do we Mean by “Culture?”...............................................3
 1.2 What is a “Good” Culture?...................................................4
 1.3 How this Book is Organized..................................................6
2 A Profitable Culture.............................................................9
 2.1 Core Purpose................................................................9
 2.2 Instrumental Values........................................................11
 2.3 Cultural Infrastructure....................................................12
 2.4 Culture’s Self-Preserving Mechanisms.......................................22
 2.5 Adaptability...............................................................25
 2.6 Cultural Map Summary.......................................................26
3 Managing Culture – Overview.....................................................29
 3.1 General Symptoms...........................................................31
4 Diagnosis and Treatment: Core Purpose...........................................35
 4.1 Forces of Entropy..........................................................35
 4.2 Symptoms...................................................................38
 4.3 Senior Management Remedies.................................................41
 4.4 Middle Management Remedies.................................................47
5 Diagnosis and Treatment: Instrumental Values....................................49
6 Diagnosis and Treatment: External Focus.........................................51
 6.1 Forces of Entropy..........................................................51
 6.2 Symptoms...................................................................54
 6.3 Senior Management Remedies.................................................60
 6.4 Middle Management Remedies.................................................63
7 Diagnosis and Treatment: Internal Trust.........................................65
 7.1 Forces of Entropy..........................................................65
 7.2 Symptoms of Internal Mistrust..............................................68
 7.3 Senior Management Remedies ................................................72
 7.4 Middle Management Remedies.................................................75
8 Diagnosis and Treatment: Leadership.............................................77
 8.1 Forces of Entropy..........................................................78
 8.2 Symptoms...................................................................80
 8.3 Senior Management Remedies.................................................82
 8.4 Middle Management Remedies.................................................85
9 Diagnosis and Treatment: Time Orientation.......................................89
 9.1 Forces of Entropy..........................................................90
 9.2 Symptoms...................................................................91
 9.3 Senior Management Remedies.................................................95
 9.4 Middle Management Remedies.................................................98
10 Diagnosis and Treatment: The Basics............................................101
 10.1 Forces of Entropy........................................................102
 10.2 Symptoms.................................................................102
 10.3 Remedies.................................................................105
11 Managing Cultural Law Enforcement..............................................107
 11.1 Financial Resource Allocation Processes..................................108
 11.2 Human Resources and Compensation.........................................111
 11.3 External Communication Rules.............................................113
 11.4 Internal Communication Rules.............................................114
 11.5 Process Enforcers........................................................116
 11.6 People...................................................................116
 11.7 Understanding the Rules..................................................117
12 Getting Started: Organizational Placement and First Steps......................119
 12.1 CEO and Senior Management................................................119
 12.2 Getting Started..........................................................120
 12.3 An Illustration..........................................................122
 12.4 Managers.................................................................124
13 Changing a Strong but Unhealthy Culture........................................127
 13.1 Change People............................................................128
 13.2 Respect and Confidence...................................................129
 13.3 GM Today – An Example Turnaround?........................................130
14 Managing Alligators: Making Projects Successful................................133
 14.1 Mapping Culture into Project Quality.....................................135
 14.2 Creating Alligator Management Plans......................................141
 14.3 Example: Product Development Strategy....................................141
 14.4 Applicability............................................................146
15 Culture and Profitability: A Test..............................................149
 15.1 Sample Selection Bias and Halo Effect....................................150
 15.2 Objective Data and Avoiding the Halo.....................................152
 15.3 Results..................................................................155
 15.4 Caveats..................................................................156
 15.5 Conclusion...............................................................156
16 Culture as a Limit to Growth...................................................157
17 Public Policy and Corporate Culture............................................159
18 Conclusion.....................................................................163
Appendix I: Lawrence Harrison’s Typology of Cultural Capital......................165
Appendix II: Retooling GM’s Culture...............................................173
Appendix III: Why Did Such a Nice Guy Finish Last?................................183
Index.............................................................................187
About the Authors.................................................................191