2. Background
EDS, set up in Texas in 1962, was the pioneer of IT ‘Outsourcing’ industry in US.
Founder Ross Perot believed in ‘Can Do’ culture, to promote this new concept.
Company grew slowly initially, but picked up exponential path after it was acquired by GM
in 1984.
Gradually slowing up, Co could not keep pace with new developments in IT, was at peak of
crisis by 1998 when GM decided to sell off.
Dick Brown becomes the new CEO in 1998, first outsider to take the position.
Brown identifies Structural and Cultural issues, comes out with bold and smart decisions,
and subsequently turns around the company.
A good case to understand how culture can Make or Break a Company..
3. Symptoms & Diagnosis
Symptoms Diagnosis
MIS not integrated, Unable to send mail Poor communication, Information
Blockage
$ 80 billion contract backlog of signed Lethargic Attitude, Lack of commitment
contracts
No financial & marketing data available Performance no valued
Last minute mail reply Absence of Enthusiasm & Urgency
Inflexible & Indifferent behavior Unwillingness to change
CEO Dick Brown was quick to identify the ‘Cultural Gap’ at EDS, and made policies
accordingly.
4. What lies beneath such Artifacts?
Artifacts
Behavior
Values
Fundamental
Assumption
In Order to get to Root Causes, we need to find these Fundamental Assumption
5. Root Causes for the Poor Organizational Culture
Weak leadership from former CEO -- Cultural
A leader get the behavior what he tolerates.
Split Organizational structure
Each unit had separate P&L, Strategy
Organization lacking cohesiveness, customer orientation
Less accountable, More inefficient
No performance related appraisals/punishment -- Cultural
Promoting Lethargic attitude
Deadlines not met.
Poor Benchmarking
Absence of quality check & feedback loop.
Culture of the Organization is nothing but how it’s people think and act..
6. Actions & Reactions For Cultural Change
Focal Question Learning Focus Desired Outcome
1. Why? Facts and shared desire Common understanding
to improve of challenges
2. What? Identifying Root Causes Common direction &
purpose.
3. How? New Process & Strategies Common learning and
experience
4. What if? Integration Converting business
process into Culture
A cultural change may be initiated by the leadership, but will be successful only if it reaches
the Grass root levels of the organizations.
7. How did CEO Brown turned around the Company
Project Breakaway
Restructuring to become ‘Customer Centric’
Promoting Co-ordination and Efficiency.
Culture of Accountability
Monthly Performance call – compulsory feedback & follow through
Helping executives to learn from CEO experience.
Culture of Unfiltered Communication
Instant and in person contact with CEO
Promoting inter-unit communication
Hiring & Firing Policy
People who don’t buy the cultural change are exited.
New people with right orientation and ‘desire to win’ are in.
Changing the Tone & Content of every day conversation
Optimistic talk for reviving and driving the growth of company
Talking more about the success of company/team rather than individuals.
8. Key Takeaways –
Cultural Change flows from top, but had to be supported by all levels.
Communication – both top down & horizontal
Cooperation – between different verticals & units
Collaboration – between all stake holders
..are key means to achieve high performance through cultural change.
