Reshaping the “Smell of the Place” – The Chrysler Story
“Individuals do not change fundamentally who they are, without any serious personal crisis of some kind. But the conclusion again for us, perhaps, the key conclusion is that is the wrong question to ask. Revitalizing people has a lot less to do with changing people and has a lot more to do with changing the context that companies, that senior managers create around their people. Some manager called it the smell of the place.”
I have found these lines by Late Dr Sumantra Ghoshal to be profound when it comes to organisational culture. Though Dr Ghoshal does not use “culture”, I contextualise “context” and “smell of the place” very similar to culture. He further goes on to assert that the desired “smell of the place” can be created and even the existing smell can be converted.
This story from the pages of Chrysler is an example of how converting the “smell of the place” or transforming the culture brought a turnaround in the organisation.
In the early 1980s, Chrysler was on the brink of collapse. Facing financial turmoil, plummeting sales, and a tarnished reputation, the company’s fate seemed grim. However, the arrival of a new CEO, Lee Iacocca, marked the beginning of a remarkable transformation – a transformation driven by a deliberate focus on organizational culture.
Iacocca recognized that turning around Chrysler required more than just financial restructuring; it demanded a fundamental shift in the company’s culture. He understood that the attitudes, behaviours, and values of the employees were key drivers of success. With a clear vision in mind, Iacocca embarked on a mission to instil a sense of pride, ownership, and innovation within the company.
One of the most iconic initiatives was the creation of the “Minivan Team.” Iacocca brought together employees from different departments, backgrounds, and expertise levels to work collaboratively on designing a new type of vehicle – the minivan. This cross-functional team broke down silos, fostered communication, and empowered employees to contribute their ideas, regardless of their job titles.
Iacocca also championed transparency and open communication. He held regular town hall meetings, where he candidly addressed the challenges facing the company and shared his vision for the future. This approach created a sense of unity and purpose among the employees, who felt more connected to the company’s mission.
Additionally, Iacocca leveraged the power of storytelling. He recounted the history of Chrysler, highlighting its legacy of innovation and resilience. These stories served as a reminder of the company’s potential and inspired employees to take ownership of their roles in shaping its future.
The revitalization of Chrysler’s organizational culture wasn’t without its challenges. Resistance to change, scepticism, and fear of the unknown were hurdles that needed to be overcome. However, Iacocca’s leadership, combined with the dedication of employees, gradually began to shift the company’s culture.
The results were astounding. Introducing the minivan was a resounding success, marking a turning point in Chrysler’s fortunes. The company’s financial health improved, and its reputation underwent significant rehabilitation. More importantly, the organizational culture that had been cultivated during this challenging time continued to thrive.
This story is just one of the examples from the history of organizational transformations about the immense impact that organizational culture can have on a company’s success. Cultural revitalization is possible, not with the intent to change people, but with the intent to create a context that helps people align with the vision and objective of the organisation.
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“Impressions From Time” is a curated series from Leaping Frog, about stories from the yesteryears that have helped shape the modern-day practices in the people and organisation domain.
Leaping Frog, a new-age consulting firm, is an enabler and co-creator in enhancing people and organisational effectiveness. We love doing work in the areas of “Driving Organisational Change and Development”, “HR Systems and Talent Strategy”, and “Leadership and Life Coaching”.
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