In last week’s post, we featured two CEOs who have been successful in defining, inspiring and embracing purpose in their companies. This week, it’s all about the “transformers.” Not the Autobots and Decepticons from the media and toy franchise, but the inspired leaders who have championed cultural transformation.

To transform a company culture, leaders need to create the conditions for transformation to happen. A leader can’t really change the culture of a company without some help. Inspired leaders can invite their employees to change the culture through their behavior, vision and purpose. Simply put, transformation starts at the top.

Driving Change at Ford

It was 2006, and Ford Motor Company was on the edge of bankruptcy. With a fractured corporate culture that saw rival leaders within the company working at cross purposes, it was clear that a change was desperately needed. Having previously helped Boeing save the airline industry, Alan Mulally was brought in as president and CEO, and immediately began a cultural shift within Ford that would also transform the carmaker’s bottom line.

Mulally saw the importance of “reinforcing the idea that everyone is included. Everyone is part of the team and everyone’s contribution is respected, so everyone should participate.” That sense of participation and inclusion had a dual effect. As it instilled greater levels of accountability across the organization, it also created higher levels of personal ownership, and ultimately, job satisfaction.

As Bryce G. Hoffman writes in his book, “American Icon: Alan Mulally and the Fight to Save Ford Motor Company,” Mulally saw one of his key roles as “cheerleader-in-chief, keeping everybody motivated and focused.”

Mulually’s vision for Ford had groundbreaking impact across the organization. As its culture pivoted from a siloed focus to a supportive, outward-focus, the company experienced a tremendous upswing. Eight years later, Ford continues to rebound, posting an annual profit every year since 2009.

ford1A maverick approach to business

Patagonia, Inc., a company born out of a passion for the outdoors, has grown over the past few decades into a thriving business known for its embodiment of outdoor adventure, as well as its social responsibility. Along the way, founder Yvon Chouinard faced numerous challenges to his vision for the company, and his commitment to the environment. Those challenges inspired him to pursue a company culture that reflected his own values, and over time, create a culture that today is unlike any other.

Respect for the environment

In his book, “Let My People Go Surfing,” Chouinard writes, “Everything we personally own that’s made, sold, shipped, stored, cleaned, and ultimately thrown away does some environmental harm every step of the way, harm that we’re either directly responsible for or is done on our behalf.”

That mindset informs every area of Patagonia’s business, serving as a benchmark for decision-making from upper management down to new hires. The company sponsors numerous environmental and social responsibility measures and promotes a remarkable layer of transparency. For example, the Footprint Chronicles® examines Patagonia’s life and habits as a company, revealing details about its supply chain to help reduce negative impacts on the environment.

Quality comes first

According to Chouinard, “Making a profit is not the goal because the Zen master would say profits happen ‘when you do everything else right’.” That focus on doing the right thing, every time, has created a culture of applied dedication, where “employees treat work as play and regard themselves as ultimate customers for the products they produce…”

Chouinard often speaks to the very independent-minded nature of his employees. “How you get these highly individualistic people to align and work for a common cause is the art of management at Patagonia.”

It’s an art form that Chouinard and his team continue to practice and perfect. Stating the importance of knowing the difference between leaders and managers, he writes, “Managers have short-term vision, implement strategic plans, and keep things running as they always have. Leaders take risks, have long-term vision, create the strategic plans, and instigate change. The best leadership is by example.”

The culture Chouinard has pioneered at Patagonia continues to serve as a powerful example of a company that holds itself to a higher standard, and as a result, continues to grow a dedicated and loyal following of customers the world over.

Patagonia1The transforming power of values

It was the early days of Netflix, and the company’s transition from start-up to market leader was shaping up to be a bit of a rollercoaster ride. CEO Reed Hastings had ongoing discussions with then Chief Talent Officer Patty McCord on the ways in which the company could define its culture. They chose to study individuals they had worked with in the past, then pinpoint and emulate what made them successful. This led to more hiring, and oftentimes, the wrong hiring.

With the dot-com bubble burst in 2001, Netflix experienced huge layoffs. But with so many people out of work at the end of that year, business began booming. More people were home, and renting movies. The need to build back the company’s talent base was apparent, but McCord had a different idea. Quoted in a SHRM.org profile, she said, “Maybe I don’t need more employees. Maybe I need fewer but better.” That idea led her and Hastings to rethink their recruitment strategy, and over time, revolutionize HR. And it all started with a simple Power Point Presentation.

McCord developed a “culture deck” that spelled out the non-traditional approach Netflix was taking with hiring and employee engagement. The deck, known as, “Netflix Culture: Freedom & Responsibility,” proposed ideas that might seem counterintuitive at other companies. Employees should decide how much vacation they should take. As a company grows, it should resist the temptation to impose more rules and control; instead, it should hire the kind of high-performers that succeed whether rules are in place or not.

The deck served as a snapshot of the emerging culture at Netflix, a culture transformed by the pioneering efforts of Hastings and McCord. It sent shockwaves through the industry, quickly going viral (to date, it has been viewed more than 5 million times).

Today, Netflix is growing in ways no one could have predicted. Last year, its stock tripled, its subscriber base approached 30 million, and the company even won three Emmy awards. No small feat for a company that at one time faced crippling layoffs and an uncertain future in the home entertainment market.

Netflix1Next week, in the fourth and final post in this series, we’ll focus on the importance of aligning your employees behind purpose.

Is purpose a priority in your company? Is your culture in the process of transformation? Are your employees aligned with your company’s purpose? Send us a message at conversations@jwtinside.com or follow us on Twitter @JWTINSIDE.

Chief Executive Officer A savvy gunslinger of down-to-business with an aptitude for the written word and a master tactician, our CEO John Windolph holds the great ship on course as leader and visionary.