By: Sadie, Yvette, Lora and Mindy

Chapter 6Cult-Like Cultures

Are cults bad?Definition of Cult: A cult is a body of persons characterized by

great or excessive devotion to some person, idea or thing.

Definition of Cultism: A series of practices that create an almost cult-like environment around the core ideology in highly visionary companies

The word Cult can conjure up negative feelings, but by saying Visionary Companies have a culture is not saying enough about the tightness of fit. All companies have a culture, but visionary companies contain cultism, or cult-like cultures.

Cults vs. Visionary CompaniesVisionary companies and cults relate in the following

ways:

• Fervently held ideologies• Indoctrination• Tightness of fit• Elitism

This is how Visionary Companies become cult-like.

In Nordstrom’s, every new employee starts at the bottom.Live by the Nordstrom’s Pyramid: Please Customers First

Nordstrom

Employees are allowed to use their own judgments' to handle customer situations. This is reinforced by the high

rewards for good customer feedback.

Good customer feedback gives an employee the opportunity to become a “Customer Service All-Star” receiving:

• Discounts• Picture Displayed on Wall• Viewed as a “Hero” – stories written about that employee, and passed

down• Become a “Pace Setter” – 33% discount along with personalized business

cards• Increased autonomy

Nordstrom’s expects employee to set high standards for themselves. Whether this be sales goals, productivity and high achievement.

For those who buy into the cultures, and are truly dedicated to the company, this is a great place to work for. If someone does not align with the company culture, they won’t fit in – or feel like they should work there.

IBM has a strong sense of rules, appearances, and behaviors that extend beyond the working environment:

• No Smoking• Marriage is encouraged• Well groomedIBM also promotes from within like Nordstrom’s. In order to

begin work, new employees are sent to training programs in order to indoctrinate them into the corporate culture.

In fact, in 1930 IBM had created a “Schoolhouse” for training employees. This was used to socialize the employees into the new culture. Veteran employees were put into place to teach these classes. They created their own anthem which was sung before each class.

IBM

IBM also treated good employees as “Heroes”.

IBM created their own language inside their culture, called “IBM Speak”.

Working for IBM was equated to going into the military, as far as following the designated culture, rules and regulations for the organization.

IBM attained its greatest success and ability to adapt to change, during the same era that it displayed its strongest cult-like culture.

No one starts a position in P&G in Middle or Top management level who has garnered his or her experience at another company. Like the previous companies, P&G is a company where you move up from the bottom.

New employees socialize with other members of the P&G family to discover the culture norms. They attend a training and orientation that reads from their official biography, “Eyes on Tomorrow”. This book explains the integral part of the nation’s history with spiritual inheritance.

P&G is located in an ‘isolated-like’ area. They view themselves as a family – they attend a lot of the same clubs, churches, even the same neighborhoods.

Procter & Gamble

P&G strengthened its culture by offering a record of employee pay and benefit programs.

• In 1887, P&G introduced a profit-sharing plan for workers, making it the oldest profit-sharing plan in continuous operation in American industry.

• In 1892, P&G introduced an employee stock ownership plan, one of the first in industrial history.

• In 1915, P&G introduced a comprehensive sickness-and-disability-retirement-life-insurance plan – again, one of the first companies to do so.

By encouraging stock ownership, a high level of psychological commitment is developed. This profit sharing plan is restricted only to those willing to make a significant stock purchase – equal to the current value of their average wage.

“Procter & Gamble people all over the world share a common bond. In spite of cultural and individual differences, we speak the same language. When I meet with Procter & Gamble people – whether they are in Sales in Boston, Product Development at the Ivorydale Technical Center, or the Management Committee in Rome – I feel I am talking to the same kind of people. People I know. People I trust. Procter & Gamble People”

-John Smale (1986 Chief executive Procter & Gamble)

This shows the feeling of belongingness between employees, the strength of Procter & Gambles’ culture.

Every employee must attend the Disney orientation. This is for new members to be introduced to Disney traditions, philosophies, the organization and the way they do business. Disney also offers business training classes at Disney University, which must be applied for by organizations or groups.

Potential employees at any level of the organization must past at least 2 screenings, and must adhere to the strict grooming code implied by the organization.

Inside the training rooms, pictures of Walt Disney are shown to make the new employees feel like partners with the Park’s Founder. This is because of the strong culture Walt Disney built, one he described as “Father and Children”.

Disney Corporation

In the multi-day training for employees, they are introduced to the Disney language. Where each job is given a specific title:

• Employees are “cast member”.• Customers are “Guests”.• A job is a “part”• A uniform is a “costume”This specific language helps keep the organizational culture

centered around the magical sensation Walt had created. Their annual reports to shareholders had also been peppered with words such as “dreams”, “fun”, and “joy” to keep the feeling alive.

As for uniformity, Disney makes every employee have the same behavior and work conduct to preserve the magical feel.

No one except specific ‘cast members’(who were sworn to secrecy) can observe the training of characters at Disneyland.

Comparison CompaniesColgate• Placed emphasis on culture

built around Colgate family values.

• Not as “Tightness of fit” as P&G, no indoctrination or guiding principles to lead the employees.

• Colgate has come to see itself as the “Second to Procter” on a quest to become another P&G.

Columbia Pictures• Had no core ideology, or

core preservation methods. Columbia later ceased to exist as an independent company and was bought out.

Visionary Companies..

Tend to be cult-like around their ideologies, not charismatic cult leaders

Cultism around an individual personality is time telling; creating an environment that reinforces dedication to a core ideology is clock building.

The point: build an organization that preserves its core ideology in specific, concrete ways.

Visionary Companies..Visionary companies translate their ideologies into tangible

mechanisms, aligned to send a consistent set of reinforcing signals.

Cult-like cultures can be dangerous & limiting if not complemented with the other side of the yin yang: Preserve the Core, Stimulate Progress.

Cult-like cultures can enhance a company’s ability to pursue BHAGS.

Some of the most cult-like visionary companies have received accolades as being the best major corporations for women and minorities.

Message for leaders?

Companies seeking an “empowered” or decentralized work environment should first and foremost impose a tight ideology, screen and indoctrinate people into that ideology, eject the viruses (those that don’t fit), and give those who remain the tremendous responsibility that comes with membership in an elite organization.