1. Building a high performance business culture: The JetBlue Story
Daniel Denison
David J Barger
November 24, 2016

2. Why culture is so important

3. True confessions…
It’s about culture. I could leave our strategy on an aeroplane seat and have a competitor read it and it would not make any difference John Stumpf, CEO, Wells Fargo

4. Culture reflects the lessons over time
Visible Symbols
Lessons
Survival
Culture
Underlying Principles

5. Rituals, Habits, and Routines
We must  make  automatic  and  habitual  ... as many useful actions as we can.
The more of the details of our daily life we can hand over to the effortless custody of automation, the more our higher powers of mind will be set free for their proper work.
William James

6. Changing Culture By Changing Rituals, Habits & Routines
Good
Bad
Preserve
&
Strengthen
Invent
Perfect
Unlearn
Leave Behind
Rethink
Try Again
Old New

7. Identifying keystone habits

8. The change process
Why is culture important to the performance of the business?
Are the changes working the way we want?
How can we best develop the culture?
What is the implementation plan?
What is the
current state?
What are the
priorities for action?
How do we create common understanding?

9. Overview of the model ADAPTABILITY
Pattern, Trends, & Market
MISSION Direction, Purpose, & Blueprint
Are we listening to the marketplace?
Translate the demands of the environment into action
Do we know where we are going?
Define a meaningful long-term direction
INVOLVEMENT Commitment, Ownership, & Responsibility
CONSISTENCY Systems, Structures, & Processes
Are our people aligned and engaged?
Build human capability, ownership, and responsibility
Does our system create leverage?
Define the values & systems, the basis of a strong culture

10. 100 Year Old Mfg. Company “We’re a team, going down together”
First in industry, but declining
Trying to hold on to the past
1st time in 20 years failed to meet targets
Targeted by competitors
President operationally focused
“We’re a team,
going down together”

11. Linking Culture and Performance
Higher culture scores translate to better value creation and return
Bottom 30 Companies
Top 30 Companies
EBITDA Growth
*Six portfolio organizations were excluded based on outliers in EBITDA growth. One portfolio was in the middle of the top/bottom breakout.
EBITDA Outliers
Contessa – (-11655%) [Sold]
Wabash – 1009% [Sold]
Trulite – 628%
Aclara – 344%
Dreams – 294%
BTX Group – 240%
-1%
17%
Sales Growth
-4% 6%

12. Culture and Performance

13. When is High Consistency Bad?
When Involvement is low, high Consistency will likely lower an organization’s performance.
When can high Consistency be detrimental to an organization?
Keep in mind that high consistency is an organization’s ability to repeat an action or practice over and over with little to no variation.
Research shows that high Consistency can negatively impact an organization’s MtB ratio when Involvement is low.
Notes:
From a sample of 137 publicly traded organizations.
The MtB ratio was calculated from financial information in Standard & Poor’s Compustat database.

14. The main event
The Story

25. Discussion
Thank You!