ZAG: The Number-One Strategy of High-Performance Brands

How Structure Becomes Stricture

A business is a cultural organism. It grows and develops by creating processes and embracing values that formalize what generated past successes, so that employees can work more autonomously. These form the mental models, the organizational rules, that define a company’s culture.

But when mental models go unquestioned, the culture stiffens. The company finds it increasingly difficult to react to challenges that don’t fit its worldview. This is what Lou Gerstner found when he took over IBM in the 1990s: “Successful institutions almost always develop strong cultures that reinforce those elements that make the institution great. In fact, this becomes an enormous impediment to the institution’s ability to adapt.”