Does Organization Culture Really Matter?

What Henry Ford Teaches us about Corporate Culture.  Henry Ford & Model T

For most of us today, asking if organization culture matter seems like a ridiculous question. Executives openly ask if the company culture is right to meet their goals. Hiring managers ponder whether or not an interviewee will fit their culture. Merger and acquisition analysts spend countless hours looking at how a new purchase will affect the corporate culture. A Google search on “organizational culture” results in over 12 million hits. Type in “corporate culture” and 48 million will pop up.

…organization culture first appeared in print in 1979 in an academic paper studying a British boarding school.

But the fact is, the term “organization culture” first appeared in print in 1979 in an academic paper studying a British boarding school. So, Andrew Carnegie, Henry Ford, J.P. Morgan and John D. Rockefeller built the world’s largest companies without ever hearing that phrase. It’s probably a safe bet to say they never spent time agonizing with their board members about the company culture. So, why are we?  Perhaps they knew something intuitively it took us over a hundred years to figure out.

In 1908, Henry Ford was determined to build a simple, reliable and affordable automobile. His goal was to create a car the average American worker could buy. Now, Ford didn’t invent the car. His innovation was to build his new Model T on an assembly line to lower cost. But, he didn’t invent the assembly line either.

What Ford did was clearly communicate his mission and vision to his employees. Each line worker could see how their job contributed to making an affordable car and watch them roll off the factory floor. Within four years, his people had gotten so good at perfecting his vision, he could drop the price of a car by a third from $875 to $575. Ford then demonstrated the value of their contributions by rewarding his employees with the first 40-hour work week and raising their pay to nearly twice the hourly rate of the average American worker at the time.

Assembly Line Model T

Henry Ford’s simple idea gave his employees a shared vision and purpose. They were all committed to making the world a better place by building a car anyone could own. The idea of an affordable car was so inspiring they improved the assembly line making the Model T even more affordable. They were, in turn, rewarded with a shorter work week and more pay which quickly made Ford Motor Company one of the best places to work in the country further reinforcing their belief in their purpose.

So, while Mr. Ford may have never heard the phrase “organizational culture”, he obviously knew something about the power of a shared vision and the motivational impact of a common purpose.  These are the very elements at the heart of a corporate culture. Employees can achieve incredible results when they’re inspired to action. Inspiration comes from clearly seeing how your company changes the world and understanding how your individual efforts make a difference.  A century after first telling his employees they were going to build a car anyone could buy; Ford is still one of the best known and largest companies on the planet.  The simple vision Henry Ford shared with the line workers in his factory literally reshaped the American landscape. Today, there are nearly 4,000,000 miles of paved roads in the US that never existed when the folks at Ford were just trying to make a simple, affordable car.  That’s the world-changing power of a shared vision and purpose in creating an inspiring organization culture.

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