Julie Battilana
From Discourse to Action: The Role of Organizational Culture in Sustainable Product Development Inside a Large Company

1 00:00:03.510 --> 00:00:15.809 Julie Battilana: I'm delighted to speak with you today, alongside my coauthors Thijs Geradts and Marissa Kimsey say about our paper titled "From discourse to action: The role of organizational culture and sustainable product development inside a large company". 2 00:00:16.890 --> 00:00:23.910 Julie Battilana: In this video, we will briefly discuss our paper's framing, then we will present our core findings and briefly discuss their implications. 3 00:00:27.240 --> 00:00:39.510 Julie Battilana: Today, large companies are increasingly embracing, at least in discourse, a new corporate purpose centered on a renewed responsibility to stakeholders and society at large, not just shareholders. 4 00:00:39.900 --> 00:00:45.720 Julie Battilana: But shifting discourse does not automatically guarantee corresponding shifts in corporate actions, as we all know. 5 00:00:46.230 --> 00:00:57.000 Julie Battilana: Actually implementing this new corporate purpose in practice requires that companies develop sustainable products which benefit people end the planet, while generating profit. 6 00:00:57.780 --> 00:01:11.550 Julie Battilana: So what does it take for sustainable products to develop and launch inside a large company. Addressing these question is important if large companies are to be part of realizing the promise of corporate purpose. 7 00:01:13.980 --> 00:01:19.500 Julie Battilana: To explore this question, we focus on the role of organizational culture in sustainable product development. 8 00:01:20.070 --> 00:01:29.430 Julie Battilana: Implementing changes that diverge from institutionalized norms in large companies is especially challenging because such divergent changes break with the dominant culture. 9 00:01:30.180 --> 00:01:47.970 Julie Battilana: We conceptualize organizational culture as a set of values and norms that guide individuals and constrain them within organizations. Research suggests that sustainable products are prone to facing cultural clashes, because they diverge from taken for granted norms in typical companies. 10 00:01:49.080 --> 00:01:59.580 Julie Battilana: Through the lens of culture we thus shed light on how cultural clashes can undermine sustainable product development and how these clashes can be overcome at a large company. 11 00:02:01.050 --> 00:02:11.280 Julie Battilana: So here we are just repeating it again. When it comes to our research question what we want to understand is the development of sustainable products in large companies. 12 00:02:11.550 --> 00:02:25.140 Julie Battilana: And so the question that we have back is: How can sustainable products develop and launch inside a large company in the face of intense resistance that's such a cultural change is likely to trigger? That's our core research question. 13 00:02:27.510 --> 00:02:40.680 Thijs Geradts: All right. So let me talk you through the methods here to actually answer that research questions. So basically we conducted a multiple case study inside FMCG CORP, which is basically not the real name of the company. We had to make this anonymous. 14 00:02:41.940 --> 00:02:51.870 Thijs Geradts: It's one of the largest FMCG companies (fast-moving consumer companies) in the world. That's what we can tell you. And within this company we basically looked at four case studies, four products. 15 00:02:52.440 --> 00:03:06.660 Thijs Geradts: At the base of the pyramid, basically 4 billion people living on less than $5 a day, which is the focus point of this product development inside one division of this FMCG, the home care division. 16 00:03:07.440 --> 00:03:15.870 Thijs Geradts: So when looking at the data basically we use 52 interviews actually to gather the data and also some archival 17 00:03:17.130 --> 00:03:29.370 Thijs Geradts: Material. So looking at the products- we call them MOSQUITO, WATER, TOILET, and LAUNDRY. So the MOSQUITO venture is basically a bed net, as an easy to use bed net so that can sleep 18 00:03:30.450 --> 00:03:40.410 Thijs Geradts: Without suffering from diseases. Then WATER is basically clean water from boreholes with retail kiosks in rural areas. And there is the TOILET product 19 00:03:40.770 --> 00:03:42.600 Thijs Geradts: Which is a service model where you can 20 00:03:43.110 --> 00:03:54.930 Thijs Geradts: Have access to clean sanitation inside your own home. And then there is a LAUNRDY adventure which is basically an end product which is basically a solar powered portable laundry washer. So those other core. 21 00:03:56.010 --> 00:04:03.000 Thijs Geradts: Products that we studied and they all address problems at the base of the pyramid, economic base of the pyramid. So 22 00:04:04.500 --> 00:04:08.100 Thijs Geradts: This is basically the slide which we previously also looked at 23 00:04:10.530 --> 00:04:11.850 Thijs Geradts: Then the findings. 24 00:04:13.050 --> 00:04:29.970 Thijs Geradts: So, looking at the products, what we find is that two of these products actually managed to develop inside the FMCG and two didn't. So the two that didn't actually denote failure, but not in the sense that they're bad products, but in the sense that they just couldn't develop internally. 25 00:04:31.350 --> 00:04:37.050 Thijs Geradts: Interesting enough, we see that actually these products managed to develop outside the firm in independent companies but 26 00:04:37.680 --> 00:04:46.260 Thijs Geradts: There's only two products that actually made it that could develop internally. And what we find is that, basically, this was all due to cultural work or purpose. So 27 00:04:46.650 --> 00:04:52.140 Thijs Geradts: That's also the differentiating factor here that we find between the failure cases and the success cases 28 00:04:52.500 --> 00:05:01.110 Thijs Geradts: And by culture work basically we mean the efforts of organizational members to shape organizational culture, here as part of divergent cultural change 29 00:05:01.980 --> 00:05:13.500 Thijs Geradts: And also what we find is basically that this cultural work for purpose involves three phases: so cultural framing, cultural anchoring, and cultural buffering. Now we're going to guide you through what that exactly means. 30 00:05:15.870 --> 00:05:19.410 Marissa Kimsey: So this table summarizes our model in more detail. 31 00:05:19.770 --> 00:05:29.460 Marissa Kimsey: And I'll go phase by phase. So phase one: We suggest that cultural framing for purpose reconceives the meaning of product development for the product team. 32 00:05:29.760 --> 00:05:35.790 Marissa Kimsey: So we have the actions of the senior manager identifying a specific societal problem for business case exploration. 33 00:05:36.120 --> 00:05:49.050 Marissa Kimsey: And, in turn, in middle managers building the business case for addressing that societal problem. And the result of this phase of cultural framing what we find is cultural acceptance by the products team to the specific societal problem is identified. 34 00:05:49.830 --> 00:05:58.980 Marissa Kimsey: So that's framing. Then phase two we talk about is cultural buffering for purpose, which we say reshapes the norms for product development inside the product team. 35 00:05:59.220 --> 00:06:12.420 Marissa Kimsey: So we have a senior manager reshaping the innovation process and performance metrics and middle managers then being able to experiment a novel ways to develop a sustainable product. So here are the result of buffering is cultural acceptance by the 36 00:06:13.290 --> 00:06:22.140 Marissa Kimsey: Sorry, is the cultural island for the product team, where the sustainable product developed internally. And then our phase three, our final phase, is anchoring. 37 00:06:22.830 --> 00:06:33.780 Marissa Kimsey: which integrates the sustainable product inside the wider organization, with a senior manager convincing, like, the other decision makers, here the division board members and the heads of country organizations 38 00:06:34.020 --> 00:06:41.670 Marissa Kimsey: Of the value of the sustainable product and the middle managers, then, validating the business case for that product. And the outcome of this phase 39 00:06:42.240 --> 00:06:47.160 Marissa Kimsey: Is cultural acceptance by the wider organization, where we have a sustainable product launching internally. 40 00:06:48.060 --> 00:07:06.540 Marissa Kimsey: And if we go next we can see how this model then maps to our cases. So we have in the two success cases we observe the strong enactment of cultural framing, buffering, and anchoring by managers in these cases, in contrast to their mixed enactment in our failure cases, TOILET and LAUNDRY. 41 00:07:14.460 --> 00:07:17.370 Marissa Kimsey: And finally, I'll mention the implications 42 00:07:18.660 --> 00:07:27.210 Marissa Kimsey: For theory and practice. We, on the research side, we're demonstrating how organizational culture matters for the enactment of corporate purpose 43 00:07:27.540 --> 00:07:34.320 Marissa Kimsey: Where cultural work for purpose is both cognitive and material, occurs both within the product team and in the wider organization 44 00:07:34.740 --> 00:07:40.470 Marissa Kimsey: And involves collective and concerted effort for change leadership involving both senior and middle managers. 45 00:07:41.220 --> 00:07:53.100 Marissa Kimsey: WE are also calling attention to the highly political nature of cultural work. And we're also echoing and shedding light on the importance of alternating existing norms and structures within an organization to be able to walk the talk of purpose. 46 00:07:54.990 --> 00:08:03.570 Marissa Kimsey: So that's it. This is the end. And we just want to thank you for watching. And we look forward to any feedback you may have for us to strengthen our draft.