A case study1 of a former company called Veridian shows that reputation and culture when treated as strategic resources can be critical for developing and maintaining a competitive edge. Yet culture can have its darker side, as we in the space business know all too well: culture was a contributing factor to both the Challenger2 and Columbia3 accidents. How is it that reputation and culture can be regarded as strategic resources, rather than as obstacles to overcome in strategy?
Veridian points the way. According to the CEO of Veridian, David Langstaff, the leadership team built a culture on values, promoting “why we choose to do the things we do.” By emphasizing values-based leadership, this strategy brought to the forefront the longer-term interests of Veridian’s customers, employees, suppliers, and shareholders. Such an approach does not arrive overnight or by decree. In the case of Veridian, it required time, nurturing and conscious cultivation by its leaders as the company evolved in pursuit of new business opportunities. From its roots as a company of former rocket scientists to a solutions business, Veridian’s leadership placed a premium on its value proposition and held true to it throughout its existence, even after numerous acquisitions and mergers. As a result, reputation and culture became a competitive advantage for Veridian.
Looking inside NASA, I’ll talk about one human spaceflight organization with a reputation and culture that is familiar to many: the Flight Operations Directorate (FOD), home of the astronaut corps, Mission Control, and the men and women who plan, train, and fly in NASA’s human spaceflight vehicles. FOD’s reputation is as a can-do organization, built upon the legacy of its Apollo forbearers such as Gene Kranz of Apollo 13 fame, and through the astronaut corps who are the rock stars of human spaceflight. The culture of FOD was built over fifty years, where the “steely-eyed” men and women of FOD dealt and lived daily with “numbers that can kill people.” To this day, each person in FOD recognizes that decisions – or lack thereof – can have ultimate consequences.
The Veridian example shows that such a reputation and culture developed over time and with careful nurturing by leadership can become a strategic resource that provides a competitive advantage, when it is built upon the foundation of “why we choose to do the things we do.” Likewise, any strategy for human spaceflight to be successful must recognize that reputation and culture can be a powerful strategic resource if treated properly. Such a treatment must resist the temptation to use reputation and culture as a justification to pursue business as usual, under the premise that “we’ve always been successful doing things the way we do.” Our own experiences in human spaceflight show the fallacy of that argument. The example of Veridian shows that the “why’s” rather than the “what’s” are critical to overcoming organizational inertia and providing a competitive advantage. A future human spaceflight strategy would be wise to heed that.
Next time: Walmart in China and the strategic impacts of cultural, administrative, geographic, and economic differences.
Previous entries in this series:
Part 1: The United States Postal Service and the Porter Five Forces
Part 2: Disney and the Resources Based View
Part 3: DARPA, Kodak, and Wiring Innovation
Part 4: The FBI and Transformational Change
1Elias, J., Khurana, R., & Poldony, J. (October 16, 2006). Veridian: Putting a Value on Values. HBS 9-406-028. Boston, MA: Harvard Business School.
2Vaughan, D. (1996). The Challenger Launch Decision: Risky Technology, Culture, and Deviance at NASA. Chicago: University of Chicago Press.
3Columbia Accident Investigation Board. (August 2003). Report Volume I. Washington, DC: Government Printing Office.