As a newly graduated social rookie, I often have exaggerated ideas about how things are accomplished, such as saving a company in crisis requiring a superhero or creating a great enterprise needing a magician. So when I read these cases in books, I am always amazed: is it really that simple? Upon careful consideration, they are both real and fundamental, so I want to share them with you.
"The Power of Habit" | Alcoa and Paul Henry O'Neill
In 1987, the financially struggling Alcoa, a company in the United States aluminum industry, welcomed their new CEO. When the shareholders expected him to promise new achievements and profits for the company, he instead said, "I want to make Alcoa a zero-injury company." All the shareholders were shocked.
Next, he took a series of actions: whenever an employee was injured, the division presidents had to report to him within 24 hours and provide a plan to ensure that accidents would not happen again; he allowed workers to call him anytime to report leaders who did not comply with safety regulations...
One year later, Alcoa achieved unprecedented profits, and when he retired, the net income of Alcoa was five times that when he took office.
Why did the new CEO focus only on safety accidents when he took office, but still achieved such a huge change?
A company with a long history and large scale will have numerous reasons when it falls into crisis. How can you reform it without arousing resistance from stubborn executives or angering lower-level employees? You can't just make everyone work seriously with just one word.
So O'Neill decided to focus on "safety" because no one would dare to oppose safety, which was his brilliance. From the results, the answer is that simple, focusing on safety. By creating a safe environment, the entire company will undergo many changes as a result.
So why does focusing on safety bring him such high profits? This case comes from "The Power of Habit". Focusing on safety is a habit, and for Alcoa, it is also a "core habit".
Habits are unconscious behaviors for everyone, like brushing teeth when waking up, exercising every week, driving on the right side, etc. They are your habits.
Habits also exist in organizations and companies. You can understand them as unwritten practices of the enterprise, or they can be extended into a kind of corporate culture.
By protecting workers, they need to understand the causes of accidents, production equipment, workers' working environment, and also need to introduce talents to teach workers the correct quality control and efficient production processes - the correct way of working is often a safer way of working. Since the division presidents have to report within 24 hours of an accident, each division must establish a new communication system so that the lowest-level employees can submit suggestions to management. The company's hierarchical system must also change... These are changes in Alcoa's corporate habits. When the core habit is established, it becomes the company's values.
Core habits, as described in the book, are habits that can leverage other habit changes. Compared to ordinary habits, they have more influence on reshaping business and lifestyles. Core habits can initiate a process and drive changes in other behavior patterns.
For example, when you have been trying to lose weight for a long time but can't succeed, maybe you have failed in the process of fighting against your dislike of exercise and eating green food. You can try approaching it from another angle - recording your diet. In 2009, American researchers gathered 1,600 people with obesity problems and asked them to record everything they ate at least one day a week. At first, it was difficult to maintain, as researchers either forgot to record or forgot to bring their notebooks. But slowly, they started to record more frequently, pay attention to their records, and develop this habit. They discovered behavior patterns they hadn't noticed before from their records and began planning their diets, replacing junk food with healthy snacks. Six months later, those who recorded their diets every day lost twice as much weight as others.
In fact, at the beginning, the researchers just asked them to record what they ate, but this habit created many new things for them.
In my understanding, core habits are different for everyone. The only way to find methods that can leverage your own core habits is to embrace an exploratory spirit and try various experiments. In this process, we may encounter obstacles and feel regret for not persisting or making changes, but it is through continuous learning and exploration that we can better understand how to find our own core habits. Practice and failure are necessary paths.
Finally, I want to talk more about Paul Henry O'Neill. I can't help but be curious about how he thought and found the key to saving Alcoa, and how he formulated a plan to make his vision a reality. Upon reviewing this book, I can find some clues:
Before Alcoa invited O'Neill to be the CEO, he had already made a lot of money. Before deciding whether to accept the position, he made a list and studied the factors that should be prioritized if he accepted the position. He is someone who likes to use lists to organize his life and life decisions. Whenever, he is making a list, recording the reasons for the success of some projects over others.
After leaving Alcoa, O'Neill served as the U.S. Secretary of the Treasury. During his tenure, he also focused on worker safety, creating job opportunities, and projects to alleviate poverty in Africa. However, because his ideas did not align with the president's, he was fired after two years - these pieces of information are interesting, and in the future, I may write a detailed profile about him, but I won't mention it here for now.