This story is exceptionally well told in the book Breakthroughs! by P. Ranganath Nayak and John M. Ketteringham (one of the best casebooks written on innovators who defied the odds), which describes Smith’s culture of mutual commitment as the true breakthrough.

To answer the second question, you can’t implement any of what we’ve taught in this book unless Rockefeller Habit #1 — “The executive team is healthy and aligned” — exists. The order in which you implement the other habits doesn’t matter.

Lessons for Leaders to Live By:

1. Focus on the Journey, Not the Destination

“The journey is the reward” is ancient Chinese wisdom that, thanks perhaps to Steve Jobs’s affection for it, you’ve probably heard before...

2. Link Little Things to Big Things...

3. Put “Grease People” and “Gunk People” in the Right Places ...

Even if your organization is well designed in other ways, friction problems will fester and flare up if the right people aren’t in the right roles. To avert such troubles, skilled leaders work to put “grease people” in places where friction ought to be low and “gunk people” in places where friction ought to be high. Research on personality and culture reveal differences in responses to rules, risk, and monitoring that can help you figure out where people (including you) fall on our grease-gunk continuum:

Grease People

Gunk People

Rules: “Unbureaucratic personalities” or “Chaos Muppets” who ignore, bend, defy, and remove rules, norms, and traditions.

Rules: “Bureaucratic personalities” or “Order Muppets” who follow, create, and enforce rules, norms, and traditions.

Risk: Comfortable with taking chances, focus on the upside of trying new things. Encourage others to take risky actions.

Risk: Uncomfortable with taking chances, focus on what can go wrong, hesitate to try new things. Discourage others from taking risky actions.

Monitoring: Scrutinize others lightly. Quick to trust others and assume good intent. Downplay and encourage errors, setbacks, and rule breaking.

Monitoring: Scrutinize others closely. Wary about trusting others and assume bad intent. Call out and punish errors, setbacks, and rule breaking.

So, if your organization is plagued by vigilantes who make you jump through hoops akin to “Say, ‘I am filthy,’ five times” consider how they are treated. Are they ignored or underappreciated? If so, firing them isn’t the answer; their replacements will probably act the same way. Try what Larry’s boss did and show them some respect...

4. The Best Friction Fixers Are Friction Shifters...

Leading friction shifting in your team or organization also requires sending clear signals that it’s time for more or less friction, making sure your intentions are understood and shape behavior. You may believe that others hear your message, but as chapter 4 shows, people, especially those with a lot of power, often have a dim understanding of how others interpret and respond to their decisions, orders, and suggestions. Organizations muddy the waters further by pummeling people with confusing, conflicting, and excessive information—making it tough to distinguish “signal” from “noise.” That means, to trigger friction shifting, a leader’s job is to craft simple and crisp signals that it’s time to work in grease or gunk mode...

Paul told us, when you take charge of a troubled company, “you have to assess the situation rather than act quickly. Everyone wants you to do something, so the first thing you say, very calmly, is, ‘We’re not going to do anything today.’” During his first months on the job, Paul hit the brakes and asked “each of the top eighty people in the company to write a two-page document that answered, first, ‘Who are you? What are you responsible for?’ And then: ‘What issues do you believe are most pressing? What would you do if you were me?’” After speaking to all eighty and figuring out what was broken, who the best (and worst) people were, and what was required to fix BHP, Paul let his charges know that it was time to shift gears and start those changes, which, in just a few years, turned the company around...

5. Friction Fixing Is Fueled by Civility, Caring, and Love

A related leadership lesson we’ve implied is that friction fixing is accelerated by shared civility, caring, and love. When such emotions pervade an organization, people form stronger bonds, develop trust, focus on the best qualities of colleagues and customers, and devote more energy to helping others and less to satisfying their selfish needs. Civility, caring, and love reflect a rough hierarchy of collective compassion. As Christine Porath documents in Mastering Civility, when organizations are plagued with rudeness, it causes employee commitment, cooperation, and coordination to plummet...

As Peter Drucker said, “It is a law of nature that two moving bodies in contact with each other create friction.” But civility can help bring out the best in people because, as Drucker put it, “manners are the lubricating oil of an organization.” When employees—and the customers and citizens they serve—treat one another with outward respect, it helps everyone avoid open warfare and backstabbing, resolve (or at least tolerate) tensions, and be more amenable to collaboration. Christine’s research confirms that when civility is pervasive, employees get more done; they go the extra mile to help others and enjoy better physical and mental health. Christine dissects how leaders build civil cultures by modeling desired behaviors, hiring, rewarding, and promoting people for civility, and developing programs that spread respectful actions. She shows how seemingly small interventions pack a wallop. Like the upswing in civility at Ochsner Health in Louisiana. It was sparked partly by the “Ochsner 10/5 way,” which means if an employee is within ten feet of a colleague or patient, the employee is expected to make eye contact and smile. And to say hello if the employee is within five feet. Every organization (and family) would be more civil if we all followed Christine’s advice when we encounter a difficult person: “Before shutting down, saying no, or displaying frustration, try to appreciate where the other person is. You might even go one step further and ask yourself, How can I help them?” Caring is a more powerful form of collective compassion than civility. It entails deeper empathy and concern than surface civil behavior. In caring cultures, people feel obligated to help others avoid and overcome obstacles —they expect one another to take that extra step Christine suggested.

I came to see, in my time at IBM, that culture isn’t just one aspect of the game—it is the game. In the end, an organization is nothing more than the collective capacity of its people to create value. Vision, strategy, marketing, financial management—any management system, in fact—can set you on the right path and can carry you for a while. But no enterprise—whether in business, government, education, health care, or any area of human endeavor—will succeed over the long haul if those elements aren’t part of its DNA.

“Consistency: Walk the Walk

One of our favorite management books that got far too little attention was Management Lessons from Mayo Clinic. It's a magnificent chronicle of how one of the best hospitals in the world delivers excellence by putting patients first and innovating around the still-revolutionary notion of team-based medicine. The book also speaks to the leadership philosophy of former CEO Glenn Forbes. Forbes fiercely protected and grew the Mayo Clinic's culture of excellence. And he summed up the challenge this way: "If you've just communicated a value but you haven't driven it into the operations, into the policy, into the decision making, into the allocation of resources, and ultimately into the culture of the organization, then it’s just words.