Kellogg Magazine  |  Fall/Winter 2015






It seems absurd that multibillion-dollar organizations could struggle and even fail by embracing the same values and beliefs that drove their success. But the strong culture necessary to succeed can blind an organization when things go wrong.

The problem is that on a personal level, abandoning values is no longer accurate… it’s very understandably a frightening realization.

James Farley/Booz Allen Hamilton Professor of Marketing Strategy and faculty director of the Kellogg Markets and Customers Initiative (KMCI)
And as companies adjust and reinvent themselves, ignoring the need for culture change can stall a turnaround in its infancy.

That is the one of the many hard-earned lessons found in Resurgence: The Four Stages of Market-Focused Reinvention, co-authored by Gregory Carpenter, faculty director for the Kellogg Markets and Customers Initiative (KMCI) and the James Farley/Booz Allen Hamilton Professor of Marketing Strategy, with Gary Gebhardt ’05 and former Kellogg professor John Sherry Jr.

“An organization develops its culture based on shared lessons from the past,” Carpenter says, “and the more successful [the organization], the more deeply held are the values and beliefs that define a culture.”

When a market environment changes, however, many of those values suddenly stop producing successful results. And when they do, organizations are faced with what seems like an impossible choice: abandon their beliefs and values and embrace new, untested ones, or fade away.



areas of expertise:
Brand management, consumer products and behavior, marketing management, strategy, planning and policy

  • Current research focuses on understanding how firms create competitive advantage through marketing strategy, how firms become more customer focused, regain advantage and renew success.
  • Director of the Center for Market Leadership, corporate advisor and co-author of Resurgence: The Four Stages of Market-Focused Reinvention.
“The problem is that on a personal level,” Carpenter says, “abandoning values is a recognition that your understanding of the world is no longer accurate. In a human sense, it’s very understandably a frightening realization.”

The book proposes four stages of resurgence: recognize, reinvent, formalize and maintain. With each step, the organization transforms its culture to be more focused on customers, more open, more agile.

But, of course, resurgence is not guaranteed.

Telecommunications company Motorola is one of the organizations the authors studied. A pioneer in wireless communication technology, Motorola thought its 80 percent market share, supported by its engineering power, was unassailable.

By the late 1990s, however, rivals had eaten away at that gain. Even then, it took five years for the precariousness of Motorola’s position to sink in.

In that situation, according to Resurgence, “The company is left with a set of norms and behaviors that not only fail to serve the market but can also be a liability.”

Perhaps most difficult to understand is that sustained reinvention is antithetical to doubling down on what worked in the past. Organizational values that no longer reflect the reality of the market will not start working again simply because a company wills it.

Harley-Davidson, one of Resurgence’s success cases, realigned its marketing and production efforts to appeal to a new generation of motorcyclists; now, they’re the No. 1 brand among bikers under 35.

“The more successful [organizations] adapt,’” Carpenter says. “They evolve with their environment.”

But sustained reinvention is difficult to achieve, as Motorola has found. At the core of any effort is constant “refreshing” of market understanding until the organization anticipates or even drives change, as it once did.

Then, Carpenter says, “Change becomes part of what you do. Change becomes natural, and it’s not traumatic at all.”