Friday Fact – Power of Keystone Habit

Do you know, Alcoa- Aluminum Company of America achieved 5 times of its profit within the span of 13 years just by using a keystone habit from Charles Duhigg.

In the year 1987, Alcoa hired a new CEO- Paul O’Neill as the company was facing loss from last year. When O’Neill was asked to address everyone present in the ballroom, he began by talking about the worker’s safety. This had put everyone under a huge confusion. Because, as a CEO, he was expected to speak about Synergy, Rightsizing, Alignment, Competition, etc. He said that the safety graph of his company has gone down. Although it is better than that of the general American workforce, he wanted to convert it into Zero Injuries.

Listening to this, people started commenting outrageous things about him. Remembering O’Neill’s stint in Washington from 1960’s someone said that he had done a lot of drugs. Even, people started to raise their hands in a desperate need to ask him questions on familiar grounds such as- Capital ratios and inventories and so on. And the only answer he gave was to understand Alcoa they need to look at workplace safety figures. He added by saying that workers have devoted themselves by creating a habit of excellence. And looking after their safety will be an indicator that they are making progress in their habits across the entire institutions. And that is how Alcoa should be judged.

Once the speech was over, many financial analysts called their clients and advise them to sell their stocks of Alcoa. And there were a lot of obligations waiting on his way of changing that one habit. But he did not give up. He worked on his lines of changing and after a year, the results were declared and the companies profit hit a record high. This helped the new CEO add more motivation for his investors and kept working on the same lines for the next 13 years. After 13 years, at the time of his retirement, when calculated, the companies profits were 5 times more than that of when he was hired.

When he was asked about his strategy, he said he knew he had to transform Alcoa but one can not order the people to change. so, he thought of one thing- disrupting one habit and it would change entire scenario of the company. He did this by using a keystone habit from Charles Duhigg that was to change one habit which will lead to change other habits which will end up bringing change for better.

At Faber, we help our clients by beginning to disrupt one habit at a time; which leads us to help them bring organizational transformation. Have you identified your next disruption yet?

Written & Compiled by Faber Priyal & Faber Mayuri

1 Comment
  • Reply Sundaram Varadan

    November 5, 2018, 2:02 am

    Dear Vishal,
    Your articles are always inspiring. I do agree one small disruption can change the whole organisation. Finding out that habit is the most crucial part of the change.

    Looking forward to your post.
    Seasons Greetings and warm wishes
    Sundaram Varadan

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