Initiating a Values Based Culture at Track-Type Tractors Division of Caterpillar Inc. 1999-01-0250

During the early 1990s, the Track-Type Tractors Division (TTTD) of Caterpillar Inc. experienced several challenges. The Division faced increasing global competition in the midst of an economic recession. Although intense plant modernization and reorganization occurred in the five previous years, the business unit was not profitable. In 1993, Track-Type Tractors Division instituted its solution -- a change in its culture.

Previously, the culture hindered the division’s ability to move forward. This was revealed in a 1992 review detailing the major obstacles inhibiting management from achieving divisional goals. The division leaders recognized that a change in business philosophy, as opposed to further plant modernization, was required to achieve production goals and stay globally competitive. The review identified nine basic values needed to overcome the majority of the obstacles: Trust, Mutual Respect, Teamwork, Empowerment, Risk Taking, Sense of Urgency, Commitment, Continuous Improvement and Customer Satisfaction. All nine of these values/operating principles were then joined under one heading as “Our Common Values” and introduced to the entire Division in 1993. The objective of Our Common Values was to return the Division to profitability exceeding any previous levels of performance.

Although it is expected to take eleven years for the newly defined culture to fully evolve, the impact of the Common Values has exceeded expectations in its five years of existence. Effectiveness of Our Common Values is measured by both business results and employee satisfaction surveys. Since 1993, the Division has experienced dramatic increases in both areas.