Why transformation is a function of culture not process

With €13 billion in annual revenue, the Turkish white goods business Arçelik has grown into a global white goods behemoth. But how do you align 55,000 employees across 58 countries, 22 brands, and 46 production facilities behind a single strategic vision?

What CEO Hakan Bulgurlu found was commercial ambition was not enough. What was needed was an inspiring story of change. But telling that story had remarkable and unforeseen consequences.

A simple decision of morality

Hakan Bulgurlu is a remarkable man.  CEO of a globally successful brand. But also a climber and Antarctic explorer. As Hakan told me, experiencing the world most fragile environment persuaded him of the urgent need to address climate change. And his realisation that Arcelik’s Scope 1-3 emissions, at approximately 26.6 million tCO2e, was almost equivalent to that of Sweden meant that “decarbonization was a simple decision of morality.”

That choice led Arcelik to unite the global business behind a single driving ambition: to “Inspire Sustainable Lives in Every Home.” Far from being just a slogan, this purpose has become the heartbeat of Arçelik’s business, shaping how it operates, innovates, and grows.

But what Hakan learnt is that a clear purpose or mission is not enough. Aligning and engaging the passions and energy of the whole organisation is driven not by a statement of ‘purpose’ - that creates direction - but by culture embedded in the company’s Values – because that creates momentum.

For Arcelik, authentically and consistently driving their values of openness, transparency, respect, and compassion allowed people to feel safe, and those of accountability and responsibility empowered inspired them to action.   By empowering employees at every level to act with confidence, Arçelik has built a culture where sustainability is not a top-down mandate, but a collective movement.

Not only a profound cultural transformation but also surprising commercial impact

What Arçelik did not anticipate, Hakan says, is the scale of the transformation that decision would unleash. “Wherever you look, there’s benefit. Transformation is no longer driven by [the Executive Committee]; it’s driven by engineers, hourly-rate wage operators, who are working in our assembly plants, coming up with new ideas. [For example], something I wouldn’t think of in a hundred years. All of our assembly lines are pneumatic—they work with air pressure, which uses power. And this worker, with no degree, had an idea [that led us to save] about 50% of the power that the compressors are using. I mean, it’s huge. That’s incredible. Incredible.”

Why did this employee act now, when for years he had been aware of the issue but done nothing?

Shareholder value may not galvanise an employee to excellence. Saving the planet will.

The answer lies in Arçelik’s ability to create an inspiring and emotionally meaningful cause - one that transcends the company’s immediate financial goals and invites every employee to be part of something larger. The transformation is powered by a unique blend of intrinsic motivation (“this matters to me”) delivered in a culture of psychological safety (“I feel safe to act”) and agency (“it feels like it is mine”).

The Contexis Performance Culture Index® measures and explains, amongst dozens of key drivers of organisational performance, levels of ‘affective commitment’. That is an employee’s perceived emotional attachment to their organization. This commitment is around 35% higher amongst employees who feel positive clarity and connection to an organization’s mission, over an employee who feels only moderate connection. It is that commitment that is playing out in the kind of actions of the Arcelik line worker described by Hakan.

This powerful combination of purpose and empowerment drives measurable business results. For Arcelik that is measured in energy efficiency innovations, circular design initiatives, and sustainable production processes that have not only reduced Arçelik’s environmental footprint but have also enhanced its profitability and resilience in a rapidly shifting global market.

For example, the business makes well over 1 million washer dryer drums per year. Engineers had always believed the extreme pressures required specialist virgin plastics. But committing to the ethos of Inspiring Sustainable Lives meant challenging this assumption. The company’s engineers found a way to manufacture from recycled PET. Each new machine now uses 60 plastic bottles, meaning around 13 million bottles were recycled last year. Production will increase to 400,000 units meaning that 25 million bottles will be recycled every year. This meets Arcelik’s goals by diverting tonnes of plastic from landfill and saving nearly 900 Tonnes of CO2 per year. But it also saves over 20,000 Gigajoules of electricity annually, which represents a significant cost saving in addition to the use of cheaper raw materials.

What I learnt from my time with Hakan Bulgurlu is a powerful lesson that can be transferred to any organisation.  That value creation is a function of aligning and inspiring the talents that sit within our businesses. And that requires a powerful story of change. And one that is authentically delivered in all of the actions if the business.  But that is not enough. True transformation and growth is a function of culture. People must feel not just inspired but safe to act. And empowered and responsible for change.

At Arçelik, sustainability is no longer a department or a project—it’s a shared mindset. And in that lies the company’s greatest competitive advantage: a culture where doing what’s right for the planet also turns out to be what’s best for the business.

John Rosing sat down with Hakan Bulgurlu as part of the Leaders on Purpose CEO Study 2024 “Purpose in Action: Leading Business Change in a Volatile World.” The full Report can be downloaded at https://www.leadersonpurpose.com/2024-ceo-study