Building a Self-Sustaining System for Culture Improvement

The Challenge

Our client is a European-based industrial distribution company. With over 2,000 team members across 13 countries and 11 different languages spoken, addressing organizational culture is no small feat. The company was implementing new strategic pillars and the company’s current culture wasn’t helping to enable their new strategy. We were brought in to improve the culture of the organization as part of one of those strategic pillars.

Culture is omnipresent and foundational to any business’s success. There is considerable research documenting how a company’s culture is closely linked to its effectiveness (Denison et al.), customer satisfaction (Gillespie et al.), sales growth, profitability, quality, and employee satisfaction (Sackmann). Culture impacts recruiting, interviewing, hiring, onboarding, engagement, retention, routines, communications, and much more. It drives business performance and enables or inhibits strategy. Culture is also dynamic, changeable, and elements of it are measurable, which helps us address a company’s cultural strengths and areas for improvement.

It is sr4’s firm belief that culture is the responsibility of everyone at a company. This challenge is one of developing a thriving culture — thriving cultures enable improved engagement and organizational performance.

The Engagement

We immediately dove into the culture kaizen process. Kaizen is a Japanese philosophy of continuous improvement or healthy changes to a business. A culture kaizen is the cyclical process of assessing, analyzing, and addressing an organization’s collection of habits, routines, and practices. We go through five steps in the cycle: survey, share, invite, train, improve. We’ll briefly explain what each of these steps looked like with this client.

Survey

We invited everyone at the company to take the Denison Organizational Culture Survey (DOCS). DOCS measures the cultural factors that lead to an organization’s effectiveness and financial performance. The model highlights four key traits that create an organization’s culture: mission, adaptability, involvement, and consistency. The results of the company-wide survey let us know that they had plenty of opportunities to improve key facets of their culture, especially in the areas of customer focus and team member capability development.

Share

We trained groups within the company to share the survey results with their colleagues, primarily through small, interactive workshops. In these workshops, there was total transparency on the survey results — the good, the bad, and the ugly.

Invite

Our next step was to invite employees to form culture improvement teams and submit ideas to address issues concerning the company’s culture. In this step, we encouraged employees to think about localized actions and solutions. Too often, when people think about improving culture, they focus on the executive team. But at sr4, we know that culture is about everyone at an organization.

Under our guidance, teams brainstormed ideas that they could implement, rather than ideas that focused on changes at the highest level of the company. We encouraged people to submit ideas ranging from the mundane to the ambitious — the goal was not to have a highly developed plan at this point, but instead something that excited them and that they thought would improve the company’s culture. We published all of the submitted ideas and let team members vote on the best ideas.

Train

We brought the teams with the top ideas from each country together for a three-day summit. The goal was to explore the company’s culture and possible actions to address shortfalls. Importantly, this was not a meeting of company leaders. This was a gathering of team members from all different levels of the company who had shown enthusiasm for the overall goal of improving the company’s culture.

Improve

We led the teams in three days of sharpening their ideas into workable blueprints: how much will their idea cost to implement, what resources will it take, the expected outcome, and more. We identified in-house coaches and leaders to be teachers and held faculty workshops for team members on a range of topics. We used a familiar and easy-to-learn methodology to help team members transform their original idea into a 100-day culture improvement plan.

The Results

Thirteen teams workshopped their ideas and seven of those were implemented in the first year that we led them through this process. We assisted the company in doing the culture kaizen cycle two more times and by the third year, 100% of the projects were being implemented. The ideas were more refined, the coaches were improved, and the faculty was better prepared. Most importantly, team members now understood how to make improvements to the company’s culture themselves.

Throughout this whole undertaking, the most important outcome was not the ideas that came from the process — the most important part was the involvement and engagement of everyone at the company.

We put in place a lot of scaffolding to teach the company’s team members this process of culture improvement. We taught them how to form small teams, enlist a coach, refine their ideas, and make an actionable 100-day culture improvement plan. And after three years, we took the scaffolding away and they had a sturdy and reliable process in place and no longer needed our guidance.

 The positive effects of the culture improvement were not merely anecdotal. From 2014 to 2019, the company saw measurable improvements, including:

• Revenue grew by nearly 40M €

• Operating expenses fell by over 30M €

• Operating earnings grew by over 25M €

What’s more, based on yearly DOCS surveys, we saw improvements across the board, with significant improvements in the realms of team orientation, empowerment, and capability development. Overall, the company’s culture transformed to be more adaptable and agile, while not losing stability.

The sr4 Insight

We believe that the way to meaningfully improve a company’s culture is to bring everyone to the table and give them ownership of the problem. Culture improvement is not a memo from leadership or the implementation of a new top-down rule. Worthwhile culture improvement exists in the process. By leading them through the culture improvement exercise, we helped create a self-sustaining system for the company to continuously reflect on and improve their culture.

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Sources

Denison, D. R., & Mishra, A. K. (1995). Toward a Theory of Organizational Culture and Effectiveness. Organization Science, 6(2), 204–223. https://doi.org/10.1287/orsc.6.2.204

Gillespie, M. A., Denison, D. R., Haaland, S., Smerek, R., & Neale, W. S. (2008). Linking organizational culture and customer satisfaction: Results from two companies in different industries. European Journal of Work and Organizational Psychology, 17(1), 112–132. https://doi.org/10.1080/13594320701560820

Sackmann, S.A. (2000). Culture and Performance. In Ashkanasy, N. M., Wilderom, C. P. M., & Peterson, M. F. (2000). Handbook of Organizational Culture and Climate (188-224). SAGE Publications.