Most leaders have heard the expression, “You need to drive your culture or it will drive your business—for better or worse.” In reality, putting these words into action to achieve real cultural change with sustainable, measurable results is a long-term journey. The payoff is huge. With vision, focus, and investment in the right culture experts, diagnostics, and change processes, a Constructive culture can drive significant business performance.
This was clearly demonstrated at the recent 3rd Annual Ultimate Culture Conference hosted by Human Synergistics in an experiential workshop, Culture as an Accelerator to Performance, which included a fascinating case study of a five-year journey to a ‘blue’ Constructive culture at the Canadian grocery and drug store giant, Loblaw Companies Limited.
Mike Marino, President and CEO (ret. 2018) of culture-shaping firm Senn Delaney, a division of Heidrick Consulting, kicked off the workshop using a discussion tool called The Culture Continuum. The Culture Continuum, detailed below, describes six levels or stages of culture maturity, and the actions, behaviors, and thinking that typically show up at each level. To stimulate group discussion in the workshop, Marino briefly described each level while asking participants to imagine the workplace culture of their own organization and determine where it lies on the continuum. Participants came away with a deeper understanding of culture to help them engage in strategic discussions with executive teams on how to begin to evolve their culture.
Beyond culture as a concept, participants also learned about how a Constructive culture can be developed. Mark Wilson, Loblaw Executive Vice President, Human Resources and Labor Relations, described the five-year strategic framework to change culture and climate using an integrated approach based on Senn Delaney’s culture-shaping methodology and Human Synergistics’ culture and leadership assessments. These diagnostics help members of organizations understand shared behavioral norms and support their individual development programs. The case study, detailed below, illustrates how this combined approach transformed the Loblaw culture with an impressive return on investment tied to improved business results and increased engagement.
Understanding where your culture is on the ‘Culture Continuum’
Over its 40 years of work helping companies shape their cultures, Senn Delaney has found that many companies suffer from an insider view of their workplace culture based on long-held beliefs and assumptions. Without an objective understanding of their culture’s real behaviors and norms, leaders would get stuck attempting to change the culture due to the absence of a clear path to sustained, measurable transformation based on objective data.
As you read the descriptions below, drawn from the article, Find Your Place on the Culture Continuum, think about where your organization fits.1 You can begin to identify areas of strength, challenges thwarting performance, where the culture could progress, and how the culture could be a game changer that enables competitive advantage, synergy, cost savings, strategic execution, innovation, and business performance.
Complacent (level 0): We’re content with how things get done
How a complacent culture shows up: Leaders are content with how things are done. They may have a completely unrealistic view of the actual culture, or lack of awareness of the culture. Culture is never a factor in strategic discussion. There’s no linkage between HR processes and such foundational elements as mission, vision, and values — and no way of measuring how people are (or aren’t) aligned with them.
Marino said he meets leaders all the time who don’t think they have a culture. “They have a culture! They are either unaware of it or they are content or they haven’t thought about.” He warned that complacency is a trap that even successful companies can fall into—to their peril.
Curious (level 1): We can do better; let’s get started
How a curious culture shows up: Leaders recognize that culture matters. Values are taken seriously and included in onboarding. However, there is little coordinated effort to communicate what the values mean or how behaviors drive the values.
Marino noted that more companies than ever are at this stage of understanding culture better and wanting to move the needle. “Twenty-five years ago, when we would try to have a conversation about culture, we couldn’t even get a meeting with a senior leader. Today, we get meetings and they already have units of the organization in place working on culture. That’s how much we’ve changed, and how curious people are getting. People in human resources usually come into play at this point because something has happened in the market that indicates they have to be different.”
Committed (level 2): As leaders, we drive the culture
How a committed culture shows up: Culture matters, and resources are committed to improving it. Values are linked to specific behaviors in performance reviews, and positive results are occurring. Nevertheless, there is still no link to return on investment, and some senior leaders proclaim love for the values without actually living them.
“The biggest insight is that leaders figure out they lead the culture because otherwise the culture is leading them,” Marino said. They begin to visualize the ideal culture and are proactive about making the changes needed to realize it.
Catalyzed (level 3): How does this affect our business?
How a catalyzed culture shows up: A spirit of curiosity, openness, and continuous improvement permeates the company, fueled by a strong vision, purpose, and values. Tying culture to performance is a business imperative, with culture and people metrics established and linked to return on investment.
As the culture work progresses in an organization, leaders become deeply invested in understanding how the results from the culture changes taking place can be quantified. Marino called this an important inflection point. “They’re asking, ‘How does this now start to impact our return on investment? How does this impact business performance?’”
Customer centric (level 4): Our employees’ experience is our customers’ experience
How a customer-centric culture shows up: The environment (climate) created for employees is increasingly the one that customers experience, and it is reflected in strong customer satisfaction scores. People feel empowered to make customer-related decisions based on principles, not procedures. The goal is to be internally aligned and externally adaptable.
Marino noted that, in this phase, the customer and employee experiences are interdependent; the culture has empowered and engaged employees who in turn deliver better customer service. Leaders are clear on how this is improving customer ratings and enabling stronger performance.
Continuous (level 5): Our culture is our strategic asset
How a continuous culture shows up: Leaders can list the positive aspects of their workplace culture that must never change, yet they are agile in pursuing opportunities in an evolving market. When customers or employees speak, leaders listen and make visible improvements based on what is learned.
Marino noted that a continuous culture is really about evolving to stay agile. “It just becomes part of ‘the way we are’ and is seen as a strategic asset.”
While understanding where your culture is on the continuum puts you on the right path, deeper diagnostics and a rigorous process are critical to achieve goals and embed the culture you envision.
The journey to creating the ‘blue’ culture
There is a clear distinction between changing a culture and shaping a culture, as Marino noted in his workshop. “Changing means you’ve got to be different. Shaping means there’s an element of what you’re doing that you want to keep, that you want to build on.” That is what Loblaw set out to do using both Human Synergistics’ assessments for measuring attributes of organizational culture and individual behavioral styles and Senn Delaney’s culture-shaping methodology to embed the desired culture.
Video clip: Mike shares Senn Delaney’s four principles of culture shaping
Wilson summarized it, noting that, “We’ve had two great partners—Human Synergistics and Senn Delaney. We found a way to integrate them really well.”
The speed of change: Three catalysts for cultural change
A $46-billion organization with 200,000 employees, Loblaw is composed of six divisions, including 2,300 grocery and drug stores, an apparel business, and a bank. Wilson described the workplace culture five years ago as being stuck between 0 and 1 (Complacent and Curious) on the Senn Delaney Culture Continuum. Fundamental changes to Loblaw’s culture, ways of working, and cost base were necessary to achieve the company vision of becoming a lean, agile organization of collaborative teams accountable for delivering responsive and innovative customer solutions and fulfilling its purpose of helping Canadians ‘Live Life Well.’
Wilson described three catalysts that compelled leaders to act to transform the culture.
Speed of Change Initiative: The company had spent $2 billion to upgrade its supply chain and IT infrastructure with unclear benefits. The board was anxious to see a return on that investment. A.T. Kearney was brought in to analyze the issues. It found that half the problems in achieving synergy and cost savings from the supply chain and IT investments were culture-related, including clear issues of internal fighting, siloes, passive-aggressive behavior, and lack of collaboration.
Acquisition of Shoppers Drug Mart: Knowing that 75% of acquisitions fail to realize their fullest potential because of culture clashes, management and the board wanted to ensure that the pharmacy chain (a $14-billion acquisition) was integrated with maximum synergy.
Potential Labor Dispute: A strike of 20,000 workers loomed, which posed a potential major threat to profits. “We got past it, but the sole reason why we almost had that $60-million strike was all because of the relationship we had with our leaders in the stores and our colleagues; it was fractured,” notes Wilson.
Together, these three catalysts painted a sobering picture. “Our culture was breaking us as an organization, and we had to make drastic changes,” said Wilson.
Understanding behavioral state of health
During the Shoppers Drug Mart acquisition, Human Synergistics was engaged to conduct its Organizational Culture Inventory® (OCI®).2 Wilson stated: “We asked ourselves, ‘What do we think the culture is today, and what is the culture we want to aspire to?” The OCI provides a visual model, the Circumplex,3 which displays the levels of red (Aggressive/Defensive behavioral styles), green (Passive/Defensive behavioral styles), and blue (Constructive behavioral styles) that exist within the organization.4 The OCI revealed that there was work to do to move the organization to a more Constructive state of blue.
Results from Human Synergistics’ Life Styles Inventory™ (LSI), an individual development tool that uses both self-assessment and feedback from colleagues to identify individual thinking and behavioral styles, also provided the ‘ah-has’ that the culture needed to shift.5 People across the organization galvanized around the notion of creating a ‘blue’ culture, and so the name for the Loblaw culture was born.
Loblaw began to work on creating a more agile culture in 2014, with a focus on assessing and developing the organization and its leaders.
In 2016, a simple framework was created to guide the culture-shaping process in three important areas:
Shift Mindsets: Create behavior change through experiential sessions that inspire and enable colleagues to put personal change commitments into action. Led by the Team Management Board, aligned to the business strategy, and with the customer at the core, the behavioral changes would be driven by core values and talent and engagement efforts.
Institutionalize Culture: Reinforce desired behaviors by embedding culture principles into people programs, institutional processes, and daily practices and ways of working.
Energize the Organization: Engage colleagues in the culture journey through Culture Champions, communications campaigns, and fun events to drive awareness, understanding, and change.
Embed and Sustain: A support structure was developed for leaders to cast the right shadow as culture was infused in revised HR programs, institutional processes, performance development, and measurements. Culture Champions from across the organization assisted with the transformation. More than 30,000 people went through an experimental two-day program, B3: Better Me, Better We, Better Loblaw, that helped people understand where they were and how they as individuals can contribute to a Better Loblaw through the core values and cultural principles. They also used the Life Styles Inventory™ as part of this program. A collaborative approach was needed for culture transformation at stores and distribution centers. A “We Project” was launched that included communication, joint business planning, store visits and more. “The We Project was about re-engineering our performance development program, and really reaching out to our colleagues to say, how do we be better leaders and develop ourselves, and be better coaches in line with our culture as to where we’re going?” said Wilson.
Major milestones of the evolution to the blue culture included:
Readiness for change: The culture journey began with leaders recognizing that as they worked to create a more agile organization, they needed to consider people and processes, and ensure the culture enabled success and sustainable benefits.
Walk the talk of change: Three-day workshops for executives created personal awareness and insights, leading to openness for change. Leaders wanted to become more involved in shaping the culture, and 12 culture champions were born. The Life Styles Inventory™ (LSI) was introduced in executive workshops, providing a framework for thinking about ‘how’ they work.
Assessment and leadership commitment: Loblaw team members were surveyed using the Organizational Culture Inventory® (OCI®) to measure and examine the current culture. Colleagues resoundingly said they wanted a more Constructive ‘blue’ culture. The Management Board used the Ideal form of the OCI to define the ideal culture. A Culture Champion group, made up of executives committed to driving cultural change, was formed and provided skills and training to model the ideal culture and related behaviors. An EVP was appointed to lead the culture change.
Awareness-building: The decision was made to align to one set of values across the enterprise, and a soft launch of core values was done. Three simple culture principals—be authentic, build trust, make connections—served as a foundation for bringing the culture and values to life. Communications campaigns were built to broaden awareness, create buy-in, and inspire change. Wilson noted that they wanted to make bringing the ‘blue’ culture to life fun and memorable. An example of how they made this happen was a “Summer of Blue” campaign, where daily tips were shared on how to be blue. They also held a “Mission Blue” campaign and training with a nod to Mission: Impossible, where participants all received blue Converse sneakers.
Results of the transformation work in progress
What results were realized from such a robust culture-shaping journey? Looking back on the process that began in 2014, Wilson pointed to several, noting the journey continues in 2018 and beyond.
Video clip: Mark Wilson shares results of Loblaw’s culture journey
Among the results:
- Recognized $375 million in benefits attributed to systems and supply chain investments
- Achieved $300-million synergy target from acquisition of Shoppers Drug Mart in two years instead of three; exceeded half a billion dollars in synergies within three years
- Increased grocery store engagement by 8% over two years
- Increased pharmacy store engagement by 8% to best in class over two years
- Increased distribution center engagement by 13% over two years
“We feel that we are transforming the culture,” said Wilson. “I think the business absolutely does realize that, had we not gone on this culture journey, there’s no way we would have hit these numbers and where we needed to go.”
1 Heidrick & Struggles. (2017, Dec. 7). Find Your Place on the Culture Continuum. Retrieved from http://www.heidrick.com/Knowledge-Center/Publication/Find_your_place_on_the_culture_continuum
2 Cooke, R. A. & Lafferty, J. C. (1987). Organizational Culture Inventory®. Plymouth, MI: Human Synergistics.
3 Terminology from Robert A. Cooke, Ph.D. and J. Clayton Lafferty, Ph.D., Organizational Culture Inventory® and Organizational Effectiveness Inventory®, Human Synergistics International, Plymouth, MI. Copyright © 1987-2007. All rights reserved. Used by permission.
4 OCI® style names and descriptions are from Robert A. Cooke, Ph.D. and J. Clayton Lafferty, Ph.D., Organizational Culture Inventory®, Human Synergistics International, Plymouth, MI. Copyright © 1987-2007. All rights reserved. Used by permission.
5 Lafferty, J. C. (1973). Life Styles Inventory™. Plymouth, MI: Human Synergistics.