Managing Corporate
Culture at Henkel
Applying the Denison Organizational
Culture Survey
Daniel Denison and Rolf Schlue
Table of Contents
To the Reader
4
Preface
6
Managing Corporate Culture at Henkel
1. Overview:
The Purpose of this Case Study
10
2. About Henkel: The Business,
the Organization, and its Culture
11
3. Organizational Culture and
Performance: The Denison Model
16
4. Henkel's Decision to Apply the
Denison Model
23
5. Survey Implementation:
Results from 2003 and 2004
2|
26
6. Lessons Learned
32
7. The 2006 Survey
33
8. Discussion
34
References
36
The authors
37
Publications
38
|3
To the Reader
To the Reader
To the Reader
Lived corporate culture and exemplary leader-
Professor Dr. Sonja A. Sackmann, Bundeswehr
pleased as this study is the first in a series of
ship as success factors were at the centre of the
University Munich, and published by the
case studies on approaches successfully and
Carl-Bertelsmann-Prize 2003. The "International
Bertelsmann Stiftung in 2006, assembled
satisfactorily developed and/or applied in com-
Network Corporate Culture", a group of at pre-
best practice models.
panies.
nies, was founded as a follow-up to the Carl-
One of the most important results of the study
We would like to thank both Professor Denison
Bertelsmann-Prize 2003. Its objective is not only
was the insight that a direct connection between
and the IMD most cordially for helping make
the exchange among the participating compa-
corporate culture and success can be established
this case study possible. Particular thanks
nies but also the development, publication and
with the surveyed models. However, corporate
should also go to our colleagues at Henkel, Rolf
dissemination of good practices in corporate cul-
leaders need a clear understanding of their ob-
Schlue and his team.
ture.
jectives in applying a specific assessment tool.
sent eleven multinational Europe-based compa-
Liz Mohn
A measurement is only the description of a speAgainst the background of globalisation, inter-
cific state. It may show strengths and weaknes-
nationalisation and increased competition, the
ses and thus the need for improvement. From
question of whether corporate culture and eco-
the entrepreneurial perspective, an analysis
nomic success of a business are related gains
must aim at determining potential for improve-
Liz Mohn
Prof. Dr. Ulrich Lehner
even higher importance than before. Even com-
ment and help develop mechanisms to make
Vice-President of the
Chairman of the
panies that belong to the most successful world-
sustained use of such potential.
Executive Board and
Management Board of
Member of the Board of
Henkel, Dusseldorf
wide in their respective industries and leave no
doubt that they consider their specific culture
One of the assessment methods identified as
Trustees of the
relevant for their success are moved by the
particularly apt for this purpose is the Denison
Bertelsmann Stiftung,
question of how this corporate culture can be
Organizational Culture Survey. Henkel, a For-
Gütersloh
correlated with performance parameters.
tune Global 500 company and one of Germany's
Ulrich Lehner
top-performing companies, applied the system
The network's first working phase was dedicat-
developed by Daniel Denison, Professor of Mana-
ed to this context. Within the framework of the
gement & Organization at the IMD International
network activities, a broad study was commis-
Institute for Management Development.
sioned to investigate existing international mo-
4|
dels that assess this link with a view to their
Within the framework of the International Net-
practicability, relevance and set of criteria. The
work Corporate Culture Professor Denison and
study Assessment, Evaluation, Improvement:
Henkel agreed to develop a case study on the
Success through Corporate Culture, produced by
basis of their cooperation. We are particularly
|5
Preface
Preface
Preface
Corporate culture counts. Simple and self-evi-
with conflicts? Does the company wish to find
to return on shareholders' equity, customer
the International Network Corporate Culture is
dent as this sounds, it is difficult to prove. It is
out what is at the heart of performance deficits
satisfaction, sales increase.
the link between corporate culture and economic
even more difficult to prove if objective evidence
or, on the contrary, success factors?
The DOCS offers a number of starting points for
a survey over 25 internationally relevant models
In the latter cases, in particular, a culture as-
required changes. Change can be based on the
to assess this link as well as a smaller volume
is demanded to show in "hard factors", such as
return on investment.
sessment would ultimately lead to managerial
assessment within a particular unit or firm and
depicting six recommendable instruments in
Research over the past 20 years has, time and
intervention. This might be the consolidation of
the resulting high and low scores, on the one
more detail. In order to show how companies
again, focused on the link between corporate
individual aspects or components of the existing
hand, and/or on the comparison of the unit's or
make such models operational, the obvious thing
culture and the bottom-line performance of a
corporate culture to make better use of the po-
firm's score with that of an existing benchmark
to do was develop a case study on the appli-
company. Yet research was based on different
tential. Yet it might as well be the contrary, i.e. a
database, on the other.
cation of the DOCS at Henkel's.
concepts of corporate culture; reduced corporate
change of individual aspects of the existing cul-
cultures to different dimensions and compo-
ture or even an overall rearrangement in order
In research, the DOCS has been applied both in
As the following case study shows, Henkel con-
nents; used different approaches to defining per-
to unleash still hidden potential.
the US and in other national contexts such as
siders its decision to apply the DOCS a major
Russia, Europe, the Middle-East, Africa and Asia
success in itself. Expectations and objectives
formance; and took place in companies differing
in size and coming from different industries.
At any rate, a culture assessment geared at
(Hongkong). Denison and his US-based consult-
were fully met, not only did the work yield a
This did not really facilitate comparability and
change and improvement requires an under-
ing firm have also widely applied the instru-
clearer picture of the Henkel culture as it was
gave enough leeway to doubt the overall validity
standing of the culture first.
ment in companies such as Daimler Chrysler,
perceived and lived in the company over the five
Norsk Hydro, Clariant, Danfoss, Swiss Re, IKEA,
years under investigation, but it also provided
Roche, Shell, UBS or Credit Suisse.
highly relevant insight into required changes
of results.
An instrument which aims at doing both is the
6|
success. An immediate output of the project was
This is probably why companies are still in
Denison Organizational Culture Survey (DOCS),
search of useful instruments to assess their cor-
developed and applied by Professor Daniel
Henkel, a multinational Fortune Global 500 com-
for example, the need to improve communi-
porate culture and its relevance for corporate
Denison, currently Professor of Management &
pany with its headquarters in Germany, also ap-
cation about existing strategies throughout the
success. The catch, however, is in the word "use-
Organisation at the International Institute for
plied the DOCS. The initial reason for doing so
whole company and a great demand to foster
ful." Each assessment must be preceded by a
Management Development (IMD) in Lausanne.
was dissatisfaction with the traditional employee
cross-divisional cooperation. Such issues were
clear determination of its goals. The end ought
The DOCS assesses organizational culture in
satisfaction surveys which, Henkel felt, had be-
immediately tackled with obvious success.
and amendments. Major survey results showed,
to justify the means, i.e. what kind of culture
terms of four culture traits and twelve manage-
come less efficient over time and were no longer
assessment is chosen crucially depends on why
ment practices, identifies vulnerable areas and
up to the company's requirements. The DOCS
Main challenges upon applying the DOCS at
a company wants to assess its culture in the
links culture as assessed to performance meas-
seemed to be the most adequate tool given its
Henkel's turned out to be the operationalisation
first place. Does it aim at basically gaining clari-
ures. It makes culture accessible to managers
focus on establishing a link between corporate
of the tool (intervals of the survey, anonymity
ty about the existing culture in general? Is com-
and frames it in terms of dimensions that are
culture and corporate performance.
etc.) and communication about the survey and
paring oneself with others in the same (or an-
relevant for business performance. Every organi-
other) industry, of the same (or another) size
zation is seen to need capabilities in the areas of
In the 2003 Carl Bertelsmann Prize on lived cor-
will check to what extent involvement of more, if
etc. the objective? Is an integration with another
mission, consistency, adaptability, and involve-
porate culture and exemplary leadership, Henkel
not all, employees rather than focusing on
company, e.g. in the course of creating a strate-
ment. These four key concepts are related to dif-
ranked among the top 10 European companies.
management levels only will be possible.
gic alliance of M&A activities, to be accom-
ferent performance measures, such as profitabi-
The company is also a member of the Interna-
panied by a clearer understanding of "the other
lity, market share, sales growth, innovation, and
tional Network Corporate Culture initiated by the
Two conclusions from the final chapter are
culture" in order to avoid or, at least, better deal
employee satisfaction. Moreover, they are linked
Bertelsmann Stiftung. One of the key interests of
worth being quoted as they best show what lies
its results. In addition, Henkel at a later stage
|7
Preface
Managing Corporate Culture at Henkel
Managing Corporate Culture
at Henkel
at the heart of using the DOCS at Henkel's: the
Acknowledgements
effort "has grown into a strategic tracking tool
that closely monitors the human capability of
This project would not have taken place without
the organisation." Moreover, "Henkel learned to
the concerted efforts of all the partners involved.
use survey results and the survey process to
We would like to gratefully acknowledge their
continuously improve the capability of the orga-
contributions: Bertelsmann Stiftung, for their
nization." As the Henkel case impressively
original vision for this case study; Henkel, for
shows, assessing and understanding culture and
supporting this project and sharing the insights
culture awareness within the organisation is a
and lessons from their point of view; and IMD,
key to monitoring and improving performance.
for their steadfast support of this project.
Daniel Denison
Professor of Management & Organization
International Institute for Management
Development
Gabriele Schöler
Project Manager Competence Centre Corporate
Culture / Leadership
Bertelsmann Stiftung
We would like at this juncture to express our
thanks to Professor Daniel Denison for his
exceptional assistance in the promotion of our
corporate and performance culture at Henkel.
Rolf Schlue
Corporate Vice President Human Resources
Henkel KGaA
8|
|9
Overview | The Purpose of This Case Study
About Henkel | The Business, the Organization, and its Culture
1. Overview:
The Purpose of this Case Study
2. About Henkel: The Business,
the Organization, and its Culture
This case study presents a detailed account of
and his colleagues, we briefly describe that
What makes a company successful? How does a
The significance of the culture that has deve-
Henkel's recent efforts at building their corpor-
model and the research that supports it. Follow-
company convince its employees to adopt a tar-
loped over the decades is clearly expressed in
ate culture and aligning their most valuable
ing this, we give some of the background on
get-led approach in contributing to its corporate
the firmly established corporate principle: "We
resource — their people — with the principles and
employee surveys at Henkel, including their
success? How can attitude, conduct and actions
preserve the tradition of an open family." This is
objectives of the corporation. In particular, the
rationale for choosing the Denison approach.
be molded into a coherent, performance-enhanc-
one of ten values that Henkel has adopted as the
case study describes Henkel's application of the
These sections are followed by an overview of
ing corporate culture that delivers success to
framework for its corporate culture. The full set
Denison Organizational Culture Survey as a key
the survey implementation, the results from
shareholders, stakeholders and customers in
of maxims reads as follows:
focal point of their efforts to build the culture of
2003 and 2004, and an overview of the action
equal measure?
their organization in a way that would increase
planning, follow-up, and implementation steps
their competitiveness as a business enterprise.
taken after each survey. At the end, we summa-
For Henkel, the answers to these questions are
Henkel has used employee surveys in the past,
rize some of the key lessons learned from the
particularly important because corporate culture
but this effort put a performance-based culture
experience at Henkel, and give some hints on
plays a major role within this company. As in
metric at the center of the company's on-going
the continuance of the project in 2006.
the past, it continues to be significantly influ-
efforts to improve their culture, and created a
enced by the owner families and their descend-
foundation of accountability that had not existed
ants, who have constantly exhibited a high level
in their previous efforts.
of commitment to the corporation through an
investment approach aligned to the long term.
Working in close cooperation with IMD, this process continued through 2006, with a clear commitment to extend their approach in future years.
The learning curve over the first few years is
Figure 1. Our values
significant, and these insights are a key part of
our case study. The application of these lessons
- We are customer driven.
to Henkel's future efforts is also an important
part of our discussion. We are grateful for
- We develop superior brands and technologies.
Henkel's vision and their courage in sharing
- We aspire to excellence in quality.
their insights, so that they can continue to
- We strive for innovation.
improve and that others can learn from their
insights.
- We embrace change.
- We are successful because of our people.
This case study begins with an overview of
- We are committed to shareholder value.
Henkel, both as a business and as a human organization with a rich tradition and highly
- We are dedicated to sustainability and corporate social responsibility.
distinctive culture. Next, since the approach
- We communicate openly and actively.
that Henkel has chosen for building their own
- We preserve the tradition of an open family company.
culture has been closely integrated with the organizational culture model developed by Denison
10 |
| 11
About Henkel | The Business, the Organization, and its Culture
About Henkel | The Business, the Organization, and its Culture
Henkel is a leader with brands and technologies
€ 11,974 million and profits of € 1,162 million
Within its three strategic areas, the Henkel
existing growth potential with innovative pro-
that make people's lives easier, better and more
with more than 52,000 employees worldwide.
Group holds leading market positions in all four
ducts. 2005 sales in this sector were € 2,629
beautiful.
People in over 125 countries around the world
business sectors, and continues to expand these
million.
on a global scale:
Consumer & Craftsmen Adhesives. The pro-
Founded in 1876, "Henkel — A Brand like a
Laundry & Home Care. This business sector
ducts in this business sector are world leaders in
Friend" is today a leader with brands and tech-
holds leading market positions worldwide, driv-
their markets. 2005 sales were € 1,742 million.
nologies that make people's lives easier, better
ing expansion from a strong European and
trust in brands and technologies from Henkel.
and more beautiful. Henkel, a Fortune Global
North American base. 2005 sales in this sector
Henkel Technologies. This business sector also
500 company, operates in three strategic busi-
were € 4,088 million.
leads the world in its markets, offering products
ness areas — Home Care, Personal Care, and
Cosmetics &Toiletries. This business sector
and services based on extensive know-how of its
Adhesives, Sealants, and Surface Treatment. In
also holds leading world market positions. The
customers' processes. 2005 sales in this sector
fiscal year 2005, Henkel generated sales of
focus of its development effort is to further tap
were € 3,266 million.
Figure 2. Henkel Worldwide
Figure 3. Business Portfolio
• Sales 11,974 mill. euros • 125 countries • 52,000 employees
12 |
| 13
About Henkel | The Business, the Organization, and its Culture
Over the past decade, Henkel has expanded sig-
About Henkel | The Business, the Organization, and its Culture
T h e H e n k e l C u l t u re
nificantly across the globe. Of the 52,565 total
workforce employed by Henkel as at the end of
The innovative talents, flexibility, quality orien-
2005, 64% (33,731) work in Europe/Africa/
tation and market focus of the organization and
Middle East, 14% (7,271) in North America, 8%
its employees are major factors driving Henkel's
(4,208) in Latin America, and 14% (7,355) work
success. The company's human resources stra-
in Asia-Pacific. Today Henkel is one of the most
tegy has created the framework and set of condi-
international German companies with more than
tions designed to promote the development of
80% of its employees working outside Germany.
these essential performance drivers and ensure
that this potential is converted into reality.
This human resources strategy fits nicely with
Henkel's traditionally appreciative attitude
toward employees and one of its key corporate
values: "We are successful because of our people." Henkel expresses its recognition of its
52,000 employees worldwide as the force driving corporate performance and the pillars of
Figure 4. Employees 2005
ch kein
ich no
e
t
n
n
ails ko
den.
nen M
bild fin
n
In mei
e
p
p
ru
etes G
gesend
Henkel's corporate culture. This awareness can
also be found in the commemorative volume
written back in 1916 to mark Henkel's 40th
anniversary. There, company founder Fritz
Henkel writes: "A company in itself has no
intrinsic strength from which to develop and
grow. It is in the selection of its employees that
its fate — its success or failure — ultimately lies."
This corporate principle is the logical extension
of these historic roots and the approach that has
been consistently adopted by the company - at
first through the actions of the Henkel family
itself and later through the managing partners
of the company. In 2006, then Executive Vice
President Human Resources, IT, Infrastructure
and Purchasing Kasper Rorsted formulated the
following remit: "We have to get the best people
for our company. If we are successful in this,
we will also need to invest appropriate funds in
order to retain them within our organization."
14 |
| 15
Organizational Culture and Performance | The Denison Model
Organizational Culture and Performance | The Denison Model
Jugendarbeitslosigkeit
Organizational Culture and
in3.Europa–Konsequenzen
Performance:
The Denison Model
für
Deutschland
The basic premise of Henkel's approach to man-
The Denison Model
Figure 5. The Denison Organizational Culture Model
aging their corporate culture is a compelling one:
graphy is presented at the end of this case. This
principles traditionally held by the Henkel family
model is the basis for a 60-item survey that was
are the foundation of the company, but how will
the core of Henkel's approach to measuring and
we know the best way to apply them in the fu-
managing culture over the past few years. A
ture? Organizational cultures are a collection of
summary of this model is presented in Figure 5.
habits, good and bad, that have developed over
y
lit
bi
cu mer
s
“Do we know where
we are going?”
“Are we listening
to the marketplace?”
Beliefs and
Assumptions
Flexible
Stable
Coord
ina
Integra tion &
tion
sitive influence on performance. The powerful
Defining a meaningful
long-term direction
for the organization
Vision
business performance. A brief research biblio-
Involvement
Commitment...Ownership...
Responsibility
ent
werm
have compared cultural traits and patterns of
time, the culture must also be one that has a po-
Mission
Direction...Purpose...Blueprint
Empo
"right thing to do," but in order to survive over
Strate
gic Dir
& Inte ection
nt
Fo
series of studies over the past two decades that
ta
zation based on these principles may be the
Translating the demands of
the business environment
into action
ap
focus on these four traits has evolved from a
n al
izatio
Organ ning
r
a
e
L
sto
support this point of view? Building an organi-
Cu
consistency that are summarized below. The
Ad
petitive advantage. But where is the evidence to
External Focus
Adaptability
Pattern...Trends...Market
Creat
in
Chang g
e
traits — mission, adaptability, involvement, and
n
of its people are an important source of com-
io
iss
The Denison model is based around four key
& s
M
als ive
Go ject
Ob
The culture of the organization and the capability
Over the past twenty years, Denison and his col-
en
Core
s
Value
cy
m
Ag
Capa
Develo bility
pmen
t
Defining the values
and systems that are the
basis of a strong culture
ns
“Are our people aligned
and engaged?“
Co
v
a way that preserves our vision for the future?
i st
en
re
e
l
vo
In
the meaning of these time-honored principles in
Building human capability,
ownership, and responsibility
am ion
Te ntat
t
en
ie
Or
em
important to us in the future? How do we decide
t
time. How do we decide which ones are most
Consistency
Systems…Structures…
Processes
“Does our system
create leverage?”
Internal Focus
leagues have studied the link between organizational culture and business performance, trying
to understand the cultural traits of high perMission. Successful organizations have a clear
both short and long-term commitment to the
they have developed an approach, based on the
sense of purpose and direction, which allows
organization. Like all of the traits, Mission is
Denison Organizational Culture Survey, which
them to define organizational goals and strate-
measured by three indexes, each of which has
is widely used in diagnosing organizations and
gies and to express a compelling vision of the
five survey items:
helping to drive the change process. Henkel's
organization's future. Leaders play a critical role
approach to managing their culture has adopted
in defining mission, but a mission can only
Strategic Direction and Intent. Clear strategic
this approach and used it in their own unique
succeed if it is well understood top to bottom. A
intentions convey the organization's purpose
way as a key component to help build their cul-
clear mission provides purpose and meaning by
and make it clear how everyone can contribute
ture. This next section of the case study gives a
defining a compelling social role and a set of
and "make their mark" on the industry.
brief overview of the culture model, the survey,
externally defined goals for the organization. A
Goals and Objectives. A clear set of goals and
and the research that lies behind it.
sense of mission also allows an organization to
objectives can be linked to the mission, vision,
shape current behavior by envisioning a desired
and strategy, and provide everyone with a clear
future state. Being able to internalize and identi-
direction in their work.
formance organizations. Out of this research
fy with an organization's mission contributes to
16 |
| 17
Organizational Culture and Performance | The Denison Model
Organizational Culture and Performance | The Denison Model
Vision. Effective organizations hold a shared
Involvement. Effective organizations empower
sensual support. These implicit control systems
between top-down direction and bottom-up
view of a desired future state. It embodies core
and engage their people, build their organiza-
can be a more effective means of achieving coor-
influence.
values and captures the hearts and minds of the
tion around teams, and develop human capabili-
dination and integration than external-control
organization's people, while providing guidance
ty at all levels. Organizational members are
systems that rely on explicit rules and regu-
At the center of this model in the graph in
and direction.
highly committed to their work, and feel a
lations. These organizations have highly commit-
Figure 5 are underlying beliefs and assump-
strong sense of engagement and ownership.
ted employees, a distinct method of doing busi-
tions. This addition to the model reflects the fact
Adaptability. A strong sense of purpose and
People at all levels feel that they have input into
ness, a tendency to promote from within, and a
that "deeper" levels of organizational culture
direction must be complemented by a high de-
decisions that will affect their work. They also
clear set of "do's" and "don'ts." This type of con-
(Schein, 1992) are difficult to measure using
gree of flexibility and responsiveness to the
feel that their work is directly connected to the
sistency is a powerful source of stability and
comparative methods. Nonetheless, they provide
business environment. Organizations with a
goals of the organization. This allows high invol-
internal integration. In the model, this trait is
the foundation from which behavior and action
strong sense of purpose and direction can often
vement organizations to rely on informal, volun-
measured with three indexes:
spring. Beliefs and assumptions about the orga-
be the ones that are the least adaptive and the
tary, and implicit control systems, rather than
Core Values. Members of the organization
nization and its people, the customer, the mar-
most difficult to change. Adaptable organizations
formal, explicit, bureaucratic control systems.
share a set of values which create a sense of
ketplace and the industry, and the basic identity
translate the demands of the organizational
This trait is measured with three indexes:
identity and a clear set of expectations.
of the firm create a tightly knit logic that holds
Agreement. Members of the organization are
the organization together. They represent the
from their mistakes, and are good at creating
Empowerment. Individuals have the authority,
able to reach agreement on critical issues. This
core "DNA" and underlying logic of the firm.
change. They continuously improve the organi-
initiative, and ability to manage their own work.
includes both the underlying level of agreement
zation's ability to provide value for its customers
This creates a sense of engagement, ownership,
and the ability to reconcile diverse points of
None of the four cultural traits are unique to
environment into action. They take risks, learn
by creating a system that translates signals from
and responsibility to the organization.
view when they occur.
the model presented in this paper. They are all
the environment into internal systems that en-
Team Orientation. Value is placed on working
Coordination and Integration. The different
closely linked to central concepts in manage-
sure the organization's survival and growth.
cooperatively toward common goals for which all
functions and units of the organization are able
ment theory. Furthermore, they all have close
This trait is measured with three indexes:
employees feel mutually accountable. The orga-
to work together well to achieve common goals.
parallels in Henkel's own values and vision. The
nization relies on team effort to get its work
Organizational boundaries do not interfere with
organizational culture model simply serves to
getting work done.
integrate these concepts, develop a set of valid
Creating Change. The organization creates
done.
adaptive ways to meet changing needs. It is able
Capability Development. The organization
to read the business environment, react quickly
continually invests in the development of
Like many contemporary models of leadership
zational performance, and then apply them as
to current trends, and anticipate future changes.
employees' skills in order to stay competitive
and organizational effectiveness, this model has
a method for diagnosing the key strengths and
Customer Focus. The organization understands
and meet on-going business needs.
focused on a set of tensions or contradictions.
challenges of an organization.
For example, the trade-off between stability and
and reacts to its customers and anticipates their
18 |
measures, show their close link to organi-
future needs. It reflects the degree to which the
Consistency. Organizations are most effective
flexibility and the trade-off between internal and
L i n k i n g O r g a n i z a t i o n a l C u l t u re a n d
organization is driven by a concern to satisfy its
when they are consistent and well integrated.
external focus are the basic dimensions underly-
P e rf o rm a n c e
customers.
Behavior must be rooted in a set of core values,
ing the framework. In addition, the diagonal
Organizational Learning. The organization
and people must be skilled at putting these
tensions in the model are also important to un-
Published studies over the past two decades have
takes risks, learns from its mistakes, and con-
values into action by reaching agreement while
derstand. Achieving both internal consistency
explored many aspects of the link between or-
stantly integrates this knowledge to improve the
incorporating diverse points of view. Consistent
and external adaptability is easier said than
ganizational culture and business performance.
organizational system.
organizations develop a mindset that supports
done, while reconciling mission and involvement
These studies have examined the link between
an internal system of governance based on con-
require that firms resolve the inevitable tensions
the four basic traits in the culture model and
| 19
Organizational Culture and Performance | The Denison Model
Organizational Culture and Performance | The Denison Model
performance measures such as profitability,
answer to this question is presented in the ana-
(ROE), while the companies in the profile on the
their service experience at the dealership. The
sales growth, quality, innovation, and market
lysis in Figure 6. This study used data collected
right side had a 21% profit ratio (ROE). Thus, the
culture profile on the right is the profile of those
value. The research has also examined these
from 161 publically traded companies that had
companies with high culture scores appear to be
dealerships in which more than 80% of the cus-
links in over twenty different countries. A com-
completed the Denison Organizational Culture
more than three times more profitable than
tomers reported that they were highly satisfied
plete review of this research is well beyond the
Survey. Figure 6 contrasts the culture results for
those with low culture scores.
with their service experience at the dealership.
scope of this paper, but many of the studies are
the top 10% and bottom 10% of that sample. Since
cited in the bibliography at the end of this paper.
this is a contrast between the companies with
This research has also led to interesting results
the best and worst culture profiles, it is no sur-
with respect to customer satisfaction. Figure 7
twelve indexes between the high and low satis-
The most basic question addressed by this
prise that the profile on the right shows much
and Figure 8 present the results from a study of
faction dealerships.
research is a simple one: Do companies that
higher scores than the profile on the left. But the
automotive dealerships in the USA. The culture
possess the traits described by the culture model
more interesting finding is that the companies in
profile on the left is the profile of the dealer-
indeed have higher performance? One simple
the profile on the left side had a 6% profit ratio
ships in which less than 50% of the customers
Figure 8 presents a bar chart summarizing the
differences in the culture scores on each of the
reported that they were highly satisfied with
Figure 7. Organizational Culture and Customer Satisfaction
pt
Coord
ina
Integra tion &
tion
te
nc
y
en
t
m
Core
s
Value
Ag
re
e
84
Capa
Develo bility
pmen
t
ns
is
Coord
ina
Integra tion &
tion
t
en
m
en
cy
re
e
Ag
ist
Coord
ina
Integra tion &
tion
Ad
a
Cu
s
Fo tom
cu er
s
Internal Focus
ns
m
e
re
e
cy
ist nt
en
cy
Ag
ns
Co
Coord
ina
Integra tion &
tion
t
en
m
ist
en
re
e
Creati
n
Chang g
e
Creati
n
Chang g
e
Creati
n
Chang g
e
Creati
n
Chang g
e
Ag
ns
Core
s
Value
90
75
v
Capa
Develo bility
pmen
t
am ion
t
Te ntat
en
ie
Or
em
t
en
Internal Focus
m
Core
s
Value
79
l
vo
In
83
91
t
70
Capa
Develo bility
pmen
t
53
35
Stable
80
en
werm
21
am ion
Te ntat
ie
Or
Co
54
81
lve
vo
In
20 |
t
en
Average ROE = 6%
m
Internal Focus
am ion
Te ntat
ie
Or
v
Core
s
Value
lve
vo
In
am ion
t
Te ntat
en
ie
Or
em
l
vo
In
Capa
Develo bility
pmen
t
ent
80
92
Beliefs and
Assumptions
Stable Flexible
40
34
79
Empo
77
77
Flexible
werm
ent
ent
werm
werm
21 17
Empo
Empo
19
24
Stable
ab
Cu
ilit
s
Fo tom
y
cu er
s
y
bi
lit
Ad
ap
ta
y
ilit
ta
b
Fo m
cu er
s
ap
sto
Cu
Ad
Ad
ap
t
Stable Flexible
Beliefs and
Assumptions
78
Vision
Flexible
58
40
n
80
Beliefs and
Assumptions
Empo
Beliefs and 9
Assumptions
15
20
83
io
iss
84
22
30
39
81
Strate
gic Dir
& Inte ection
nt
91
35
Vision
21
Vision
Vision
20 14
n
50
nal
izatio
Organ ing
Learn
& s
als ive
Go ject
Ob
io
iss
& s
als ive
Go ject
Ob
80
67
20
External Focus
Strate
gic Dir
& Inte ection
nt
M
nal
izatio
Organ ing
Learn
M
n
n
io
iss
82
& s
als ive
Go ject
Ob
io
iss
& s
als ive
Go ject
Ob
79
Strate
gic Dir
& Inte ection
nt
M
nal
izatio
Organ ing
Learn
Above 80% Highly Satisfied
External Focus
External Focus
Strate
gic Dir
& Inte ection
nt
M
ab
Cu
s
ilit
Fo tom
y
cu er
s
External Focus
nal
izatio
Organ ing
Learn
Below 50% Highly Satisfied
High Performing Culture
Co
Low Performing Culture
Co
Figure 6. Return on Shareholder Equity
Internal Focus
Average ROE = 21%
| 21
Organizational Culture and Performance | The Denison Model
Henkel's Decision to Apply the Denison Model
4. Henkel's Decision to
Apply the Denison Model
Figure 8. Differences between High and Low Satisfaction Dealerships
Differences Between High and Low Satisfaction Customers
31
Organizational Learning
52
Customer Focus
Creating Change
39
Empowerment
40
45
Team Orientation
Employee surveys have been a regular feature
The interval between the 1990 and the 1995
within the Henkel corporate environment since
surveys provided a clear indication of the
the 1980s. Henkel's longstanding commitment
changes that had taken place and the current
to a dialog aimed at promoting the "common-
challenges and areas in which further action
alities" of the company has been supported by
and improvement were necessary. On the other
these surveys. Projects have typically been
hand, there was also plenty of scope for inter-
implemented every five years, to determine
pretation and detailed discussion was required
respondents' attitudes, their satisfaction, and
in order to determine which challenges and
their identification with the company. Within
changes had actually been revealed by the re-
Germany, and also in the wider international
sults of the questionnaires.
context, Henkel was one of the first corporations
54
Capability Development
49
Core Values
Agreement
37
Coordination & Integration
37
But it also became apparent that the 110
basis of scientifically based questionnaires.
questions included in these surveys addressed
so many different issues that employees developed
The last employee survey prior to adopting the
significant expectations that extensive and tan-
Denison model was conducted in 1995 with
gible change was on the way. Partly because of
2012 managers responding. It was found to be
these high expectations, the activities and chan-
a highly suitable method for
ges actually introduced were regarded as rather
34
Vision
Goals & Objectives
48
Strategic Direction & Intent
48
0
10
20
30
40
50
These kinds of results and the stream of research that has produced them suggest that the
culture of an organization is indeed an important asset that pays economic returns over time.
This grounding in business results was a critical
insignificant and hardly registered. Overall, the
60
70
80
90
100
- providing insight into the company's internal
surveys gave rise to a latent impression that not
image. Was Henkel an attractive employer?
much had happened and that — consequently —
Was employee identification with their work
little change could be expected in the future. Such
generally high? Were they satisfied with their
perceptions have a major discouraging effect on
decision to join Henkel?
employee willingness to participate in surveys.
- assessing the levels and quality of cooperation
within units and crossborder.
- discovering attitudes with regard to working
conditions, compensation and benefits.
- assessing the perceived quality of information
It also became increasingly obvious that surveying employee satisfaction, while having an inherent value, does not facilitate definition of the
factors driving the success of a corporation or
factor in Henkel's choice to apply the Denison
provided, Henkel's information policy, getting
defining its cultural character. Henkel's in-house
model as a means to better manage their
information on time and in sufficient detail.
analysis of this issue and the many discussions
- examining the leadership role. These ques-
conducted with experts clearly indicated that a
culture.
22 |
to analyze such employee orientation on the
tions focused on leadership topics such as the
company needed to know more than merely the
supervision and discussion of work; the provi-
level of satisfaction of its employees. It had to
sion of help and fair assessment; the assign-
answer two questions: What drives success?
ment of challenging targets for improvement;
What cultural elements do we need to improve
and the acceptance of guidelines.
in order to improve our performance?
| 23
Henkel's Decision to Apply the Denison Model
Henkel's Decision to Apply the Denison Model
Around this time, major changes were also
the International Institute for Management Deve-
comparing Henkel results to 557 companies
occurring within the corporation, including orga-
lopment (IMD) in Lausanne, Switzerland — pro-
from eight industries in 16 countries (75% North
nisational realignment, acquisitions, divestments,
vided the ideal platform for Henkel to complete-
America, 20% Europe, 5% Asia). This global per-
strategic focus on brands and technologies and,
ly revise the methodology applied in its manager-
spective was also a decisive factor.
above all, the introduction of the Henkel Vision
ial surveys. Denison concentrates primarily on
and Values as the framework for the corporate
the effect of corporate culture on internal coordi-
Measuring the cultural drivers that influence the
culture. Taken together, these conditions created
nation of participants. In this way, he effectively
performance of a company was a completely dif-
much more far-reaching objectives for surveys,
positions culture as a key driver of corporate
ferent approach than the employee satisfaction
and caused Henkel — and specifically Human
performance.
surveys conducted in the past. The results and
the improvements have fast, positive effects for
Resources as the lead unit — to step away from
the traditional approach.
From an operational point of view, Henkel also
Henkel customers. The results increased the
wanted to answer the following questions:
awareness of managers of the importance of a
performance-oriented, entrepreneurial culture
In September 2002 the principles and objectives
- Which provider uses benchmarks as an inte-
and used relatively short (1-2 years) survey
"Vision" and ten "Values." These were faithfully
gral part of its employee surveys to position
cycles to rejuvenate the culture and keep the
derived from the traditional roots of the compa-
itself vs. industry/peers?
organization "on its toes."
of the Henkel Group were realigned to a single
ny and chosen as the basis of a binding code
governing the attitude, conduct and actions of
- Which method is the most cost-effective, with
less expense than in the past?
the company's 52,000 plus employees world-
- Can the required analysis work be carried
advantage. Less than four weeks were required
wide. It is the managers and employees of the
out quickly and within short intervals?
for data collection for a global survey with over
- Will the results be easier to communicate
7,000 participants, and complete results avail-
Henkel Group alone who are responsible for
meeting the standards and achieving the ambi-
and understand than in the past?
tions embodied in the Vision and Values. It is
24 |
The survey process itself was also a compelling
able four weeks later. The internet-based data
collection process also saved time, effort, and
the degree to which they identify with the
Through a pilot project in the North American
cost on Henkel's part. In the past, Henkel's
Vision and Values that determines the true vali-
Technologies Division in 2002/03, Henkel tested
employee surveys would require two person-
dity of these guidelines. Managers need to cre-
the acceptability of this method and judged that
years for project planning, implementation,
ate the right opportunities for employees and to
the Denison Model satisfied these requirements,
evaluation, communication and archiving.
encourage and empower people to "walk the
with an efficient analytical approach and easy-
Henkel's effort using the Denison method was
talk." This approach has led to a greater empha-
to-understand results that were on target. They
reduced to around two person-months. Thus,
sis on cultural drivers and their influence on
felt that the method created high manager aware-
compared to earlier survey and evaluation
the performance of a company.
ness of the cultural drivers and their impor-
methods, the DOCS thus represented around
tance for high performance. Henkel also saw
10% of the usual cost per cycle.
The search for a suitable system to measure
that within an organization made up of different
these cultural drivers of success within a cor-
working units, the culture survey helped in
poration led to IMD in Switzerland. Professor
understanding the diverse cultural elements
Daniel Denison — first at the University of
that influence overall success. Henkel also saw
Michigan Business School and since 1999 at
the critical value of peer-level benchmarks,
| 25
Survey Implementation | Results from 2003 and 2004
Survey Implementation | Results from 2003 and 2004
5. Survey Implementation:
Results from 2003 and 2004
External Focus
xes in the Denison survey. The results also in-
and regional managers, the HR group was ex-
cluded an analysis of the 60 questions making
pected to introduce, implement and evaluate
up these twelve index scores. These scores
the instrument.
compare the results from Henkel to the bench-
44
da
A
mark database and show Henkel's strengths and
challenges relative to the benchmark. There are
Vision and Values of the Henkel Group. The
cided to keep the pattern of the survey for ma-
results also indicated that a large proportion of
nagement, executive staff and non-executive
the respondents would welcome closer cooper-
staff at different times. Thus the reason for
ation across departmental boundaries.
54
m
to relaunch the employee survey, they also de-
67
re
e
were apparently not sufficiently aware of the
63
Ag
around 7,500 worldwide. When Henkel decided
63
am ion
t
Te ntat
en
ie
m
Or
Henkel strategy. In addition, Henkel managers
Stable
39
72
e
lv
vo
In
they show a perceived lack of knowledge of the
pants in the 2003 survey, a population of
44
Beliefs and
Assumptions
ent
werm
several clear messages from these results. First,
All management levels in Henkel were partici-
50
Flexible
Empo
The 2003 Surv e y
57
Vision
Creat
in
Chang g
e
57
Coord
ina
Integra tion &
tion
As the strategic partner of the business units
82
n
io
the percentile scores for each of the twelve inde-
ss
The survey results presented in Figure 9 show
had to be laid within the global HR organization.
Strate
gic Dir
& Inte ection
nt
i
M als & es
iv
Go ject
Ob
prior to roll-out of the survey, the groundwork
nal
izatio
Organ ning
Lear
pt
Management Board of the Henkel Group and
Capa
Develo bility
pmen
t
Core
s
Value
y
survey was set at 75%.
t
world. Following the positive decision by the
en
satisfactory, but the objective for the second
en
c
This is an average response rate, and thus was
Henkel's executives and HR officers around the
ns
ist
would require a high level of commitment from
Figure 9. Henkel survey results
Co
The response rate for the first survey was 61%.
ab
Cu
ili
s
Fo tom
ty
cu er
s
It was clear to all involved that the new method
Internal Focus
concentrating on the management levels only
at this stage was to avoid focusing the whole
organization at the same time on the survey
including the discussion of results and indicated
In addition to the overall results, each manager
- What are the predominant patterns in the
actions, which might have meant to keep 50,000
also received the results relevant to their areas
survey results?
employees busy and distracted from doing their
of responsibility so that they could discuss them
- How do these results fit with your own
original business.
with their employees within their organisational
units. This allowed them to closely analyze the
perception of the organization?
- What conclusions might be drawn from the
Secondly, when the survey relaunch took place
results relating to their domain, defining pot-
data with respect to our strategic objectives?
ential areas for further development and impro-
- What are the specific deficiencies that need to
and the Denison Organizational Culture Survey
was applied, Henkel wished to doublecheck first
vement with their team and developing action
be addressed so that we may achieve our
plans. Henkel recommended that feedback and
goals and targets?
how this new survey was accepted and worked.
Involvement of non-executives will be a point of
discussion — "working through" the survey rediscussion in the future, yet the challenge is, of
sults — should begin by focusing on the follocourse, how to tackle such a large and diverse
wing questions:
group of people.
26 |
| 27
Survey Implementation | Results from 2003 and 2004
Survey Implementation | Results from 2003 and 2004
Around 470 feedback workshops and numerous
underwent reworking, not necessarily content-
ments in Mission are clearly linked to the inten-
projects — in total around 470 — were organized
wise but at least communication-wise. This was
sive discussions held after the first survey and
in order to discuss and implement the activities,
a Henkel-wide initiative. After this exercise it
the intense communication of the Henkel Vision
and plan the changes and improvements suggest-
had become clear that intensive dissemination
in the business sectors. Significant improvements
ed by the survey. Of these 470 projects
and penetration was the "name of the game" for
also occurred in Coordination & Integration, but
all employees to achieve a clearer picture and
still left room for improvement, particularly with
understand where Henkel is heading.
respect to cooperation across departmental
- 47% dealt with Henkel's Strategy, Vision and
boundaries.
Values;
- 25% dealt with Cross-divisional and Crossfunctional Cooperation;
Results, by the way, improved clearly in the
next survey and encouraged management to
- 19% dealt with Customer Focus;
move further to achieve a higher penetration
- 9% dealt with Teamwork and Cooperation.
rate and gain broad involvement and commitment.
Specifically, the groups discussed reasons for
2003
2004
External Focus
+ 1 External Focus + 10
willing to improve the situation from CEO level
change. Comparing results from 2003 and 2004
to all businesses and functions on corporate,
shows that improvements occurred in all areas
regional and/or country level, all strategies then
except Team Orientation. The significant improve-
t
Capa
Develo bility
pmen
t
+3
Core
s
Value
Coord
ina
Integra tion &
tion
y
en
c
ist
Ag
re
e
m
en
t
59
ns
cy
m
re
e
Ag
70
+9
Co
Coord
ina
Integra tion &
tion
t
-1
+8
72
Internal Focus
61%
28 |
Core
s
Value
63
v
acceptance of the survey as a useful tool for
Capa
Develo bility
pmen
t
75
am ion
t
Te ntat
en
ie
Or
em
Having understood the deficit and being clearly
54
+2
+ 15
Stable
91
l
vo
In
ments in the survey process and a broader
Beliefs and
Assumptions
t
for this survey rose to 80%, reflecting improve-
67
59
63
Stable Flexible
63
v
was not easy to communicate or recall them.
am ion
t
Te ntat
en
ie
Or
em
pants in the survey. This time the response rate
64
l
vo
In
all management-level employees were partici-
occasionally strategies were so complex that it
44
39
73
t
lar, did not have full information. Moreover,
Beliefs and
Assumptions
66
ermen
2004, showed many improvements. Once again,
61
+ 13
w
Empo
The second survey, conducted in November
gies was not seamless. Lower ranks, in particu-
en
werm
Empo
the top-down approach in communicating strate-
ab
Cu
s
ilit
Fo tom
y
cu er
s
Fo
50
Flexible
Ad
ap
bil
ity
ta
cu mer
s
ap
The 2004 Surv e y
transfer outside Henkel's). On the other hand,
54
Vision
nicated in detail (in order also to avoid easy
57
Vision
Creati
n
Chang g
e
57
83
n
driven by corporate HR.
enough. Partly, strategies had not been commu-
+9
io
iss
obviously at least penetration had not been good
44
Strate
gic Dir
& Inte ection
nt
& s
als ive
Go ject
Ob
gram was set up with defined targets of rotation
nal
izatio
Organ ing
Learn
M
been in place of any business and function, yet
82
n
management. A cross-divisional job rotation pro-
+4
io
iss
Direction and Intent. Of course, strategies had
nal
izatio
Organ ing
Learn
& s
als ive
Go ject
Ob
ment to knowledge sharing and knowledge
M
of Mission, especially addressing the Strategic
Strate
gic Dir
& Inte ection
nt
sto
and helped generate a more intensive commit-
Cu
and utilization of the Henkel Global Academy,
key areas for leadership to address was the area
Ad
Out of the enourmous number of initiatives the
Creati
n
Chang g
e
interdisciplinary teams, stronger involvement
en
peration. This led to the formation of numerous
en
ed action steps to address these issues.
Figure 10. 2004 Survey results
ist
was a desire for more cross-divisional coo-
ns
Another outcome of the survey was that there
conclusions and, where appropriate, recommend-
Co
the low scores in the various areas, drew their
Internal Focus + 5
80%
| 29
Survey Implementation | Results from 2003 and 2004
Survey Implementation | Results from 2003 and 2004
Figure 12. Comparison
2003
100
75
50
2004
25
0
25
50
75
2003
100
100
Involvement
Æ
Figure 11. Henkel Overall
75
2004
Empowerment 73
Vision
75
100
Agreement 63
9
72
Coordination & Integration 39
8
47
Coord
ina
Integra tion &
tion
en
t
m
13
Core Values
Agreement
Coordination & Integration
31
14
56
98
25
52
ü
79
70
7
91
77
Involvement
63
Customer Focus 57
4
61
Organizational Learning 82
1
83
en
cy
re
e
Creating Change 50
ist
v
Ag
73
48
Adaptability
Empowerment
Team Orientation
Capability Development
2
73
1
64
63
3
67
75
70
Mission
ns
am ion
t
Te ntat
en
ie
Or
em
l
vo
In
Core
s
Value
75
9
64
Co
t
ermen
72
59
25
50
59
Strategic Direction & Intent 44
Goals & Objectives 57
Æ
Vision 44
54
9
66
59
15
Bar on left indicates this group
has a lower percentile score
percentile score
to group on left
Æ
80%
10
Æ
Bar on right indicates this group
has a higher percentile score
Æ
ap
t
w
Empo
63
5
Stable
91
75
Strategic Direction & Intent
Goals & Objectives
Vision
Consistency
Beliefs and
Assumptions
Capa
Develo bility
pmen
t
2004
50
Consistency
Core Values 54
59
63
Internal Focus
30 |
70
3
n
ab
Cu
s
ilit
Fo tom
y
cu er
s
63
io
iss
& s
als ive
Go ject
Ob
Ad
1
Capability Development 67
66
70
improvement
25
0
75
M
54
61
Creati
n
Chang g
e
2
Team Orientation 64
Strate
gic Dir
& Inte ection
nt
83
Flexible
Æ
deterioration
25
Mission
External Focus
nal
izatio
Organ ing
Learn
50
Adaptability
Creating Change
Customer Focus
Organizational Learning
1
10
30
43
6
11
24
3
40
percentile score
to group on right
Analysis of the results by management level
the mission and the core values. If this process
Henkel also observed lots of specific improve-
findings helped substantiate that the survey
also show that the biggest impacts in the under-
had been extended to lower level of manage-
ments in different parts of the organization that
process brought about tangible, positive change.
standing of the mission occurred at the middle
ment during the 2003-2004 time period, then
reinforced the idea that they were making pro-
management level. The top level of manage-
we would expect that the overall results would
gress. The business unit that spent the most
ment already had a clear understanding of
have been even stronger. Thus, applying the
time clarifying and communicating their strate-
Mission in 2003, but the results showed that
process at the lower management levels became
gy showed the strongest results. Different coun-
this understanding was not shared at the middle
a key objective of the planning process in 2005.
try organizations that were high performing,
level. Between 2003 and 2004, these level
well-managed business units showed stronger
managers were clearly brought "on board" with
results than those that were not. All of these
| 31
Lessons Learned
The 2006 Survey
6. Lessons Learned
In May 2005, to focus their preparations for the
third survey cycle in 2006, Henkel Corporate
7. The 2006 Survey
- 90% would be willing to take part in the next
survey.
The next survey took place in November 2006.
the world were also concurrently requested per-
munication efforts had been successful.
Henkel hoped to increase participation to over 80%
sonally to ensure that the survey received con-
In Figure 13 it can be easily observed
HR surveyed 2,000 managers that had been
Lesson: This indicated that we should be
of managerial staff even though the company was
stant mention in all appropriate general commu-
that over the three cycles the rate has
involved in the survey to determine their views,
able to achieve the objective for 2006.
well aware that the industry standard was lower.
nications. In April 2006, Professor Denison ex-
constantly improved. Now it is the
desires, and expectations about the survey as
Nonetheless, 100% participation were the
plained the structure, purpose and objectives of
main target to secure at least the same
such:
goal since only those expressing an opi-
In order to achieve this higher response rate and
the survey process in a detailed interview pu-
results in upcoming cycles.
- 53.5% responded to the survey.
nion can expect it to be heard and acted
overall greater impact of the survey, Henkel took
blished in the German and international hardco-
upon.
several important steps. They developed a better
py and intranet editions of Henkel-Life. A report
After collecting the data and preparing
communication plan, introduced a new person-
on the "Denison Case Study" then appeared in
the summary reports, the results of
- 90% of respondents were pleased with the
convenience of the electronic survey.
- 80% regarded the time required to complete
the survey as acceptable.
- 35% believed that the survey would change
nothing.
Lesson: More intensive follow-up work is
- Common to all respondents was a desire for
more - and more coherent - communication in
alized internet-link approach for completing the
the fall 2006 edition of Henkel-Life. In September,
the survey will be presented to the
advance of the survey and also following
survey and accessing the reports, and provided
Henkel-Life also reported on the survey to be
Management Board in January 2007,
the results.
an additional guarantee of confidentiality and
conducted amongst managerial staff (to be
which will be followed by extensive
Lesson: A more focused communication
anonymity based on an externally audited data
launched in November).
feedback throughout the organization.
plan was required for 2006.
protection system.
required in order to make a clearer
In October 2006, prospective participants were
linkage between the purpose, the results,
The communication planning began in March
each sent an e-mail requesting their active in-
the action planning efforts, and the
2006. A worldwide HR e-mail was sent to all
volvement, and on November 1 the actual survey
implementation process.
managerial staff informing them of the planned
invitations were sent out. The participation rate
third survey cycle. All Corporate Communica-
for the 2006 survey reached 85%, which was an
tions and Human Resources employees around
excellent result and showed that internal com-
- 22% expressed doubts as to the anonymity of
the survey.
Lesson: Data security and preservation of
anonymity is crucial to survey participants.
Figure 13. Participation rate Denison
Even after three years when their respon100,00
reports have been provided to Henkel un-
90,00
less there were five or more responses,
80,00
constantly addressed to ensure the credibility of the process. As a part of this process, Henkel provided an audit of the entire process, supported by an external provider.
- Around 50% did not wish to see the survey
repeated on an annual basis.
Lesson: Henkel will conduct the survey
every two years, i.e. following 2004 the
70,00
2006
2004
2003
60,00
50,00
40,00
30,00
20,00
10,00
0,00
Da
y
1
Da
y
Da 2
y
3
Da
y
4
Da
y
5
Da
y
6
Da
y
7
Da
y
8
Da
y
9
Da
y
1
Da 0
y
11
Da
y
1
Da 2
y
1
Da 3
y
1
Da 4
y
1
Da 5
y
1
Da 6
y
1
Da 7
y
1
Da 8
y
1
Da 9
y
2
Da 0
y
Da 21
y
2
Da 2
y
2
Da 3
y
2
Da 4
y
Da 25
y
26
they still have concerns. They have to be
Participation in %
ses have been totally anonymous and no
Day
next one would be in 2006.
32 |
| 33
Discussion
Discussion
8. Discussion
Over the five year time frame covered by this
By the second round of the survey, the process
How can these changes best be sustained? It is
case study, Henkel was on a continuous lear-
was a more familiar one. Internal Henkel facilit-
obvious that changes do not come by finger-
ning curve. This effort began as an attempt to
ators, trained during the first round, were very
snapping. However, they can be sustained by
create an alternative to a traditional employee
familiar with the survey and the process.
constantly addressing the issue or area of im-
attitude survey, but has grown to become a
Leaders were better able to integrate the survey
provement, in the first place. Secondly, diversity
strategic tracking tool that closely monitors the
feedback and action planning process with other
in terms of the progress helps to sustain changes
human capability of the organization. One part
planning activities. Thus, they were able to use
targeted.
of this story is the technical evolution of the
the tool as a means to better manage their orga-
survey from a custom-made, individually focu-
nizations rather than as a separate activity in
What approach to feedback and planning is
sed, paper and pencil survey that was not
itself. They began to see the survey as a recur-
most likely to make a lasting improvement in
benchmarked, and reported only raw scores,
ring process that created a sense of accountabi-
the business? Improvements, and lasting ones at
to a survey rooted in a research-based model,
lity for the capability of the organizations that
that, have to do with measuring and showing
benchmarked and delivered online, with gra-
they managed. On-going research into the
the gap versus the plan. This means that the
phic reports that are immediately delivered to
change process also began to give answers to
survey has to measure the status on a regular
individual managers through an on-demand
crucial questions about managing change.
basis and then follow through a process of intensive discussion of the areas of improvement.
system. Henkel formed a close partnership
with their provider to co-create a system to
One important observation made over the pro-
serve their growing needs.
cess that proved that respondents clearly real-
What type of support do managers need to guide
ized the potential of the survey and its findings
them through this process? Management needs
But the second part of the story is the part that
to help improve leadership capacities and per-
to understand the cultural driver. This is the
will have a far more lasting impact on Henkel.
formance of the respective units was the ap-
most important lever for making the survey a
This part focuses on how Henkel learned to use
proach to answering the questions of the survey:
success and guiding managers through the pro-
the survey results and the survey process to
one might assume that in a second round
cess. HR as partner of management still gives
continuously improve the capability of the orga-
respondents tend to give answers in a way that
valuable support by delivering insights and so-
nization. The first year, this part began with the
they might feel "conforming" to expectations (of
lutions.
simple objective of reporting the survey results
top management or questioner). This did indeed
back to the Management Board. From there,
not happen at Henkel: answers tended to be-
The third round of the survey included an exten-
Henkel began an extensive feedback and action
come even more honest, pinpointing deficits
sive communication process prior to the survey,
planning process that involved over 400 wor-
honestly and thus showing that a real interest
reinforcing the purpose of the project and great-
king groups. The groups focused on both their
in improvement was desired by the respondents.
ly raising awareness of the importance of the
own results and the results for the company as a
culture of the organization to the business
whole. Research on this process shows that the
Which parts of the organization changed most
results. This awareness has also underscored
effort put into the feedback and planning pro-
quickly in response to the problems that were
the obligation of individual leaders to make their
cess is reflected in the year-to-year improvement
identified? In retrospect, those parts of the com-
contribution by building the future Henkel cul-
in the organization.
pany changed most quickly whose leaders took
ture in their own areas of responsibility. All of
the results as a personal challenge to improve
these lessons have helped Henkel position this
leadership.
as a strategic tool to increase their competitiveness for the future.
34 |
| 35
References
The authors
References
The authors
Denison, D. (1984). "Bringing corporate culture
This set of references gives an overview of the
Dr. Daniel Denison is Professor of Management
Science, Organizational Dynamics, The Journal
to the bottom line." Organizational Dynamics
main research papers and books that support
and Organization at the International Institute
of Organizational Behavior, Human Resource
13(2): 4-22.
the model used by Henkel. For more informa-
for Management Development (IMD) in
Management, and Policy Studies Review.
tion, please visit www.denisonculture.com.
Lausanne, Switzerland. Previously, he was an
Denison, D. (1990). Corporate culture and orga-
Associate Professor of Organizational Behavior
Professor Denison's research, teaching and con-
nizational effectiveness.
and Human Resource Management at the Uni-
sulting focuses on organizational culture and the
New York: John Wiley & Sons.
versity of Michigan Business School. He has
impact that it has on the performance and effec-
taught and lived in Asia, Europe, Latin America
tiveness of organizations. He has consulted with
and the Middle East.
many leading corporations regarding organi-
Denison, D: (2000). "Organizational culture:
Can it be a key lever for driving organizational
zational change, leadership development, and
change?" in S. Cartwright and C. Cooper. (Eds.)
Professor Demison has written several books.
the cultural issues associated with mergers &
The Handbook of Organizational Culture.
He is also the author of the Denison Organi-
acquisitions, turnarounds, and globalization.
London: John Wiley & Sons.
zational Culture Survey and the Denison Leadership Development Surveys. These surveys and
At IMD, Prof. Denison is primarily involved in
Denison, D., Haaland, S, and Goelzer, P. (2004).
the underlying models have been used by over
"Catalyst" programs with companies that are
"Corporate culture and organizational effective-
3000 organizations and are the basis of several
members of IMD's Learning Network. These
ness: Is Asia different from the rest of the
on-going research projects. His writings have
custom-designed programs are targeted to trans-
world?" Organizational Dynamics, 33(1),
appeared in a number of leading journals inclu-
form the organizations and the individuals who
98-109.
ding The Academy of Management Journal, The
lead them, and are designed to meet the
Academy of Management Review, Organization
challenges the companies face.
Rolf Schlue graduated from the University of
result orientation (market shares, net sales and
Denison, D. and Mishra, A. (1995). "Toward a
Karlsruhe, Germany, and has been employed by
profit contribution) his approach in dealing with
theory of organizational culture and effective-
Henkel since 1978. Through the years he has
HR is different. His past experiences in these
ness." Organizational Science 6(2): 204-223.
been responsible for several functions in the
other areas of the business helped to lead the
FMCG, Research and Human Resources areas.
changes that he initiated starting in 2003. One
Denison, D. and Neale, W. (1996). Denison orga-
Currently he holds the responsiblity as Corpo-
example is the move from satisfaction surveys
nizational culture survey. Ann Arbor, MI: Aviat.
rate Vice President for Global Human Resource
of the past to the more performance oriented
Fey, C. and Denison, D.R. (2003).
Management of the Purchasing, Infrastructure
cultural surveys, which establish a link between
and Human Resource organization along with
business performance and cultural traits, both of
"Organizational culture and effectiveness:
Corporate HR responsibility in the MENA
which are more meaningful to the company's
Can an American theory be applied in Russia?"
region. As his main areas of competence have
overall performance.
Organization Science 14(6): 686-706.
been in marketing, sales, customer focus and
Denison, D., Lief, C., and Ward, J. (2004).
"Culture in family-owned enterprises:
Recognizing and leveraging unique strengths."
Family Business Review, 17(1), 61-70.
36 |
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ein ne
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rh a l t e
Foto e
| 37
n.
Publications
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Corporate Culture
Bertelsmann Stiftung (ed.). Corporate Cultures
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in Global Interaction - Experiences in Business.
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Ein Management-Handbuch. Gütersloh, 2006
Evaluation, Improvement: Success through
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Corporate Culture, Gütersloh 2006.
Corporate Health Policy
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Unternehmenskulturen in globaler Interaktion -
Badura, Bernhard, Münch, Eckhard, Ritter,
ren. Erfolg durch Unternehmenskultur. Ein
Ein Leitfaden für die Praxis, herausgegeben von
Wolfgang. Partnerschaftliche
Leitfaden für die Praxis, Gütersloh 2006 (bro-
der Bertelsmann Stiftung, Gütersloh 2006
Unternehmenskultur und betriebliche
chure)
Gesundheitspolitik. Fehlzeiten durch
Blazejewski, Susanne, Dorow, Wolfgang.
Bertelsmann Stiftung, Assessment, Evaluation,
Motivationsverlust. Gütersloh 1997.
Corporate Cultures in Global Interaction - A
Improvement: Success through Corporate
Management Guide, ed. Bertelsmann Stiftung,
Badura, Bernhard, Hehlmann, Thomas.
Culture. Recommendations for the Practice.
Gütersloh 2007
Betriebliche Gesundheitspolitik. Der Weg zur
Gütersloh 2006 (brochure)
gesunden Organisation. Berlin 2004.
Sackmann, Sonja A. Toyota Motor Corporation -
Sackmann, Sonja A., Bertelsmann Stiftung,
Eine Fallstudie aus unternehmenskultureller
Bertelsmann Stiftung, BKK Bundesverband
Success Factor: Corporate Culture, Developing a
Perspektive, ed. Bertelsmann Stiftung, Gütersloh
(eds.). Guide to Best Practice. Driving Business
Corporate Culture for High Performance and
2005.
Excellence through Corporate Culture and
Long-term Competitiveness, Gütersloh 2006.
Health. Gütersloh 2005.
Imprint
Corporate Social Responsibility
Bertelsmann Stiftung, Hans-Böckler-Stiftung
Bertelsmann Stiftung (ed.). Promoting Cultural
Bertelsmann Stiftung, Die gesellschaftliche
(eds.). Erfolgreich durch
Published by:
Identity in the Age of Globalization - A German-
Verantwortung von Unternehmen.
Gesundheitsmanagement, Beispiele aus der
Bertelsmann Stiftung
Egyptian Experience. Liz Mohn - A Cultural
Dokumentation der Ergebnisse einer
Arbeitswelt. Gütersloh 2001.
Carl-Bertelsmann-Straße 256
Forum Volume I. Gütersloh 2002.
Unternehmensbefragung der Bertelsmann
Stiftung, Gütersloh 2006 (brochure)
33311 Gütersloh
Bertelsmann Stiftung, Hans-Böckler-Stiftung
(eds.). Zukunftsfähige betriebliche
Responsible:
Globalization on Cultural Identity in Business.
Bertelsmann Stiftung, Partner Staat? CSR-Politik
Gesundheitspolitik. Vorschläge der
Gabriele Schöler
Liz Mohn - A Cultural Forum Volume II.
in Europa, Gütersloh 2006 (brochure)
Expertenkommission. Gütersloh 2004.
Bertelsmann Stiftung (ed.). The Impact of
Design:
Gütersloh 2003.
Bertelsmann Stiftung, Verantwortung neu den-
Hollmann, Detlef, Lühmann, Dagmar. Die per-
Bertelsmann Stiftung (ed.). Corporate Cultures
ken - Unternehmen im Dialog, Gütersloh 2006
sönliche Gesundheitsbilanz. Checkups für
in Global Interaction. Liz Mohn - A Cultural
(brochure)
Führungskräfte. Gütersloh 2006.
Nicole Reinisch
© 2007
Forum Volume III. Gütersloh 2003.
38 |
| 39
Thema | Lorem Ipsum ut wisi
Contact:
Bertelsmann Stiftung
Gabriele Schöler
Carl-Bertelsmann-Straße 256
33311 Gütersloh
Phone: 0 524 81-81190
gabriele.schoeler@bertelsmann.de
www.unternehmenskultur.org