EVANZ Conference 2013
The link between culture
(“Fluffy Shit” and “Warm Fuzzies”) and
Productivity and Profit (“the real stuff”)
Today's outline
Background engagement “the outcome of good
culture” and disengagement
Talk through our change & insights
Leave you with some personal reflection & answer
your questions
Would you like these results?
37% improvement in absenteeism
25% lower turnover
48% decrease in H&S incidents
28% less shrinkage (loss)
10% increase in customer metrics
22% improvement in productivity
21% improvement in profitability
What engagement isn’t
Fluffy Shit & Warm Fuzzies – I don't think so – its about being good
to those that deserve it and tough on those that need it
If any of your leaders think culture is “fluffy shit” they’re part of the
problem and they’re costing your business
-most people leave their boss not their company-
What engagement is
A measure of whether your team want to give you their
“discretionary effort” to help your organisation achieve its
goals
The chasm between someone being “Great” versus “Just
OK”
A reflection of the culture and how effective the leaders are
What do engaged staff look like?
Demonstrate a high level of passion, enthusiasm and energy
Their behaviours help the organisation to be successful
Take a personal interest in the success of the organisation
Always looking for a better way
Readily volunteer for new projects
Hold a sense of loyalty towards the organisation
Speak positively about the organisation thereby strengthening the organisations
reputation and employment brand
Defend the organisation (internally and externally)
Disengaged people look like?
The organisations detractors
Openly speak poorly of the organisation and its leaders
Just going through the motions
Always finding the problem not the solution
“Sorry – not my job”
Quit yet stay
= very undesirable in the workplace (toxic)
The worst statistic of all...
Research shows more than 60% of the disengaged
say they don’t plan to move on in the next 12
months
Disengaged people are going to stay (if you let
them)
What drives engagement?
Having leaders worth following
A sense of fairness and equity
A personal understanding of :
1. What’s required (What must I do),
2. What's the purpose (Why is it important to do), and
3. The skills and knowledge to do it (capable, competent
and confident)
Our Culture & Engagement
2007 – our current HR manager was employed
Findings around that time were:
• largely disengaged team
• no sense of loyalty and high incidents of dishonesty
• lack of sense of pride and purpose
• Blame culture
• limited training opportunities
• high turnover
Culture & Engagement History
2008 - 2011
• HR Manager got commitment by management to conduct engagement
survey (Best Workplaces Survey) to seek insights
• change in style of HR began (from internal police to business and culture
development role)
• management team having recognised the need for change tasked the HR
Manager to solve the issues (however no significant increase in resources
or budget)
• group profit reduced by approx 50% over 4 years (in part GFC)
Culture & Engagement History
2011
• still lacking major traction on culture change
• largely the HR team led change “people issues were the HR teams
domain” – lack of ownership
• HR Strategy was right but execution reflected the wider organisation
culture (head office led – top down)
• Good ideas still met with cynicism and suspicion by many
• Performance reviews had been conducted but behavioural measures
didn't exist
• Culture change across the business was required (“this is not just an HR
team issue”)
Mission Critical downsides
Culture / People (2011 review)
•
Toxic – actively disengaged
“Too many in these categories, we’re not dealing with or getting rid of”
•
•
Non-performance management (lack of consequences)
Lack of skill and ability at manager level
“we’ve employed Supervisors, we need Leaders”
•
•
Getting to the 497th person – we don't have a method to reach him/her
Achievement not rewarded on par or ahead of tenure
(annual pay rate increases, 10/15/20 year clubs & no performers club)
•
•
We tolerate / accept dead wood – “Are we waiting for God”
Silos – especially in business planning and decision making,
“not involving key people in key decisions is impacting on key decisions and engagement/ownership of the
issue”
•
Appraisal system not working, not measuring key outcomes –
“managers are not doing their job
to put pressure on people to perform”
The review’s results and change strategy were
shared widely with all staff....
“Thanks for telling us
how shit we are”
Previous Top Down Structure
CEO
Head Office Team
(HR, Marketing, IS, Finance & Accounts, Operations Support, Warehouse)
On Premise
Operations Manager
Off Premise
Operations Manager
On Premise Venue
Managers
Off Premise Retail
Managers
On Premise Staff
Off Premise Staff
On Premise Customers
Off Premise Customers
On Premise Staff
Off Premise Staff
On Premise Venue
Managers
Off Premise Retail
Managers
On Premise
Operations Manager
Off Premise
Operations Manager
Support Office Team
(HR, Marketing, IS, Finance & Accounts, Operations Support,
Warehouse)
CEO
Commercial Board
PLT Trustees
WLT Trustees
Leadership expected across all levels
Customer Focussed Structure
One Key Insight
Head Office became Support Office
“People Support a World
They Help Create”
Where did change come from?
“The Agents of Change”
From …………… To
High levels of staff
disengagement and low levels of
engagement
High levels of engagement
Drivers of shift:
 Values & Behaviours
 Internal Communication – Facebook etc.
 Excellence Awards “West’s Best”
 Leadership Development opportunities
 Increased staff training
 Effective talent recruitment and management brought in house
 Revitalised performance review system with meaningful measures
 Awareness that poor performance will not be
Tolerated
 Single vision / Vision updates / New brand
 Story-telling – Our West – identity
From …………… To
Focus on the recognition of tenure without
equivalent recognition of performance
Perception that non-performance accepted /
tolerated
High recognition of performers and
high levels of achievement
Non-performance managed out
 ‘10/15/20 year club’ dinner disbanded in favour of
performance recognition
 Excellence Awards (including People’s Choice)
 Monthly Values awards
 PRDs and online CSB performance review system
 Remuneration review = fairness
 Measured Tier 1 / Tier 3 departures
From …………… To
Unprofitable or declining venues
lacking investment
and drive
Property reinvestment plan
Venues rationalised and modern on-premise
profitable (reduction in losses)
 Total hospitality loss reduction programme “losses are no longer acceptable”
 Suburban bar model – ability to experiment and try new models
 Hard decisions made = Closure of some venues as part of strategy – without losing
engagement or confidence by sharing facts and figures
 The real financial story was told to all staff (profit, margins etc in simple terms and
diagrams)
What Did This Achieve?
Where’s the R.O.I?
“Nice” Awards
Most Improved Large Workplace
Engagement rose almost 7% - the largest jump they’d
seen since the survey began
Dale Carnegie International Leadership Award
Positive Outcomes
•
•
•
•
•
•
EBIT (pre-tax profit) = 350% of what it was in 2011
EBITDA (profit less depreciation) more than 200% of pre strategy figures
Free cash flow is 15x what it was in 2011
Staff turnover was almost 50% ; last month = 17%
Productivity - results are being achieved with 25% less staff
70% change in store managers, 75% change in hospitality managers, 30%
change in executive team
• Some trophies in the cabinet – external endorsements are important for our
brand as an employer of choice
Our Key Drivers
 Single vision / New strategy and new brand = “all noses pointing in the same direction”
Our West & “giving back” = identity/pride
 Values & Behaviours were developed by them, adopted by us, then measured, discussed
and celebrated (monthly awards)
 Internal Communication – Values nominations, Facebook page, Vision updates, birthday
cards, thank you & well done cards.
 dropped the tenure awards dinner and 10/15/20 year clubs in favour of the Excellence
Awards Dinner “West’s Best”,
 Leadership Development opportunities and training for all in leadership roles (including
360 behavioural assessment)
 Effective talent recruitment & management brought in house
 Performance review system with meaningful measures – 50% weighted on “how you do
the job”
What we learnt along the way...
Be relentless about your purpose and your message of
change
Over communicate x10
Motivation = Communication
Seek solutions from others
(your job is get the good ideas flowing)
Self Reflection
Am I a leader worth following?
Are those that lead in your organisation people
you’d like to follow?
If I was you from today...
Be aware many will not tell the boss directly
what they really think but commit to finding out
Get out if you’re not up to leading change – only do it if you can commit to doing it well
– assess those around you
Have the courage to seek out underlying issues & then initiate change and empower
them
Set aside the noise of the detractors and the dark side
Believe that “culture is critical” and make sure others know
“Culture without strategy is aimless,
however
Strategy without culture is powerless”
- Robert Burgelmann
simonw@thetrusts.co.nz
www.thetrusts.co.nz