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Culture Series: How 3 Companies Built Their Corporate Cultures
This month, Talent Management profiles three companies that have established strong corporate cultures.
June 19, 2016 by Sarah Fister Gale
Having a great corporate culture is one of the most important factors for talent retention and engagement — but building one isn’t as easy as it sounds.
“Over the past 10 years, there has been an increasing awareness of the importance and power of corporate culture,” said S. Chris Edmonds, CEO of The Purposeful Culture Group in Denver and author of “The Culture Engine.” Still, business leaders often have a misperception of what building a strong culture looks like.
“It’s not about improving your processes or getting better people,” Edmonds said. “It’s the way people treat each other and how things get done.”
Indeed, 87 percent of organizations cited “culture and engagement” among their top challenges in a Deloitte 2015 “Culture and Engagement” report, with half call the problem “very important.” Culture’s importance is especially prevalent among millennials, the biggest and youngest generation in the workforce and one that puts corporate culture at a premium. It is a generation also willing to write openly about companies’ cultural shortcomings on employer reviews websites like Glassdoor.
Even as leaders say culture is important, dealing with the day-to-day business often takes precedent over culture building — an ambiguous task that many leaders hope will take care of itself. Most of the time, however, hoping culture takes care of itself is a recipe for conflict, infighting and negativity. “People do what they are reinforced to do, and if there are no ground rules, the most assertive people create the culture that works for them,” Edmonds said.
There is no blueprint for a good corporate culture, and every company will define it differently depending on its business. Nevertheless, if business leaders take the time to work with their people to understand what they view as a great corporate culture, they can build an environment where people feel motivated, engaged and proud.
Stay tuned to Talentmgt.com as we highlight three companies that have made strides in building strong corporate cultures.
Culture Series: Cisco Makes a ‘People Deal’
The first of a three-part series, Cisco’s revamped culture came from the work of two tireless employees and a strong dose of reality.
June 21, 2016 by Sarah Fister Gale
Cisco Systems Inc., the 32-year-old global technology company based in San Jose, California, has more than 70,000 employees in more than 140 countries. Yet, it took just two employees working on their own initiative to change the way the corporate culture is perceived throughout the organization.
Chief People Officer Fran Katsoudas has been with Cisco for 20 years, and from the beginning, there has always been three pillars of culture: focus on the customers, employees and overall organizational success.
But 18 months ago, the company started talking about culture in a different way. It began when two communication and human resources employees based in Europe decided that the culture at Cisco wasn’t living up to its potential. So they started doing research, first on their own and later with their local manager’s support. They hosted employee focus groups across Europe, the Middle East and Africa to see what other employees thought of the Cisco culture and what needed to change.
When their manager brought the data to Katsoudas last August, she knew that it was important and gave them further support to run focus groups in the U.S. “No one asked them to do this, but what they came up with was a powerful representation of what our employees wanted to culture to be,” Katsoudas said.
Within three months, she invited them to share their data on the state of the company’s culture in a 100-slide presentation to Cisco’s HR leaders from across the company. The results were hard to swallow. “It was like getting punched,” Katsoudas said. “It was hard to sit through, but it was good for us.”
The first 70 slides focused on where the culture was falling short. It covered things like the need for teams to be able to take more risks and to know it’s OK to make mistakes, as well as the desire for a culture that emphasizes shared success on teams vs. individual accomplishments. Finally, the last 30 slides focused on the solution.
What emerged from the presentation was “The People Deal,” a companywide culture change initiative, complete with a manifesto based on three new pillars: “connect everything,” “innovative everywhere” and “benefit everyone.”
“The People Deal encourages all employees, from engineering to marketing to IT, to be innovative in their roles and to contribute toCisco’s overall goal of connectingpeople,” Katsoudas said.
As a result of the new culture initiative, leaders are now actively seeking feedback from employees. They are also using employees’ interests to drive activities, like revamping theCiscooffice space, guaranteeing pay parity and giving employees paid time off to volunteer in social programs of their choice, rather than limiting volunteerism to company-driven causes.
The company has also implemented new career development programs, including “Time Swap/Job Swap,” which allows employees to either swap up to 20 percent of their time with another individual for a defined period or swap roles for a limited time.
“This enables our people exposure to another part of Cisco’s business, while also helping them develop their own skills and bring innovative thinking and ideas to programs and among broader teams.”
It would have been easy for Cisco to ignore the cultural musing of a couple of employees. Instead, they listened to what they had to say, and it has changed the way Cisco thinks about its people.
“Early on, we thought the culture would thrive on its own, but we’ve learned that it doesn’t work that way,” Katsoudas said, adding that companies have to nurture their culture, whether they are a small start-up or a Fortune 100 firm, and they to involve employees in those conversations. “Asking who we are on our very best day is a great place to start.”
Culture Series: Starting From Scratch TVRunway
The second in Talent Management’s three-part series, the CEO of this tech startup used lessons learned her previous company to shape the new corporate culture.
June 21, 2016 by Sarah Fister Gale
In 2009, Terena Bell was CEO of In Every Language, a then-4-year-old translation services company in Lousiville, Kentucky, with a handful of employees and hundreds of freelance translators. The company was growing, and she felt like it was time to formally define the corporate culture. So she pulled the in-house staff into a half-day workshop to define who the company would be if it was a person.
At first, employees thought “southern” was a good descriptor, but Bell quickly realized it was too nebulous. “I meant ‘high performing and a little formal,’ while others thought it meant ‘methodical and not rushed,’ ” she said. Eventually, they narrowed the culture down to words they could agree on, including professional, intelligent, insightful and inclusive.
“Those words became the fabric of our culture,” Bell said. They shaped how employees behaved, whom they hired and the way they communicated with clients and each other. “It gave us a clear brand identity.”
That culture remained consistent for the next seven years. Then Bell sold the company last March. Now, she has a new company, TVRunway, a technology firm that lets users click on things they like in TV shows and buy them online.
Bell wanted to apply the lessons she learned about culture to her new company, but she didn’t have the history to rely on. The new firm was also very different from the old one, so she couldn’t just transplant the old culture.
TVRunway is a Manhattan-based tech company made-up mostly of software engineers in a highly competitive space. So words like “southern” and “inclusive’ didn’t really fit the mold. As a result, Bell went looking for shared interests among her core team that might tie back to the business. She discovered that many of them — herself included — majored or minored in physics in college. Many of them also read and loved Joseph Campbell’s “Hero with a Thousand Faces,” an exploration of the hero in world mythologies.
These two connecting themes gave her the thread for a new corporate culture. It also gave her a way to drive the company’s philosophies about customer experience and user interface design. “It’s still a work in progress, but it’s built around the idea that we are highly logical problem solving story tellers,” Bell said.
Bell said you have find commonalities that tie back to the business to build the foundation of a strong corporate culture, then go from there. “Don’t be afraid, and don’t put it off,” she said. “You culture shapes what your business becomes.”
Culture Series: People Come First at DaVita
The final profile in Talent Management’s three-part culture series, health care company DaVita pulled itself from the brink of bankruptcy by building a culture of community.
June 22, 2016 by Sarah Fister Gale
Sixteen years ago, DaVita Healthcare Partners Inc. was headed for crisis.
The company was near bankruptcy, and in an effort to turn things around, new CEO Kent Thiry decided to rebuild the corporate culture around people rather than processes. The new culture, dubbed “The DaVita Way,” is unique in that Thiry wanted to create a community where employee fulfillment came first and the business was there to support that community — not the other way around.
“We say the community is first and the company is second,” said Dave Hoerman, whose role as chief wisdom officer was created as part of the transformation. “It’s my job to guard the culture and to be the architect of change.”
Hoerman spends his days checking in with the company’s 65,000 employees, sitting in on meetings, watching behaviors and reminding teams to stay true to the tenets of The DaVita Way. He recently sat in on a two-hour meeting where after the leaders dove right into business. He stepped in and suggested they all take a few minutes to say hello and catch up. “It took five minutes, but afterward everyone felt grounded and the work still got done,” Hoerman said.
Hoerman has also helped develop more than 20 “village programs” to support the culture, including the DaVita Village Network for employees in crisis, where teammates offer support, company-matched funds and their own paid time off to help others in need. Another program, “DaVita Camp Courage,” allows employees who’ve dealt with cancer to come together to face the disease, share their stories and support each other.
Hoerman is quick to note that none of these programs have a measurable return on investment. “It is just what a good community does,” he said. And that is a key the differentiator of The DaVita Way. “If you say ‘community first,’ then look for bottom-line impact, people will see your intentions, and it will backfire,” he said.
However, there have been many business benefits to investing in the community culture, including increased retention and the ability to attract top talent. “When people hear about this, they want to be a part of it,” Hoerman said.
Profitability is also important. “We need to be profitable to pay for the community,” he said. And when profitability is down, Hoerman isn’t immune from cost cutting. But rather than ditching culture programs, he looks for ways to cut costs without losing effectiveness, such as lowering food costs for parties, or switching from in-person to virtual meetings. “Every year, I look at the cost and participation in every program to make sure we are behaving responsibly.”
It may sound touchy-feely, but the results are notable. Since rolling out the new culture, DaVita’s stock price has climbed from roughly $2 a share in 2000 to $70 a share as of March 2016. It has also expanded from 500 to 2,200 dialysis centers and has been on Fortune’s “Most Admired Companies” list every year since 2006.
Moreover, employee engagement surveys also show that the company ranks higher than benchmark standards for the health care industry across multiple categories.
It’s been so successful that Hoerman’s team now hosts workshops for executives from other companies interested in copying their community-based culture, though some of them balk when they see what it involves.
“They come in excited and eager to make changes, until they realize how much time and money it requires,” Hoerman said. “That’s when we lose people.”
Building an intentional culture requires time, resources, commitment and courage. “You have to have the will to invest in it and to support it even when times are tough,” he said. “That is the only way it will work.”