Online community creates new, edgy culture

Employee involvement, communication key for success at Kinaxis
By Amanda Silliker
|Canadian HR Reporter|Last Updated: 06/12/2012

A total transformation: John Sicard, COO of Ottawa-based Kinaxis, spoke at a recent Strategic Capability Network event about how the company completely transformed its business and culture.

Kinaxis story holds 4 critical lessons for HR (Strategic capability)

New ways of thinking, interacting (Leadership in action)

Be transparent with your changes (Organizational effectiveness)

In 2007, after being in business for about 20 years, Kinaxis underwent a major transformation.

With the goal of growing faster and gaining more value, the software company completely changed what it sold, how it sold and who it sold to, said John Sicard, COO of the 200-employee organization based in Ottawa.

“We had to differentiate ourselves. We were competing with some pretty large competitors and we found ourselves competing under their terms, not our own,” he said.

On a daily basis, the company got into the ring with some very big competitors. While Kinaxis was seeing some surprising gains in its professional services, its software sales were sliding and software maintenance was only growing marginally — not a healthy trend, said Sicard, speaking at a Strategic Capability Network (SCNetwork) event in Toronto in January.

“We realized for us to actually win more and grow, we had to change our approach.”

The company decided to make several business changes including shifting the software to: subscription from perpetual, on-demand from on-premise and configured from custom.

In 2003, Kinaxis had attempted a similar transformation that was unsuccessful. After the executive team explained the company was shifting to subscription software from perpetual, they went back on their word and approved a perpetual software sale for one employee — which quickly snowballed to many other employees, said Sicard.

“Pretty soon, you’re slipping and you can’t hold it, you just can’t,” he said. “By far, the very biggest lesson of all lessons we’ve ever learned: Don’t blink. We blinked once and we knew to make this work we couldn’t blink again.”

Fundamentally changing the business — and implementing all the changes at the same time — required support from all employees because it affected every single department in the organization, said Sicard.

Since people are often uncomfortable with change, the executive team had to be prepared for resistance and figure out a way to gain employee support.

“We set the plan in motion, but it’s the employees who actually go and do the work,” said Sicard. “You’re handing them hard work to do and they better believe in what they’re doing. If their hearts aren’t in it, they’re not going to do as good of a job.”

To get employees behind the new plan, Kinaxis involved them in the new vision for the company. It created an online community shaped by four key pillars — learn, laugh, share and connect — that became anchors to the new company culture, said Sicard.

Kinaxis also hired a community manager to help transform employees and get them used to being social.

“That was a big part of our cultural shift. (We were) very enterprise-focused, closed doors, everything is very, very serious — and developers never come out,” said Sicard. “But we had to change the way people thought about this.”

Kinaxis even offered financial incentives for any employee who would contribute to the website. They were encouraged to be provocative, but respectful, bold and edgy in their comments — because that’s how you get people talking, said Sicard.

The online community is “fearlessly open” with a lot of information about the company being shared on the site and membership open to anyone, he said. It currently has 5,900 members and is growing every day.

In keeping with this new, edgy brand, Kinaxis developed its own TV show called the Late, Late Supply Chain Show — staring employees — along with a video comedy series called New Kinexions.

“When you move into the social world, you’d be surprised at how many individuals that work for you would love a platform for their personality. We really support and nourish that,” said Sicard.

The company also hired a Hollywood studio to develop a six-episode comedy series called Suitemates that had nothing to do with Kinaxis, but was for comedic value alone, he said. It ended up being a huge Internet success and won awards for social marketing.

“Marketing people love to communicate so it was great for brand awareness,” said Sicard. “When they saw this, Google went crazy and everyone said, ‘Kinaxis, those are the guys who did this crazy video.’”

The website was also revamped to reflect the new culture, which included changing the title of a video from “Stuff Happens” to “Sh*t happens.”

“Everyone went, ‘We can’t have that on our website,’ and we said ‘Yes, we can because that’s what people think — it’s edgy and it’s OK,’” said Sicard.

“We modernized the website, changed our voice. Rather than sounding like a big tech library, we really started to speak in a more conversational manner.”

The HR department was affected by the change in many ways but the biggest shift was in how it screened candidates and determined fit, said Sicard.

“In the past, we might have been hyper-focused on a potential employee’s fitness from a technical know-how skill-side of the equation and, of course, we’re still looking for ‘Will they work well in a team?’ but now (we look at) ‘Will they thrive under this culture?’”

Ongoing communication with employees was a key aspect in how Kinaxis survived the transformation, he said. The company’s CEO “errs on telling everything” — through newsletters, one-on-one sessions and town-hall meetings — so employees can really understand what’s going on at the organization.

“We were completely open and honest with everything we did. If things didn’t work, we shared that — we weren’t afraid to discuss failures, if you will,” said Sicard.

“If we hadn’t have been that open with our base, we might have lost some trust and when you lose trust, you lose participation; you lose participation, you lose success.”

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Kinaxis story holds 4 critical lessons for HR (Strategic capability)

By Karen Gorsline

The Kinaxis story of what worked and what didn’t — as the software company executed an aggressive set of business strategies to generate innovation, growth and business expansion — contains a number of important lessons for HR.

Know the business: Kinaxis understood where it excelled and where it had gaps. How many HR functions have deep expertise in their offerings, know their gaps and have the business savvy to package their offerings to establish credibility and support for the function while contributing to business outcomes? An intimate, holistic view of what HR can do to add value is required to support organizational strategic change.

Dance to your own tune: Kinaxis decided to change the game to its advantage and refocus on the mid-market segment because of growing competitive pressure for large accounts from larger providers. By setting and following its own course, Kinaxis was able to experiment and reinvent itself. At different stages in the life cycle, HR will face different demands and challenges. To succeed, it needs to understand what common solutions can be imported and what solutions need to be crafted internally.

Change requires mistakes: Kinaxis made mistakes but it acknowledged and learned from them. Experimentation is key to moving forward — sometimes it results in breakthroughs but more often it results in failures. Kinaxis was transparent with its strategy, its miscalculations and its need to make adjustments.

HR often uses pilots for new approaches or programs but mistakes are often not identified, acknowledged or addressed. HR needs to embrace transparency and find ways to build the support of the business and governance structure to tolerate experimentation and learning while managing risk.

Bigger not always better: As a smaller organization, Kinaxis was able to stay connected, get feedback and make timely adjustments.

It was also easier to see the various pieces of the business process as being integrated. And Kinaxis could connect with those in the organization as people they knew and as contributors. This is not easily available to large organizations with diverse products, locations, processes and programs.

HR often addresses large-scale operations in ways that negatively impact HR. First, HR will resort to central program or product development with a corporate rollout. Such rollouts ignore the specific needs of units, segments or individual employees and offer limited flexibility for tailoring and adapting. This can increase dissatisfaction levels and hide serious issues that could more easily surface and be addressed in a smaller organization.

Second, people become numbers and are reduced to those supporting or opposing the change rather than people with names, personalities, knowledge, experience and legitimate concerns. This view of people limits the potential for innovation and growth. The challenge is determining how HR can help larger businesses and also reap the advantages of smaller organizations.

Karen Gorsline is SCNetwork’s lead commentator on strategic capability and leads HR Initiatives, focused on facilitation and tailored HR initiatives. She has taught HR planning, held senior roles in strategy and policy, managed a large decentralized HR function and directed a small business. She can be reached at gorslin@pathcom.com.

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New ways of thinking, interacting (Leadership in action)

By Trish Maguire

We can’t solve problems by using the same kind of thinking we used when we created them. Albert Einstein said it and John Sicard, COO at Kinaxis, proved it when he revealed his company’s story about transformational change.

It was ultimately grounded in new ways of thinking, perceiving and interacting by people. With about 200 employees, a six-year average tenure, four per cent voluntary resignation rate and an employee satisfaction survey result of 85 per cent to 90 per cent, Kinaxis has earned the right to shout: “We did it our way.”

Over a period of five years, the leadership team mastered the art of making the shift from reacting to innovating. It radically changed what it sold, how it was sold and who it was sold to. This was a bold, radical and risky strategy and it confirms how, once a leadership team sees the larger picture, it’s possible to mobilize a team’s imagination, commitment and perseverance to develop and deliver an entirely different business model.

To overcome the perceived David and Goliath relationship with its competition, Kinaxis — in the role of David — had to reshape its future.

To improve the growth rate and profitability of the company, the crucial factors the leadership team put into action were strategic alignment, fostering an innovative and ownership culture, and a deep commitment to building external and internal relationships.

Every leader can take some practical lessons from Kinaxis’ tale — including focusing on relationships and communication abilities in order to build organizational capacity and an organizational culture based on trust, respect and collaboration.

A further lesson of equal importance for any leader is realizing the power that can be achieved through steadfastly practising connections between strategy, culture and innovation.

If you genuinely want to build a progressive, sustainable and profitable organization, the Kinaxis story is a strong reminder an organization’s culture can outperform strategy and leadership when it comes to success or failure.

Edgar Schein, a professor of management at the Massachusetts Institute of Technology (MIT) in Cambridge, Mass., and a recognized expert on organizational culture, emphasizes the importance of leaders “understanding” organizational culture.

Two questions leaders should ask themselves are: “What is our organizational culture?” and “What do we need to start doing differently to build a great organizational culture?”

Trish Maguire is a commentator for SCNetwork on leadership in action and founding principal of Synergyx Solutions, focused on high-potential leadership development coaching. She has held senior leadership roles in HR and organizational development in education, manufacturing and entrepreneurial organizations and can be reached at synergyx@sympatico.ca.

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Be transparent with your changes (Organizational effectiveness)

By Barbara Kofman

All organizations go through change in order to survive and, ultimately, thrive. But, in the end, it’s how that change is implemented that differentiates and determines the degree to which it’s successful.

It’s common in too many organizations to have a culture at the top that promotes keeping the “why” and “how” behind changes under wraps. But doing so inevitably produces consequences and negatively affects the return on investment.

Kinaxis is a small, though growing, organization. It applied big ideas to how it approached the dramatic change it wanted to make to its business model.

One of the most important insights of COO John Sicard and his executive team was recognizing the importance of anticipating employe resistance and putting strategies in place to address it. On this front, they were largely successful, by implementing a sound communications plan grounded in openness and honesty.

They used multiple platforms for communicating with staff and continued to use these strategies well after implementation, having embedded them into the new corporate culture.

Marketing was also a big part of the transformational plan and it changed the Kinaxis corporate image from one that mirrored its competitors to one that was edgy and memorable.

This was about taking educated risks that, for the most part, paid off big time. Along the way, Kinaxis ingeniously differentiated itself from competitors and created a special niche in the marketplace.

Sicard outlined a number of the lessons learned, the most compelling being “Don’t blink.” When a clearly thought out vision has been articulated, it’s critical to stay true to it, no matter what entices you to backtrack. This doesn’t mean there won’t be any mistakes made along the way. Re-evaluating strategy is inevitable but it means not deviating from the end goal.

Accepting that mistakes will happen and sharing what has been learned contributed greatly to the success of the Kinaxis change initiative.

It’s an important reminder for organizations that failure is not about the people behind the decision but about one decision or event and the real failure is in not acknowledging it and communicating the learning.

Barbara Kofman is SCNetwork’s lead commentator on organizational effectiveness and founding principal of CareerTrails, a strategic coaching and HR Solutions organization focused on enabling individuals and organizations to resolve their work-related challenges. She has held senior roles in resourcing, strategy and outplacement, and taught at the university and college level. Barbara can be reached at 416-708-2880 bkofman@careertrails.com.

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