CEOs Talk

CEOs’ role in transforming corporate culture
|Canadian HR Reporter|Last Updated: 06/12/2012

Building a healthy culture requires discipline, leadership and dedication – we talked to 5 CEOs from across the country to get their take on the issue.

Jack Lohman,
CEO, Royal BC Museum

The 130-employee, 126-year-old museum is based in Victoria

When he was CEO of Iziko Museums of Cape Town, an organization responsible for 15 national museums in South Africa, Jack Lohman had to deal with an unusual kind of drinking problem. Some employees were drinking the alcohol used to pickle valuable fish collected from across the continent.

It was both a wake-up call and a serious problem to find a staff member walking drunk down a passageway, he says.

In another incident, a staff member stabbed another while, another time, new carpets for a planetarium were stolen by employees.

That says something about the culture, and change was required, says Lohman.

“A culture of discipline was quite important, so policies on alcohol, drugs, et cetera,” he says. “We created a series of workshops to talk about the culture of the organization and then jointly produced a pocketbook of rules and regulations and values, et cetera, to help define that, ‘Respect is very important. A culture of respect, whatever your background, is critical.’”

As it was the post-apartheid period, there were also issues around diversity at the 580-employee museum, says Lohman.

“Clearly, there was a need to actually implement the law, the employment equality act, and ensure that actually the staffing in the South African museums reflected society. It was all-white, essentially, and it was actually all about re-profiling.”

The challenges might be different at the Royal BC Museum in Victoria — where Lohman became CEO in January — because people are extremely respectful to each other, he says, but the need for a strong culture remains.

Having been voted a top employer suggests the museum has a healthy culture, yet that also sets off warning bells with Lohman.

“It means that perhaps there hasn’t been a lot of change. It suggests a comfortable culture and that may be good but if you want to create more ambitious projects and push everybody…”

The 130-employee museum has a solid foundation and great potential to become a “unique cultural asset across the world,” he says, with an extraordinary location, collections and expertise.

And culture is the heart and soul of any employer, says Lohman.

“It’s clearly the spirit, the driving spirit of an organization.”

When he was director of the Museum of London for 10 years in the United Kingdom, there were issues around diversity and a staff that was risk-averse and in need of a spirit of entrepreneurialism. And while still new to Canada and his new role, Lohman says a spirit of learning is needed at the Victoria museum and the culture may need to better support managers with greater training.

“That will be quite interesting for an organization that… looking at it, doesn’t invest enough in developing its staff,” he says.

“It’ll be looking at a culture of ambition and a culture of risk-taking and wondering whether everyone is playing it very, very safe and I don’t think you get great bursts of creativity when you don’t take risks and you don’t create a climate of trying something out.”

In transforming culture, the CEO is a leader but he’s part of a team, says Lohman.

“If you don’t have leadership, you don’t have a role model, you don’t have examples to follow, it’s not going to happen — basically, you’ll retreat.”

And it’s the CEO who reminds the entire organization of the culture, which is why the role of communication is so vital and you can’t communicate enough, he says. “And you have to live your values, ultimately.”

HR plays a big part in that, says Lohman.

“I’m a great believer in having HR driving the conversation, reminding, prompting the CEO. So I really look to the HR department, very often, to be initiating and really nudging CEOs,” he says. “I probably couldn’t have done my job so effectively in London without the strength of HR.”

Elyse Allan, president and CEO, GE Canada

The Canadian subsidiary of the global infrastructure, finance and media company
is based in Mississauga, Ont., and has 7,000 employees

Corporate culture is fundamental to GE’s success, according to Elyse Allan, president and CEO of GE Canada in Mississauga, Ont.

“When you are a large multinational with also multiple businesses, as we are, I think the importance of the culture is that much more pronounced because it forms really a critical underpinning that ties all those disparities together, so it really becomes the glue that makes us GE.”

Culture incorporates a number of factors, such as what employees are like, what they value, the environment GE tries to create and connections to the community, she says.

“Overall, it’s really a culmination of the different beliefs and attitudes and values that we want our employees to share and that becomes the basis of norms and expectations for the company and really helps provide a framework for both behaviour and decision-making and for judgment.”

And if the culture isn’t healthy, it’s hard for a company to have sustained performance, says Allan, so gauging its success is about looking at trends in performance against a whole core group of metrics.

“When those metrics start to get missed, you start to question, ‘What are the causes?’ and if they’re happening in multiple areas across multiple functions, you get a very strong indicator that the culture isn’t working.”

Asking employees about their perceptions also reveals the health of the culture, she says. So 7,000-employee GE Canada does semi-annual surveys along with “pulse” surveys of segments of the population to find what’s working and what’s not. The leadership team also holds roundtables with employees to get their feedback and stay on top of any issues.

Aligning culture with GE’s vision and strategy starts with an annual global leadership meeting with its 600 top leaders (out of 300,000 employees worldwide). The chairman sets the tone for the next year, sharing feedback and looking back at the previous year to inform the incoming year, says Allan.

The meeting talks about where the leadership team needs to be, where the message is not being heard, what the market looks like and areas of emphasis.

“As everyone leaves that meeting, that’s immediately cascaded through all the business, everywhere, globally,” says Allan.

“That’s a really important way that we validate what the priorities are. We use the same words — everyone’s really trying to cascade through a consistent, well-understood and hopefully clearly articulated message right through the company, pretty quickly so it gets out there right away, with a level of intensity that keeps it fresh, keeps it relevant and has a sense of urgency to it, to the extent it’s driving change.”

Like all leaders, the CEO sets the tone and leads by example, she says.

“Ultimately, it’s all about how you as leaders behave and if your behaviour doesn’t reflect the values and the traits that we’ve said are critical to the culture, then that disrupts the whole process, it undermines the whole culture-building process.

“So, we have to ensure that the leadership team and those we’re developing as new leaders are very, very clear and understanding and reflecting in their actions of things we value and that there’s a continuity in that behaviour.”

HR also reassesses the company values every few years, she says. For example, it recently decided values don’t just need to be defined but described. So it’s not just about emphasizing inclusiveness but actually showing how a good leader behaves if he’s inclusive. And employees are assessed each year against those values.

“That way, we’re constantly trying to align and make sure that the vision and strategies for the company are constantly in line with the culture. And if we’re getting out of track because we’re doing it all the time, we can try and immediately get back on track.”

The role of human resources is also critical when it comes to corporate culture, says Allan. That means having a clear framework, having the systems and tools in place that help reinforce and support the communication around culture, along with training, compensation, talent assessment, recruitment and retention, and measurement against clear metrics.

“HR is a very critical, critical role in GE, a very well-developed function in GE and one that’s a core underpinning of the strength of our culture.”

Keith Dewar, CEO, Health PEI

The health services Crown corporation is based in Charlottetown and has 4,400 employees

Back in 2010, Keith Dewar took on the role of CEO of the newly formed Crown corporation Health PEI, which is responsible for the operation and delivery of publicly funded health services in Prince Edward Island.

Dewar had plenty of experience in leadership roles, having worked as vice-president of finance at Holland College in Charlottetown, CEO of the Provincial Health Services Authority in P.E.I., director for special projects at Veteran Affairs Canada and, most recently, deputy minister of P.E.I.’s Department of Health.

But his new role at the 4,400-employee Health PEI still presents plenty of challenges, particularly in bringing together the cultures of several regional health authorities.

“You have all of these different perspectives, different standards, different policies, different ways of working that all impact culture,” he says. “You can’t get there if you can’t then realign various organizational cultures, professional cultures to that goal… so you can never achieve where you really want to be unless you do that.”

Every organization has multiple cultures, says Dewar, and it’s about aligning those, with everybody having a consistent commitment, knowing where they are going as an organization, what they’re trying to achieve and their role in that.

“Culture is when people understand that almost intuitively, are committed to it and work effectively together to move it forward,” he says.

One particular focus at Health PEI has been on quality and safety for patients and employees.

“It’s so critical — you cannot achieve vision in an organization if you don’t align your culture to that,” says Dewar.

The health-care environment is always challenging, with budget cuts, changing demographics and a lack of services to meet demand, he says. So Health PEI has focused on resiliency as part of its culture. That means training and feedback to work through challenges that will always be there.

And that forms a lot of the basis for the HR work going on, says Dewar, as HR is key in providing leadership and support.

“They lead the survey processes and help us analyze it; they look at all the measures that demonstrate the health of our staff; they’ve got skill sets and they’re embedded across the organization so they support managers to give them the tools to better deal with staffing situations. They’re one of the glues that hold all of these pieces together, keep us connected to that,” he says, adding they also work with union partners. “We could never move an organization forward without a robust, competent HR staff.”

To assess the health of its culture, Health PEI conducts an employee survey every two years, along with a safety survey as part of its accreditation process. Informal evidence also helps, says Dewar.

“It’s not only the surveys you do but it’s also the conversations, anecdotal things you see occurring — there’s a number of things used to say, ‘You’re going in the right direction.’”

To align corporate culture with vision and strategy, branding or slogans “can be extremely powerful,” he says.

But the behaviour of the executive and the board is important too, so it’s “common themes and messaging and consistency that’s so critical.”

The CEO plays an important role in reflecting the expectations and helping with communications.

“It’s a matter of reinforcement,” says Dewar. “I do make sure I spend the time and provide the tools and work systems and support and structures and policies and the accountability that’s required to get the organization there and I keep my focus on that. That’s the role of the CEO — continue to align and make sure various tools and levers you have at the organization move it forward to stay aligned and deal with issues that are taking you off-track.”

Jim Nowakowski, president and founder, JNE Welding

The Saskatoon-based steel fabricator has 155 employees

About a dozen years ago, Jim Nowakowski, founder and president of JNE Welding in Saskatoon, was frustrated by a situation at work. There was bickering between project managers that had become very personal, and he didn’t feel he should have to intervene to tell adults how to behave.

But he realized he was wrong when an external consultant said that by doing nothing, Nowakowski could be seen as endorsing the behaviour.

“I really didn’t understand you had to be very intentional to develop a culture that’s healthy and what you want. If you aren’t intentional, it forms, whether you like it or not, and it’ll form just like anything else — always take the path of least resistance — and it’s not always the path you want to be on.”

So Nowakowski pulled together a cross-section of 25 people from the full-service steel fabricator for an off-site meeting to develop a code of conduct. It defined how people are expected to behave, what they expect from each other and what they want from the company.

“That was a major turning point,” he says, adding new employees going through orientation must go through that code and sign off on it.

Every company has a culture, whether they’re aware of it or not, says Nowakowski.

“The culture is the way we value things, our values, the way we behave, the way we treat each other, the way we respond to our customers, our suppliers, the way we see ourselves,” he says. “A good culture is critical to the success and growth of a healthy company.”

A healthy culture is about engaged employees who show up to work for more than a paycheque, says Nowakowski. To gauge engagement, his 155-employee company does surveys. The latest one, in November, came after a difficult year that saw a lot of stress and a couple of significant layoffs at JNE Welding.

“We don’t do those surveys just to see whether we’re good or not, we do them to see where we need to improve,” he says, adding the results were pleasantly surprising. “It really reinforced that, even though things were tough and we had to make difficult choices, people still felt very strongly about what they were doing.”

To build and strengthen culture, branding plays a role and it’s not about some sort of campaign or retreat, says Nowakowski, but everyday efforts and differentiating the company from the competition. Communication is key, in a variety of formats, he says. For instance, a quarterly newsletter for workers includes a president’s message and sections on new hires, personal achievements and safety.

“The whole newsletter is really designed to inform and engage and reinforce the culture that we drive to have and strive to have.”

And on the first Monday of each month, Nowakowski addresses every employee collectively for about 20 minutes. With two different shifts at two different locations, he speaks to one shop at 7 a.m., then speaks to another shop, bridging two shifts, at 4 p.m. and finally speaks to the second shift at the first shop at 10 p.m.

He recognizes people with safety milestones as well as company successes, along with communicating values and challenges “to help inform and engage and excite people,” he says.

“I really believe that you need to provide people with a bit of framework and the expectations have to be laid out so that they know what’s expected of them and they can buy in and feel good about being a part of something that is organized and substantially better than the average or what they’ve seen anyplace else.”

As for HR, its role is similar to the conductor of an orchestra, says Nowakowski, in noticing if someone is out of tune or being disruptive.

“Truly, that’s the role of HR, is almost a bit of a keeper of the culture,” he says. “The HR person is really there to make sure everything is conducted in the proper fashion, everybody gets help that needs help, that they’re identified and assisted.”

Kathy Bardswick, president and CEO, the Co-operators Group

The insurance co-operative is based in Guelph, Ont., and has 6,000 employees
along with 4,000 at exclusive agencies

Values and culture can often be confused, according to Kathy Bardswick, president and CEO of the Co-operators Group in Guelph, Ont.

“Values are one thing. Culture is really the behaviours and the manifestations of values,” she says.

And culture is something that cannot be changed easily or quickly.

“I have to chuckle when I hear a new CEO arrives and, within a year or two, he’s changed the culture. Well, I don’t believe that,” says Bardswick, adding the CEO may have changed symptoms of the culture but not the entire culture.

“Too often, we defer to ‘Oh, the culture needs to be changed.’ Well, maybe not, maybe it’s something related to tools, infrastructure and execution that has little to do with culture and far more to do with the kind of environment that the leadership is providing.”

In her 10 years leading the Co-operators, Bardswick says she has not set out to change the culture but focused on certain areas.

“There are aspects of our culture that have been problematic… that I’ve held up and talked about and wanted us to think, ‘How would we actually behave differently here if we wanted to improve that aspect of our culture?’ So it’s not this sweeping thing.”

To assess the health of the Co-operators’ culture, it’s about finding out whether there’s alignment between the manifestations and beliefs of senior leadership versus other aspects of the organization, she says.

“Oftentimes, we’ll hear an organization claim its values are this, its culture is this, but actually, embedded in the organization is something quite different.”

Staff engagement surveys can also provide clues as to the health of the culture.

“That’s not a culture survey per se, but if you look at the questions and you look at the feedback you get across the organization, it really speaks a lot to culture and a lot of behavioural-oriented experiences that staff have,” says Bardswick.

The executive team can also get very myopic, she says, so the board spends a lot of time immersing itself with staff. That means moving board meetings across the country so employees can interact with the board and the board can get a sense of the culture first-hand.

The Co-operators, which has 6,000 employees and 4,000 at exclusive agencies, also spends a fair amount of time looking at trust and reputation scores from clients, says Bardswick. It’s about looking at “What’s our face to the marketplace and are we, in fact, manifesting the kind of organization we believe our culture should be manifesting in the eyes of our customers?” she says. “Is our culture reflecting who we believe we should be?”

In defining and transforming culture, the CEO’s behaviour is really a signal, she says. Since most employees don’t interact with the board on a regular basis, their view into the ownership is through her. And employees need to believe in the company’s mission and understand their roles.

“If that alignment’s not there, if I’m not behaving and demonstrating what I need to do, then I should go off and fold sweaters at Sears.”

HR is also important when it comes to all of the programs, environments, tools, mechanisms and infrastructure that need to be aligned.

“That’s where a lot of human resources best practices need to reflect and be supportive of and encourage and reward what needs to happen from a behavioural standpoint,” she says. “It’s got to be reinforced throughout the organization with all kinds of infrastructure associated with what will support that kind of behaviour, so the recognition and rewards systems, the development programs, the learning and development environment.”

However, HR should not be solely responsible for communication around culture, says Bardswick.

Everybody in the organization who has responsibility for helping others to be their best — which is typically how you define supervisors, managers, VPs — they all share that responsibility.”

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