How We Completely Changed Our Organizational Culture in 12 Months

When I began my work as the CEO at SEG Saude Ocupacional, in mid 2013, I immediately perceived the great potential this company had. It was relatively small (and Dynamic), it had demonstrated decent growth in the previous year and its owner was open for change. The company had reached a stage in which it needed more professional management in order to go to the next level.

As a management consultant turned executive, my first job was to get to know more about the operation and its people. After 2 months, it was time to implement the first great action towards change: the Strategic Planning. I see the S.P. as the first great step in change because, when properly done, it helps the company in defining what it wants to be and do (its purpose), where exactly it wants to get, what it wants for its internal corporate culture, and it brings in tools for the company to create paths to get to its objectives.

This third step in the Strategic Planning process, the definition of the desired company culture, is not very emphasized in traditional S.P. processes. Normally, many companies define their Mission, Vision, go through very basic Values and quickly go to the SWOT Analysis. I believe that the definition of organizational Core Values, the main drivers of the desired company culture, is one of the most important steps in a Strategic Planning process.

Once defined the organizational Core Values (and I really like the style made popular by Zappos), along with the company Mission, Vision, SWOT, Balanced Scorecard and Projects and Initiatives Plan, the Strategic Planning, when done with monthly review meetings, creates a sense of urgency and accountability for the company to really move forward towards its objectives.

The Survey

One of the projects normally defined in the Strategic Planning workshops I facilitate is the implementation of an Organizational Climate and Culture Survey. It is a very important action that allow us to understand the current state of the organization in regards to its intended culture. We ran the first survey at SEG in September/October 2013.

I like to design this survey in a manner that it identifies the employees’ behaviours alignment to each of the Core Values defined in the Strategic Planning process. I also use this survey to measure some important strategic KPIs, such as employee satisfaction with: Internal Communications, IT Systems and Internal Processes. Find below the scores we had in 2013 for alignment to each desired Core Value:

CultureSurveySEG-2013

Note: Scores vary from 0 to 10, ten being the highest/better. An alignment score of 5 indicates the company is 50% aligned to the desired core value. The NPS (net promoter score) varies from -100% to +100%. Positive values signifies more people recommends the company than talk badly about it.

Looking at theses scores, we see that the company already had a decent score at providing good customer service (at least in the eyes of its employees). This was further proved by the measurement of client NPS at 60% in February 2014.

However, some scores worried me. We clearly see that people in the company lacked in humbleness, communication and integration among employees. The specific scores about employee satisfaction with internal processes, IT and internal communication were also significantly low.

The light given by this survey was followed by set of important projects and implementations, orchestrated with the Strategic Planning, which resulted in a complete change in organizational culture in only 12 months.

In September/October 2014, exactly 12 months after the first survey, we ran the second one. The core values, which were 12 freshly made in 2013, were consolidated along 2014 in 10 core values with very similar meaning to the original ones. The survey questions used to measure alignment to each core value were mostly kept the same between the 2 survey. The new results were the following:

CultureSurveySEG-2014

CultureSurveySEG-2014-changed

We can see significant improvements in the scores measured in 2014. Every single score has improved.

In 2013, the worst organization alignments were to the values “Be Humble” (score: 4.5) and “Value communication and be assertive” (score: 4.9); while the better alignment was to the value “Promote the best experience a client might possibly have” (score 7.1).

In 2014, the worst alignment was to the value “Promote the integration between people and a team spirit” (score 6.9, the equivalent to the second highest score of 2013), while the best alignment was to the value “Keep a High Standard of Ethics” (score 8.3)

Of the 50 quantitative questions that were the same in both 2013 and 2014 surveys, 49 presented an improved score while 1 kept the same value. No question in 2014 received lower score than that of the previous year.

Of the specific questions asked, some leaps in score are worth the mention:

CultureSurveySEG-2014-questions

A new question asked in 2014, not present in 2013, made me proud: “Do you think your job is positive to society / the world?” Score average: 8.6.

This improvement in culture is already being reflected on customer service. The client NPS score, which we measure monthly, is already varying between 70 and 80%. These NPS values are very rare. (I leave here a disclaimer: we do the client NPS survey ourselves, not through external consulting companies. However, we do our best to be impartial and are very honest with our results).

The new, more solid culture, also had an impact on revenue. While Brazil entered, in 2014, in one of the worst crisis in decades, SEG managed to sustain double digit revenue growth in the first semester 2014 (Jan-Jun) over the same period in 2013. While the market contracted, we grew.

But how did we get these results?

The following are some projects and actions we implemented along these 12 months, in between surveys:

Creation of the Strategic HR

One of the organizational areas most neglected in many businesses is the Human Resources. I am amazed at how the one area which is responsible for recruiting the people that makes up the organization; the area which is supposed to develop the mechanisms for motivation and productivity, and which should curate and develop the desired culture, can be so left to the sidelines at so many businesses.

One of the first steps I took at SEG was the hiring of a person with more experience and potential to take care of the company’s HR. I also took this area away from under the Finances department and put it directly under me, the CEO.

Creation of the Strategic IT

Another area that is normally neglected at SMEs is the IT department. When I started at SEG, this area was outsourced. An IT analyst would come twice a week to take care of support, urgent matters were resolved remotely and a consultant would sporadically present a disconnected project idea for improvement.

Don’t get me wrong, I am against swollen IT departments at any company but I believe IT must be strategic. By strategic IT I mean an IT that knows how to listen to people; that knows how to research and come up with solutions that not only improve processes but also that changes them completely. An IT that implements solutions that greatly increase productivity and that create competitive advantages.

This type of IT was, some 10 years ago, only available to large companies. Today, due to the increased access to information and Software as a Service applications, strategic IT is available to business of all sizes. As I have a reasonable background in IT, we hired our own system analyst and we put him reporting directly to me. We now both do research on good solutions for the company (always in partnership with users) and he makes it happen under my supervision.

Better Systems

One of the first projects implemented in IT was the migration from MS Exchange/Office to Google Apps for Business. Just after implementation, our email problems (which were responsible for 50-60% of all internal support calls) suddenly disappeared. Google Apps also has great applications such as collaborative spreadsheets, online chat (the Hangouts), Google Sites (which is now our intranet), Google Drive (document storage), etc. These tools greatly increased interaction and collaboration within and between teams and departments.

We also hired SugarCRM – a web-based CRM system which is very customizable and includes workflow features. All these tools allowed us to dramatically reduce the use of paper across the company.

Leadership Development

I believe it’s vital that leaders’ behavior is in alignment with the intended organisational culture. So an important step was to ensure our leaders believed and lived our culture.

Naturally, in big organizational changes, especially to company culture, we always find people that are resistant or simply do not hold the values we want for the organization. Throughout this process, we had to let some leaders go in order to bring in people more aligned to the culture we wanted to implement. On the other hand, some new leaders emerged internally and people who were already leaders grew even more personally and professionally.

In the leadership development process, we implemented coaching for leaders, both individually and in groups, and I personally conducted weekly discussion meetings on management books, such as “The Servant”, one chapter per week.

Approximation of the CEO to all employees

From the start, we implemented a weekly lunch between me and 2 randomly selected employees. We implemented this because I felt that I needed a direct channel of communication with the people who are in the front lines. These lunches gave me the rich opportunity to get to know people, to understand their point of view and understand their concerns, as well as to receive first hand suggestions and feedback. It also allowed me to explain our strategic plans, to answer questions and talk about some of the projects we were implementing. This was, and still is, one of the richest experiences for me. Besides lunch, we also implemented an anonymous suggestion box (one that only I have the key to open and read the notes), quarterly all-hands meetings (when we present the company results and update all on strategic projects) and other important projects.

Redesign of Company Visual Identity and Participation in Tradeshows

For SEG to enter in its new era, it needed a new face, more modern and more aligned to the intended core values. In the first semester of 2014, we began the process of logo and visual identity redesign. The result was a cleaner more professional logo, more related to Occupational Health and Safety, SEGs’ market. The name of the company was also slightly changed to reflect this. We changed colors from the use of orange and black to using blue, dark grey and white. We completely rebuilt the website.

With the new face, we participated in CONARH, the largest HR tradeshow in Brazil. Our participation, along with the quality and completeness of our services, generated quite an impression in our market. Clients and employees became proud of the company and we became listed among the 300 Best Suppliers for HR Services in Brazil (by the “Gestão&RH” magazine). We are now more evident in the market and our culture is more appropriate to support this.

These were only some of the strategic projects we implemented in 2013/2014, in these 12 months in between surveys.

We still have a lot of work ahead of us to get where we want. But reflecting on the past 12 months, we came a long way.

I leave here special thanks to Fabio Diniz, André Ferraz, Carlos Rasini and Uilson Fernandes, from Exection Consultoria, for the valuable insights and contribution in this process.

Ricardo Sé Cestari.