Culture Has to Be Built from the Bottom Up
Don Peppers
Customer experience expert, keynote speaker, business author, Founder of Peppers & Rogers Group
Last week I traveled to Lake Jackson, Texas, just south of Houston, to attend the retirement celebration for Ed Speed, CEO of Texas Dow Employee Credit Union (TDECU). Ed took over as CEO ten years ago, when the credit union had assets of about $700 million and just 70,000 members. Today it's nearly triple that size, with $2 billion in assets and 170,000 members.
TDECU’s business success is due largely to the upgrade in the company’s corporate culture that Ed began to engineer from his first day on the job. In his speech to the banquet crowd Ed denied he was responsible for the culture change, and he was half right in making that denial. No corporate culture can ever be built, installed, planned, or managed successfully from the top down. Engineering a successful culture change is a case study in bottom-up thinking, because a company’s culture bubbles up from its employees, although company policies and processes certainly do affect it (usually providing more obstacles than advantages when it comes to customer-oriented cultures).
Now TDECU is not a Peppers & Rogers Group client, but our consulting practice frequently does help companies that are saddled with cultures they would like to improve. At most companies, in fact, we've found that the corporate culture (i.e., the "unwritten rules" that govern employee expectations and behavior) is one of the main roadblocks to better financial performance. As a result, we have a lot of experience in expediting corporate transformations and I know that Ed’s approach was spot on.
But what exactly was this approach? If the CEO can't actually direct a change in culture, then how exactly did the credit union's change? In a nutshell, it happened because Speed was able to encourage some interested rank-and-file employees to take on the responsibility themselves. This group of employees latched on to the idea that in order to genuinely serve members and return to a more family-like atmosphere, the credit union should adopt what they called “REAL” standards (for Reliable, Efficient, Accommodating, and Loyal). The employees themselves wanted to improve the credit union’s service, and my impression from talking with a number of them was that the culture-change effort quickly took root and became a kind of rallying cry for everyone, providing a sense of camaraderie and an esprit de corps that infused the whole effort.
In addition to meeting with Ed, I had lunch with incoming CEO Steph Sherrodd (pronounced “Sher-ROD”), and at Ed’s retirement banquet that evening I sat at a table with Steph and her husband Kevin, along with a couple of Steph’s mentors from her pre-TDECU days. Ed recruited Steph in 2004 from her position as Chief Operating Officer at a Wyoming credit union, and began grooming her to be his replacement almost immediately (talk about succession planning!). In 2011 the Credit Union Times named Steph a Woman to Watch and a lot of people have indeed been watching her.
For now, I just wanted to share this story with you, because I know that virtually every manager signed in to LinkedIn will have wrestled with the issue of corporate culture at one point or another. In upcoming posts I plan to talk a lot more about the subject, but meanwhile all comments are welcome!
Future-Proof Organization Practitioner -- Human leadership fuels high performance. If you have open mind, I help add open culture to leverage open-source - Change is risk: doing the same leads nowhere. Let's move on!
9 年I think good corporate culture can emerge in the foot steps of a leader who can moderate his/her egoistic drives, which will enable empathic motivation of those in his/her environment. A good corporate culture has long term effect.
Marketing Professional
11 年A great book that validates this article is Drive. The Surprising Truth About What Motivates Us by Daniel Pink. He underscores the fact that culture change becomes "sticky" when the change comes from the intrinsic motivation; the employees own desire change. Change cannot be dictated. No carrot can encourage it to happen (long-term). And the effects of training can be fleeting. Lasting change happens when employees Want it to happen because they feel some level of satisfaction, or fulfillment because of their actions. When employers can identify the set of intrinsic "rewards" that are relevant to employees and provide the freedom for employees to attain them for themselves---amazing things can happen.
Customer experience expert, keynote speaker, business author, Founder of Peppers & Rogers Group
12 年Roger, your comment is right on, and here's a quick idea. When I visit a consulting client I make it a point to talk casually with at least a few line employees. Nothing big, no big survey or anything. But I'm listening to how they describe their jobs and the problems they see. At some companies the employees talk about "our problems" or "our biggest issues," while at other companies they talk about "their problems" when referring to their employers. But guess which firms have the strongest cultures, and the most supportive employees?
AMDG – Luke 14:11
12 年Don, this is a great topic. When I was at YUM! Brands, culture was a HUGE part of the performance equation. In fact, we saw the tie to financials when I was on a 3-person team that did a dramatic turnaround of the sales at KFC's inner-city restaurants. Previous teams had thrown discounts, deals, new menu items, and marketing at the problem; to no success (except crushing margins). What we realized was that, while those were important; unless we changed the culture INSIDE the restaurants; nothing we did from OUTSIDE could help. So, we enlisted key restaurant leaders AND staff, did a lot of work connecting and getting input from the operators, and even created a "team" atmosphere (I still have my T-shirt). When the culture shifted from "we're working for a corporate behemoth" to "we are working together to serve great products to our community," the financial turnaround was staggering.