HR s Role in Culture Change FTI Consulting A Case Study April 2017
Culture is as critical as strategy and organization All three must be in sync How a company wins in a market Coherent Business Strategy How will we compete? Value creation choices articulated in mission, vision, targets, and business objectives A company s products, brands, and customer relationships All centered on a coherent set of capabilities Organization Culture How will we run the business? Structural breakdown between corporate, BU s, and support functions Responsibilities and decision rights across groups Performance measures Critical systems and processes How will we energize our people? Behavioral norms and lived values Long-standing attitudes and beliefs Accepted style and approach common understanding Symbols visual identifiers and stories A key role of HR is bringing culture in line with the strategy and organization. 2
The right culture Culture is what people do and how we behave which becomes the standard norms for how we operate the sum of this includes soft and hard tools Soft tools Hard tools Interactions & experiences with colleagues Making people feel valued Tolerance for failure but with accountability Allowing people to have a voice Creating trust Culture of participation Priorities & initiatives to focus on How we reward & recognize / compensate What we celebrate Performance management Org Structure / title / hierarchy Funding / investment / expense Discipline to be accountable Culture is simply defined as How Things Work Around Here 3
There are lots of levers to pull to change culture the key is to determine which to focus on that will make a difference Formal Levers Vision, mission, values statement Capability systems Reporting structures Decisions rights Business processes and metrics Recruitment and selection programs Training programs Performance management Compensation Policies Informal Levers Tone set by senior leaders Meaningful manager-employee connections Awareness building Informal networks Peer-to-peer interactions Communities of common interest Pride builder initiatives Culture Carriers & Change Agents 4
FTI Consulting A Case Study 5
FTI Consulting A Case Study in Culture Change FROM Acquisition Based Growth TO Organic Growth Top Down Siloed Decisions & Strategy Right to Win & Empowerment Stagnant Stock Price Accountable Leadership & Aligned Rewards Me Focused Grow the Pie Silos with little collaboration Unleash the value of FTI through collaboration Outlining FTI s strategic future focus in a simple to-from framework provided a way to determine culture levers to prioritize. 6
Overview of FTI People Surveys Executive Leadership Interviews & Survey Baseline survey of 100+ leader Scored facets of FTI culture Employee Engagement Survey Annual survey of all employees at all levels Score of very satisfied to not satisfied on 33 questions Organizational Culture Index Survey + Interviews Bi-annual culture survey of 25% of employees across all groups, levels and regions Interviews with senior leaders Focus groups with levels below leadership Gathered and analyzed lots of data and views to determine what we needed to focus on most as well as to build the case for change. 7
STRENGTHS Culture Index Key Takeaways from collaboration WEAKNESSES 8
FTI s Culture Journey LESS Individual brand / Siloed expertise MORE Firm brand / More integrated FTI Me-first Fight for my slice Firm-first Grow the Pie Disjointed / inconsistent priorities Bad behavior by big producers ok Don t know many outside sphere Mainly reward personal achievement Consistent vision and values Bad behavior not tolerated Know & trust colleagues across organization Also reward team achievement Acquisitive Growth Organic Growth Statements developed by business leaders in culture workshops. 9
Key Priorities Defined to Drive Culture Change Available Tools Awareness Communication & Discussion Experiment with new behaviors Incentives Cross-group interaction and collaboration Driving accountability deeper in organization Underway at FTI Open discussion of history and level set Increased communications email, webcasts, meetings, town halls, press releases Innovation with investment, Culture Workshops, Commercial Excellence initiative, FTI Values Aligning ExCo compensation to performance Key Accounts across business segments, global SMD meeting, Milestone trainings, quarterly office meetings, weekly email w/ success stories Monthly financial reviews, quarterly strategy updates, profitability by unit Discussed and vetted this list of priorities with the board, Executive Committee and all key leaders. 10
Where are we in the Journey? Highest Engagement Survey Scores Double Digit EPS Growth Turnover is below industry standard The most SMD promotes being sponsored ever A more aligned and cohesive Executive Committee FTI s strategic focus is well known First ever global Town Hall More collaborative selling across the business Changes in leadership 11 H
Keys to Success CEO and board commitment with regular conversations An aligned leadership team always a work in progress Gather, get, and know your willing buyers (and also engage the skeptics) Throughout the organization get leaders to be part of the journey Create momentum with data, analysis and lots of communication Talk about the journey in all meetings and business reviews Be patient it is a journey and takes a lot of time Complete culture change doesn t really occur until a whole new generation is brought up through the organization. 12
Culture Change Advice From Others 13
Focus only on a few critical behaviors at different levels within key populations 1 - In most cases, you do not need to worry about the entire culture in your organization Focus on those cultural elements that are most relevant to the specific performance improvement behaviors with which you are concerned 2 - Not all employees in your organization are likely to be in a position to influence the relevant cultural priorities You must first identify which groups of individuals are carriers of the cultural priorities These priorities are reflected in the behaviors, thoughts, feelings, and beliefs of the carrier group 3 - Thinking, feeling, and believing are hard to change but ultimately need to change Behaviors are also hard to change but a bit easier than the other three because You can use formal and informal mechanisms to make people behave differently even before they believe In doing so, people act their way to a new mindset (as opposed to the other way around) 4 - Culture, in its essence, is individual it is the sum of how all individuals think, feel, and behave Therefore, whenever we deal with culture, we have to break down culture to the person level Once you define who needs to adopt what kind of new behaviors, you can start to build a plan Carol Bartz, Former Yahoo! CEO 1 Carol Bartz discussion at the University of Washington 14