Creating a Culture That Never Quits

CEOs can count on one thing heading into 2020: there will be no return to business as usual. The unprecedented speed and complexity of change has created a climate in which constant disruption is the new normal. To stave off obsolescence, CEOs need a cadre of gifted leaders in their ranks who are able to see around corners, spot looming threats and identify new opportunities for growth.

Just how to attract, nurture and retain that top talent in a fiercely competitive market was the subject of the 2019 CEO Talent Summit at West Point, where top business and military leaders shared secrets for recruiting and building extraordinary cultures that thrive in change.

That illusive competitive requirement— great culture—was at the heart of the discussion during the two-day conference. “That is the DNA,” said Nigel Travis, chairman of Dunkin’ Brands, where he led as CEO for nine years until 2018. Travis, the author of The Challenge Culture: Why the Most Successful Organizations Run on Pushback, explained that a challenge culture requires constant dissatisfaction with the status quo. “What exists today is not going to help you in the future—even if you invented it,” said Travis, who was also president and

COO of Blockbuster until 2004. He explained that the video rental giant ultimately went bankrupt because it failed to identify the threat from a single scrappy startup. “We studied Netflix passively. We sat there and watched it—you can’t do that,” said Travis. “You have to constantly anticipate your potential demise.”

To do that successfully, you need a culture that welcomes dissent and inspires spirited questioning and effective listening. “Do you, as CEOs, provide your people the opportunity to question the status quo?” he asked attendees. “Because that’s what helps you anticipate the future. Think of vigorous discourse as a way of life.” At Dunkin’ Brands, Travis instituted weekly “coffee chats” with junior employees so they would have a safe space for honest and transparent communication. CEOs must be authentic leaders, he added, noting that the tone should indeed be set by the CEO, “but you can only do that with your actions—with what you do every single day.”

HOW DELTA DOES IT

HR Lessons of the U.S. Military’s Special Operations Forces

MOST companies would kill for the retention stats of the U.S. military’s Special Operations Forces. Through a grueling 19-year war in Iraq, under treacherous conditions, highly skilled men and women keep on coming back to serve. “And they love what they do,” said retired Lieutenant General Frank Kearney, former deputy director for strategic operational planning at the National Counter-Terrorism Center and now a faculty member at Thayer Leader Development Group. “Why do they do that? Why do they continue to sign up to work in oppressive heat, extreme cold, under fire?”

Perhaps more importantly, how can CEOs inspire the same commitment, enthusiasm, drive and loyalty? Kearney suggested borrowing a page from the military playbook by following these steps:

1. Hire right. Special Ops puts applicants through a battery of tests—physical, intellectual, psychological, medical, stress-testing—to ensure they’re getting people with the competency and skills to engender trust on the part of their fellow soldiers. While Kearney acknowledged most companies can’t apply such rigorous testing, they still need to do more upfront screening. “If you are using the interview as your primary source to recruit, identify and hire people, you are not doing enough to make sure you’re getting the right talent that will stay in your organization.”

2. Train well. In the military, soldiers are constantly trained for the next level up, and they know what they’re being trained for, which improves learning. Kearney cautioned CEOs not to let training go to waste by failing to create opportunities for those new skills. Investing in talent is another way to tell valued employees you care about them. “You can’t guarantee them a job, so how do you make them feel secure? Send them to training. Give them challenges. Give them counseling, coaching, feedback. Make that a priority.”

3. Create ambassadors. Only 10 percent of those who enter the special mission unit training actually make it through to Delta Force, said Kearney, “but 100 percent say, ‘This is the best training experience I’ve had in my entire career.’” Companies need to make sure all employees—even those who ultimately are not a good fit—have a positive experience and feel cared for. “Your organization’s reputation is the No. 1 weapon you have to recruit talent,” said Kearney. “If everybody buys into that, that reputation will precede you.”

A TALE OF TWO TRANSFORMATIONS

Synchrony Financial CEO Margaret Keane and Lord Abbett Managing Partner Doug Sieg both led complete cultural transformations at their organizations—and thrived.

Prior to its spinoff, Synchrony Financial had been a part of industry giant General Electric for more than 80 years. “Many of our employees had only worked at GE, they wanted to retire at GE,” CEO Margaret Keane recalled. She knew her leadership team would have to work to bring those valued employees along on what was sure to be a turbulent journey to being a standalone entity. “GE had a very strong culture,” Keane said.

Indeed, GE’s hyper-efficient, precision-based Six Sigma culture wasn’t necessarily going to be the best fit for the new independent company, which was aiming to be more entrepreneurial and innovative. Taking the time to develop the company’s new raison d’être-enabled employees to begin rowing in the same direction with enthusiasm, said Keane, noting that those employees are now all part-owners of Synchrony, thanks to a granting of shares on the company’s fifth anniversary in July. “Sometimes, people say that things like culture, values, mission, purpose are fluffy. But I think as you’re going through this kind of transformation, you really need to communicate and get people to rally around what you’re trying to do.”

The CEO has a key role in enabling that change, said Doug Sieg, who, as managing partner of Lord Abbett & Co., led the asset-management firm on a shift from a rules-based culture that relied on centralized decision-making to a more principles-based partnership with greater collaboration. “The CEO’s role is to set the temperature in the room,” he said. “If you want to set the temperature in the room to ‘everybody at each other’s throats,’ you can do that. If you want to set the temperature in the room to ‘we are going to be a team, we’re going to be owners, and we’re going to thrive together,’ you can do that as well.” In Lord Abbett’s case, Sieg said he didn’t actually change all that much. “What I did was I switched the dial to delegation and decision-making in the field, and I’ve watched the organization just absolutely love it.”

USING STORYTELLING TO CREATE CULTURE

Avanoo CEO Daniel Jacobs says lessons connected to stories resonate with employees.

Culture can be a squishy thing. According to a 2018 Deloitte survey, 82 percent of senior executives believe it is a competitive advantage, and 94 percent say improving culture will increase company value. “But only 16 percent say their culture is where it should be,” said Daniel Jacobs, CEO of Avanoo, which works with companies to create positive culture shifts. Although we’ve figured out that culture is important, “we don’t yet know what to do about it.”

One of the best ways to drive meaningful and lasting cultural change is through storytelling, said Jacobs. “We’re 22 times more likely to remember a lesson or value when it’s connected to a story.” Avanoo client Choice Bank used a four-step model to develop a customer-first culture using stories:

1) Inspiration: Every week, the bank began distributing three-minute videos of employees telling stories about an experience they had going above and beyond to delight a customer.

2) Ownership: After watching the video, employees could then share their own stories or share an idea or suggestion, which was broadcast online to the entire organization.

3) Alignment: Employees took a weekly survey to measure engagement. “We could see where there were hotspots and opportunities within the organization and could project what kinds of stories would help drive change.”

4) Impact: The results for the key engagement metrics were monitored to ensure they were headed in the right direction. From January to September, all four of the metrics rose significantly, by a minimum of 19 percentage points. “That’s not because of the technology,” Jacobs said. “It’s because we tell employee hero stories. And people really want to see themselves, and their colleagues, as doing something valuable and meaningful in their lives. The technology just supports that.”