The role of leadership in culture change
By Marty Parker
“If it ain’t broke, don’t fix it.” It’s a good rule of thumb for many things in life and in business. But when we’re talking about corporate culture, a more hands-on approach is required – less “if it ain’t broke” and more “don’t wait ‘til it’s broke”.
At Waterstone, we believe that regularly measuring and assessing corporate culture is an essential part of supporting healthy organizational performance. The goal of assessing culture doesn’t need to be finding problems; it’s just as valuable to get a pulse on where your culture is resonating with your team, where you can fine tune, and where you can really celebrate what’s working.
I had the chance to sit down with the President & CEO of Reliance Home Comfort, Sean O’Brien, to talk about his experience with driving culture change and why he believes that measuring culture is critical for organizations of all shapes and sizes.
The interview has been edited for length, but you can listen to the full conversation here.
Talk a little bit about the business, which was a very healthy business that you inherited, but with a slightly different culture than where it is today. Talk about that culture and performance journey, if you will. I know we were fortunate enough to be there a little bit with you through that. So maybe take us back to 2013, what you found, what you assessed and maybe what you did, and what were those early steps forward on that cultural performance journey.
So it’s interesting, in the marketing world they talk about a white space, a white space somewhere that’s untouched; it’s yours. You can deliver a strong message into that area where the consumers can really relate to. So going back when I was talking to, at the time we were owned by a company called Alinda Capital Partners. When they approached me about joining the organization, I’d met with them in New York City, I flew home and that weekend I was at a Christmas party, a holiday party. And I remember talking to people at this party and I kept saying, “Hey, where do you rent your water heater from?” And most people could give me a definitive answer, Reliance or someone else. And then I asked the question, “If your furnace broke down tonight, who would you call?” And no one could give me an answer. And that’s when I knew there was something special.
So when I joined, I knew the organization was very proud of what they did. They were proud to be Reliance team members. They were really focused on giving good service, and it was a real strong family atmosphere. I’ve worked with Waterstone before in a previous life at another organization, which was also a two-time winner of Canada’s Most Admired [winner]… I engaged with Waterstone to come in and do what we call a cultural assessment. Just let me understand what kind of culture we have. I think I know, but I’d love to have someone come in and tell me what are the key drivers in this business, and what’s the foundation? And so engaging with Waterstone, you were able to actually map out, help us understand what were the key foundational pieces that we’d want to cherish and protect, and nurture and grow. And then also some of the things that were in flux, where we’re starting to see the change occurring, right? And then ultimately some tools that we should focus on to really help speed up this cultural change for us.
Off the top of my head I remember the culture when I joined was friendly, family service, customer, comfortable. Something along those lines. And then when you came back in almost two years later it was fast-paced, growth-orientated, reward recognition, friendly – I still like this place, but we’re moving, we’re getting after things. And it’s not for everybody. It really isn’t. But I think part of it is knowing what you’re getting into and aligning that.
So one of the founding things we did is, when I joined, at the time we had 10 values. So the first couple of months I would walk around and talk to everybody. I’d be in the branch in Windsor, I’d be in a branch in Winnipeg, in Burlington. And I’d say, “Hey, do you know our values?” And people would go, “Yeah, we have 10 values. That’s awesome.” Great: “Can you tell me them?” They go, “Oh, no, I couldn’t.” And I thought, well, that was really interesting to me. Some people could give me three. Most people could give me the 10th value, which was Have Fun.
So we went out… We created a mission statement, or what we call our Purpose Statement. And it was about delivering comfort, allowing customers to be comfortable in their homes. Providing hot water, warm air, cool air. It was really a simple, simple thing. It was about delivering comfort, the destination of choice.
The other thing was, we created four guiding principles. And when we talk about them, we don’t do the, “Hey, here’s a guiding principle and this is what it means.” I actually want you to determine what you think it means. And they’re so simple. So the four, we actually now have five – we’ve added one – but the four were:
- Drive to Win. It’s pretty straight forward, right? Drive, win, motion, action get after it, right?
- Better is Better, which is simply, if I’m good today, how can I be better tomorrow? It’s about continuously improving.
- Delivering an Outstanding Customer Experience. Again, straight forward. And I always like to use great simple examples. If that was your mum, or if that was your dad, or if we were going to your house, was the service the way you’d want it? Real basic stuff.
- And the last one we developed was what we called Proud to be Reliance. And that encompassed wearing your sweatshirt, Reliance, everywhere. I have tuques on, I’m wearing my colors all the time. It was about giving back to the communities where we live and work. It was about making sure we’re a safe place to work, both physically, but also safe from no one’s going to judge me, no harassment, none of that kind of stuff.
And so recently we added in our fifth guiding principle, which is Work Safe, Be Healthy. So we have five because we really wanted to bring that up and let people understand it is core to what we’re trying to do.
I think that when we step back, and I’ve gone back to the presentations that Waterstone created in terms of the assessment tools and where we’ve changed and how we’ve evolved, and it is amazing. We kept the core things that made us special, and then we elevated the things we needed to get after as an organization. And I’m really proud about what we’ve done as an organization.
This is a bit of a story that stands out, because most culture change, which takes time, is driven because it has to. But you aren’t. You’re in a unique circumstance where you had a healthy business with controlled growth, with happy employees, with not a lot of turnover. So what you did in many respects was risky, in that you basically lit a fuse, woke an organization up, and there’s always risks that that may not translate into growth, into success. So when you look back now, what do you look back on and say these are the two or three things that we did that made the difference in ensuring that that change was lasting, because clearly it has been lasting.
I think of two things. One, we spent a disproportionate amount of time communicating. Just really, and nothing fancy, but just communicating what we were trying to do. The why. Let everyone know it’s not a scary place we’re going. Let everyone understand the benefits and what we were trying to accomplish as an organization. And we also realized that as an organization you can talk about things, but humans like to see things, we love to touch things. We love to smell things. And what we did is we spent some time really working on giving back to the organization to support what we’re trying to do.
It was about making investments back into the business. Like at the corporate office, we went all open concept, right? And you’ve seen the office. It was a significant change. No one has offices. Everyone has cubicles – bright, airy, cool, all that kind of stuff. New vehicles, new uniforms, training for our frontline, new technology for our frontline. So now people can go, “Okay, I get what this guy’s talking about. He said, ‘We’re going to do some things.’ We’re actually doing these things and now I’m seeing some benefits.”
In 2013, we had 1,064 team members. And as I said, we’re just about 2,400 team members right now. And I really think there’s a correlation between, if you communicate so everyone understands what we do, where we go, what we have to execute on, my role in the big picture, my value in the big picture, you’re unstoppable, right?
If there’s a chief executive officer, a CHRO, a chief people officer out there and they’re sitting on the fence about including culture as one of their key measurements, what would you tell them about the importance of measuring culture?
It’s critical. And when you think about it, one of the challenges you have on measuring cultures, sometimes it’s annually or semi-annually with some sort of survey or something, right? So we do our annual surveys and we actually create action plans and drive through them and measure and all those things.
But there’s some other things that are unofficial measurements of culture. And what I mean by that is, I believe that culture is an ingredient, a key ingredient when you’re cooking something. We’re making a stew. This is a key ingredient to really make this great tasting stew. And it’s critical. And you can say, “Well, Sean, then what do you measure? What are you measuring then?” And there’s a bunch of different things we measure. Health and safety results, on a daily basis. Our driving behavior, on a daily basis. Our net promoter score. Which I’ll tell you, our net promoter score in 2013 was 38. It is 72 right now. Our daily activity, whether it’s sales activity, our call responsive rates. There’s a bunch of key measurements for us that we measure. They’re an output of culture. They are truly, truly, truly an output of culture. And we stay pretty focused on making sure we’re on top of those things.
And I would say that to a CEO or a chief people officer, if you’re going to make this step, and say let’s spend some time on thinking about our culture, I’d encourage you to. It is a game changer. It truly, truly is. I think it’s our competitive advantage. And what I mean by that is, you know, I don’t want to sound arrogant or bold or naive, but we put on our Reliance net, our internal team member website, our entire strategy plan, is there! And if someone wanted to download it and walk over to our biggest competitors tomorrow, they could. But the difference is, I am 100 per cent confident that my competitors don’t have the same kind of culture we have. And it goes back to being able to execute on a plan, understanding our roles in the plan, taking enjoyment in the plan, celebrating in the plan, all the things that make up for a very powerful organization.
Sean, you’re advising, say a young entrepreneur, a young leader. What would you advise them in terms of, if they’re really keen on building a high performance culture, one of the things that you would say to them, “Look, here’s what you need to get focused on”?
I think the thing that bubbles up to me is, know what you want. I know that sounds silly, but if you want to be a growth organization, be a growth organization. If you’re going to be a growth organization with higher margins and those things, then set yourself up for that. Understand what you want to accomplish.
If you go back to when we started this, I knew we had a white space. I knew there was a place that Reliance could own, we could get after in winning that marketplace. So when we developed the culture, us, the team, our investors, knew what it was going to go after, we were going to go after growth. We were going to make bets on growing this business, growing it profitably. And I know it doesn’t sound like great advice, but I just share it from an experiential standpoint.