The Denison Newsletter - Summer 2004
Summer
2004
Dear Colleague:
Welcome to the Summer 2004 issue of the Denison
Newsletter. We welcome your interest in the latest news and updates from the Denison team.
Your comments and questions, requests for additional information, and story ideas are always appreciated. Please Contact Us Online
- Editor
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In this issue: |
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The Client's Perspective |
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T+D Magazine featured article: X-Rite - "Riding the Tiger of Culture Change" |
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Case study: Defense Logistics Agency embraces customer-focus |
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Case Study: Hitachi turnaround creates shared vision of success |
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Consulting Network
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Research Update |
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Workshops and Events |
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Racing Update |
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Denison News & Notes |
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The Client's Perspective
T+D Magazine featured article: X-Rite - "Riding the Tiger of Culture Change"
Denison Consulting has earned a prominent mention in the latest edition of T&D magazine, a monthly trade publication distributed to the 37,000 members of the American Society for Training and Development (ASTD). The story – “Riding the Tiger of Cultural Change” – profiles the dramatic, 24-month turnaround of Grandville, Michigan-based X-Rite. The company is a leading global supplier of hardware, software, and services used in verifying and communicating color data.
Several years ago, X-Rite launched a cultural change initiative involving all of its employees. Applying the Denison Organizational Culture Survey (DOCS), the firm assessed its culture, determining key strengths and weaknesses, and then mounted an enhancement strategy.
As a result of the change strategy, X-Rite gained major improvements in its culture, employee morale, product innovation, and bottom-line results.
Bill Neale, principal of Denison Consulting, worked directly with the leadership team at X-Rite in developing and implementing the organizational-improvement effort.
“X-Rite’s story is a dramatic one, showing that organizational culture matters significantly and directly affects bottom-line performance,” said Neale. “In addition, you can measure and enhance an organization’s culture and boost success.”
The T&D article was written by Patricia Carr, Ph.D., a business consultant in the Pittsburgh, Pennsylvania area, and president of Oakmont Consulting Group.
Members of ASTD can access the complete T&D story by clicking here. Others interested in obtaining a reprint of the article should Contact Us Online
Case study: Defense Logistics Agency embraces customer focus
The Defense Logistics Agency (DLA) -- with a $25 billion budget, facilities in 48 states and 28 nations, and approximately 23,000 employees – easily equates with a major Fortune 500 company. It carries on a vital operational role in support of U.S. interests and security, providing a wide range of supplies to the Department of Defense. Among the thousands of items DLA handles are the ready-made meals consumed by combat troops in the field.
A key performance measure monitored by DLA – like many organizations -- is “customer satisfaction.” Any lapses in service or delivery by DLA can result in serious problems for its customer. Therefore, the agency maintains a comprehensive “Balanced Scorecard” system to monitor how well the customer’s needs are being met.
In 2003, DLA sought to strengthen and reinforce the organization’s customer focus in its Strategic Plan and Balanced Scorecard system. It added the use of the Denison Organizational Culture Survey (DOCS) to assess how well the agency’s leaders and culture supported a transformation to a customer-focused organization.
According to Scott Nier, a personnel psychologist in DLA’s Human Resource Strategy Office, the ultimate goal is to establish, sustain and manage a customer-focused corporate culture.
DLA combines DOCS with its existing climate survey
To address culture, all proposed actions were checked for alignment with the Strategic Plan and Balanced Scorecard. DLA then identified the desired aspects of corporate culture to be addressed in order to accomplish the strategic goal – e enhanced customer focus. Finally, culture was assessed using the Denison tool and model.
“Culture Champions” were mobilized to conduct organizational-development activities to close identified gaps between the existing and desired culture. These Champions publicized targeted culture traits and helped business-unit leaders to implement actions for measurable performance improvement.
The DLA leadership incorporated the DOCS tool into the agency’s existing Employee Climate Survey. This approach enabled the agency to continue to monitor the organization’s climate, while integrated an in-depth cultural assessment in the survey process.
Results are tied to customer satisfaction
DLA leaders wanted to determine the extent to which the culture and climate affected organizational effectiveness. The link between DOCS survey results and customer satisfaction scores were examined across 10 business units. In every case, business units with better scores in organizational culture were viewed more favorably by the customers they serve. The following statements – reflecting the cultural climate – were found to be the best predictors of positive customer-satisfaction ratings:
n “When disagreements occur, we work hard to achieve ‘win-win’ solutions.”
n “Everyone believes that he or she can have a positive impact.”
n “There is good alignment of goals across levels.
n “Work is organized so that each person can see the relationship between his or her job and the goals of the organization.”
n “Teamwork – rather than hierarchy -- is used to get work done.”
Nier presented these findings at the 2004 Society for Industrial and Organizational Psychology (SIOP) Conference that was held in April in Chicago. The following charts show the differences in DOCS results for the five business units with the best and worst customer-satisfaction ratings:
Case study: Hitachi Computer Products (America) creates shared vision of success
A high-technology company in Norman, Oklahoma was performing reasonably well. But an employee rumor mill that conveyed unreliable information at "warp speed" was undermining morale and negatively affecting productivity, quality and customer satisfaction.
That's the situation George Wilson faced when he took over the reign of Hitachi Computer Products (America), Incorporated in 2001, as the organization's first non-Japanese president. The production facility in Norman, Oklahoma is a major, custom manufacturer of electronic products for the computer, networking, communications, medical and security industries.
"It was amazing how fast false rumors buzzed around the facility, and how information became skewed and misused," said Wilson. "The most troubling belief held by many employees was that we were planning to shut down -- because we weren't succeeding competitively -- but weren't disclosing it."
In actuality, Wilson said, the plant was winning new customers and was poised for sustained growth. But Wilson, and other leaders at Hitachi, were concerned about the plant's rumor mill, which they perceived as reflecting a dysfunctional culture that -- left alone -- would create long-term problems.
Local agency recommends Denison survey
Wilson and Gary Riggs, vice president of Human Resources and Information Technology for the facility, sought organizational-development help from the local vocational training center. Officials at the Moore Norman Technology Center encouraged Wilson and Riggs to conduct a cultural assessment by surveying employees. The tool they recommended was the Denison Organizational Culture Survey (DOCS). Developed and commercialized by Ann Arbor, Michigan-based Denison Consulting, the DOCS product is a research-based tool that can be applied to measure 12 cultural traits that are linked to bottom-line performance.
As Wilson and Riggs could have predicted, their company's scores in virtually every area measured -- including the general categories of adaptability, mission, involvement, and consistency -- were significantly lower those shown by top-performing organizations. Armed with data validating their beliefs that the plant's culture was in need of significant change, the Hitachi leaders developed and implemented an improvement plan.
With baseline data, an improvement plan is created
"The survey gave us real-world information that showed us where we were -- a baseline -- and provided us with great insights about what we needed to do," said Riggs. "In addition, we were able to track the effects of our cultural-improvement strategy with a follow-up survey."
The first order of business was to replace the rumor mill with an effective communications program. Plant leaders mobilized a communications initiative designed to help employees understand and support the facility's mission, values and goals. Another objective of the effort was to share -- on a regular basis -- information about how the plant was performing on key metrics, such as quality, efficiency, waste-reduction, customer satisfaction and profitability.
"Prior to this initiative, the communications link with employees was weak -- which was one major reason the rumor mill developed in the first place," said Wilson. "With enhanced communication, we sought to create a unified work team, and a shared understanding that the responsibility for our success is borne by everyone."
Better communication builds trust, boosts morale
The communications program included all-staff meetings every quarter, bi-monthly group meetings with the president, Intranet-based daily updates, and regular postings in the employee cafeteria. Wilson says workers quickly embraced the value of improved communication, and a higher level of trust and understanding between the plant's leadership and its employees began to emerge.
Wilson, Riggs and other members of the leadership team at Hitachi made additional organizational changes, as well.
"We completely revamped our bonus, compensation and performance-management systems," said Wilson. He said the goal was to more closely link pay with performance, to reinforce the message that individual results and company results are interdependent.
The leaders here have made the expectations for performance very clear, and have created a system that rewards people for their contributions to our success," said Riggs. "The message to people is simple: 'If Hitachi does well, you will do well.'"
Culture drives business success
In 2003, Hitachi Computer Products conducted a follow-up survey using the DOCS tool. Scores in virtually every area showed dramatic improvements. In the earlier survey, the company achieved scores that all were below the 10th-percentile vs. top-performing organizations. By comparison -- in the 2003 poll -- the plant earned scores across all traits ranging from the 25th to the 75th percentile, including especially strong measures in "organizational mission."
Wilson says his company's organizational-improvement experience supports the notion that organizational culture has a direct influence on bottom-line performance.
"We dramatically improved our culture, as reflected in the DOCS results," he said. "At the same time, our performance in all key business areas also jumped significantly -- including quality, productivity, profitability, customer satisfaction, and inventory management."
Hitachi Computer Products (North America)
Cultural Assessment, 2001 vs. 2003
Fast Facts on Hitachi Computer Products (North America)
Client: Hitachi Computer Products (North America), located in Norman, Oklahoma.
Profile: Major custom manufacturer of electronics for an array of companies and industries worldwide.
Needs: Diagnose and fix cultural problems, including inadequate employee understanding of company's mission, success and outlook.
Timeframe: 2001 to present.
Tool used: Denison Organizational Culture Survey (DOCS).
Bottom-line results: Improved organizational performance on all DOCS measures. Major improvements in business outcomes, including profitability, quality, productivity, and customer satisfaction.
New client update: National Cancer Institute will use Denison tools and services
Denison Consulting is now helping the National Cancer Institute (NCI) launch an organizational-development initiative to support the fight against cancer.
Based in Washington, D.C., the federally funded NCI is part of the National Institutes of Health, and is one of eight agencies within the U.S. Public Health Service. It is the nation’s principal unit for cancer research and training.
NCI pursues an ambitious goal
NCI recently adopted a bold and ambitious goal -- to eliminate pain and suffering due to cancer by 2015. The organizational-development effort is designed to help ensure that NCI's 4,000 team members are fully engaged and mobilized in support of the agency's mission and goals.
The Denison Organizational Culture Survey (DOCS), a diagnostic tool that hundreds of organizations have relied on to enhance their bottom-line performance, will be used to identify organizational strengths and areas for improvement. All 4,000 team members -- at approximately 15 NCI locations -- will have an opportunity to participate in the survey.
Mobilizing employees for vital mission
Mary Burness, a consultant serving in NCI's Office of Workforce Development department, has played a major role in planning and coordinating the organizational-development effort.
"NCI recognizes that our employees are the cornerstone of our success," she said. "This organizational-development effort will help identify what we are doing well in our efforts to support our employees, as well as what we may want to improve upon to assure that NCI is a great place to work, with a workforce fully engaged in accomplishing our mission."
Burness evaluated a range of service providers and organizational-development tools prior to selecting Denison to support the project.
Research-based organizational tool valued
"As an organization focused on research, we were impressed with the Denison approach because it has a solid, research-based foundation," she said. "We are excited about moving forward with the initiative, and have confidence that it will help us achieve our organizational goals."
Team members at NCI include scientists, research fellows, technicians, administrators, consultants and support staff.
Fast Facts on the National Cancer Institute
Client:
National Cancer Institute (NCI), a unit of the National Institutes of Health. NCI, established in 1937, has headquarters in Bethesda, Maryland.
Profile : Principal agency in United States for cancer research and training.
Web site: www.cancer.gov
Needs : Fully engage 4,000 NCI team members to accomplish ambitious organizational mission.
Tool to be used: Denison Organizational Culture Survey.
Timeframe : Project launch expected within next several months.
Anticipated results: Enhanced organizational alignment in pursuit of key goal -- elimination of suffering and deaths due to cancer by 2015.
Quotable quote: "NCI recognizes that our employees are the cornerstone of our success" -- Mary Burness,
Consultant, NCI Office of Workforce Development.
Consulting Network
Ignoring organizational culture -- and the clash of cultures that often occurs when companies are combined -- can undermine the success of a merger or acquisition. That's the word from Caroline Fisher, founder and president of Fisher Consulting Group, based in Vail, Colorado.
Here are five of the most-common myths surrounding mergers and acquisitions -- false beliefs often embraced and promoted by company leaders:
- If it looks good on paper, it will work.
- Management can make a merger work, just using sheer willpower.
- If we ignore organizational or cultural problems, they will solve themselves.
- Our merged company can reach its goals, in spite of the cultural differences of the entities being combined.
- This merger is a merger of equals.
According to Fisher, only one out of five mergers is successful, as measured by financial performance. And more than 66 percent of all mergers and acquisitions result in diminished market value for the combined organizations.
Merging two organizations -- no matter what their size, age or business focus -- is extremely challenging," Fisher says. "And not paying attention to organizational culture, and not leveraging the benefits of a unified vision and culture, can be fatal mistakes."
To learn more about using the Denison surveys in a merger environment, click to read Caroline's article Making the Merger Work from the Handbook of Business Strategy.
Change-agent profile: Consultant confronts common cultural challenges
From the living room of her home, Caroline Fisher has a clear view of the Rocky Mountains, and -- on most days -- a deep, blue sky that she says is stunningly beautiful.
And the necessity for clear vision is one of the themes she stresses in her professional role as an organizational-development consultant. Fisher is founder and president of Fisher Consulting Group, based in Vail, Colorado. She has helped a wide range of organizations to better understand organizational culture, to measure and enhance it, and to improve bottom-line performance.
Fisher has provided services to an impressive array of businesses and organizations -- from city governments and health-care providers to banking institutions and utility cooperatives. And in her work, she has relied heavily on the Denison Consulting model and tools, including the Denison Organizational Culture Survey (DOCS) and the Denison Leadership Development Survey (DLDS).
Clients benefit from Denison tools
"I utilize the Denison tools in almost all of my work," she says. "They deliver valid, tangible measurements on the people and organizational traits and issues that are the right targets for intervention and change. These tools make great sense to me, and they provide meaningful and beneficial results for the clients that I serve."
Mergers and acquisitions have been a key area of focus for Fisher. She says the same principles for establishing a healthy organizational culture apply to all organizations, including two businesses that are being combined into one.
Effective cultures can be created
Organizations with the most-effective and healthiest cultures deliver the best results, Fisher asserts. And cultures can be managed, directed and changed.
High-performing organizations, she says, typically have a clear vision or mission; employees who can see and embrace the vision; effective leadership at all levels; organization-wide accountability for upholding values and delivering results; and empowered team members who can take responsibility for making decisions and influencing positive results.
Fisher holds a master's degree in Organizational Development and a doctorate in Organizational Psychology. Throughout the 1990s, she served as vice president and senior consultant for ARC International, a global firm that specialized in personal and organizational effectiveness.
Executive Development Associates, Inc. announces new consortium research study - The Leadership Bench Strength Challenge: Building Integrated Talent Management Systems
A full 80 percent of the 101 major companies surveyed in Executive Development Associates’ 2004 Trends in Executive Development Survey said building bench strength will be their top objective for the next few years. While companies recognize the problem, most said they are falling short when it comes to solutions. Some 70 percent of respondents said they know they need an integrated talent management system to address the bench strength challenge but few have an effective system in place.
EDA is launching a major effort to help companies address this key challenge – and members of the Denison community are invited to participate. The Leadership Bench Strength Challenge: Building Integrated Talent Management Systems will examine best-practices and newly emerging solutions in leading companies. To learn more, visit EDA’s website at www.executivedevelopment.com or contact Dr. Eileen Antonucci at 212-551-3617.
Research Update
New insights on family-owned businesses
Culture is an important factor in many family businesses. Founders have a unique impact, values are important, and succession can be a big challenge. How do the cultures of family businesses compare? The article "Culture in Family-Owned Enterprises: Recognizing and Leveraging Unique Strengths" in the Family Business Review journal written by Dan Denison along with International Institute for Management Development (IMD) colleague and family business guru John Ward, shows that the cultures of family businesses compare very favorably with the cultures of non-family businesses.
Case study: The Ferrari renaissance
One of Daniel Denison's sessions at IMD's top-ranked executive program, "Orchestrating Winning Performance", focused on "The Ferrari Renaissance" -- a recently released IMD case study on the comeback of the Ferrari Formula One team during the past decade, under the leadership of Luca di Montezemolo. This case study is a great example of team effectiveness and transformation that has proved very useful in executive development programs.
Workshops and Events
Denison workshop schedule for 2004
Are you interested in attending a Denison Consulting workshop this year? The company's two-day conference -- "Linking Organizational Culture to the Bottom Line: A Workshop for Leveraging Change" -- will be presented on October 7 - 8, 2004 in Ann Arbor, Michigan.
Early registration is encouraged, as space is limited. To register, or seek further information, Contact Us Online or call at (734) 302-4002.
Racing Update
Denison motors into national championship race
With a fourth place finish at Road America in Elkhart Lake, Wisconsin, Dan Denison has qualified for the "The Runoffs" -- The SCCA National Championships at the Mid-Ohio Sports Car Course, September 24-26, 2004.
Denison Consulting will sponsor several cars in this televised national championship race, often referred to as the "Olympics" of amateur racing. The Runoffs determine the National Championship in each class. The championship race will take place at 2:30 pm, September 26 at the Mid-Ohio Sports Car Course in Lexington, Ohio.
Other members of the Denison racing team expected to compete in this event include Jon Adams (1995 National Champion in Formula Vee), and Matt Champagne (2003 Champion of Canada's Bridgestone FF2000 Series.) Champagne is a part of the "Stars of Tomorrow" program, designed to help young drivers reach the next stage of their career. Denison sponsors this program in partnership with the Sunoco Ron Fellows Karting Championship.
Contact Us Online if you would like to receive more information about this exciting event and the corporate hospitality events that are planned. Click here for some recent racing pictures!
(Just to set some realistic expectations...
...Dan is not expected to win. He is too tall, too heavy, and too old! But he will compete in the national championship race with hopes of a top ten finish!)
Denison News & Notes
Denison has been approved for the GSA
Of special note to the company's government agency colleagues, Denison is now on the General Services Administration list (GSA.) Our GSA contract number is GS-10F-0345P. The inclusion on the GSA makes it easier for Government employees to contract with Denison for our Organizational and Leadership Development products. Please Contact Us Online or call at (734) 302-4002 for more information, or check the GSA website at:
http://www.gsaelibrary.gsa.gov/ElibMain/ElibHome
Type in the contract number and hit “Go”.
Service update: Denison implements new pricing guidelines
Denison implemented new pricing guidelines on March 1, 2004.
To access a complete, updated price list for the Denison Organizational Culture Survey (DOCS), click here. To review updated prices for the Denison Leadership (360) Development Survey (DLDS), click here.
Spotlight on Denison Consulting: Recent presentations focused on organizational culture
Dan Denison and Bill Neale presented two half-day pre-conference workshops focusing on Organizational Culture and Leadership Development. Dan Denison also gave a keynote address entitled "Measuring Culture: Theory and Research" at the American Psychological Association (APA) 2004 Conference which was held July 26 - July 31 at the Hawaii Convention Center in Honolulu, Hawaii.
Dan Denison, and Ed Sketch, a senior consultant for the company, participated at the 2004 annual conference of the Society for Industrial and Organizational Psychology (SIOP.) The event was held in Chicago from April 2 to 4. The Denison team presented a practitioner forum entitled "Organizational Surveys: Moving from Diagnosis to Action."
Dan Denison gave a presentation at a two-day March 2004 workshop sponsored by IBM Business Consulting Services (IBM/BCS) in London, England. His presentation focused on the characteristics of on-demand organizations. Officials at IBM/BCS have decided to use the Denison Organizational Culture Survey (DOCS) to assess and manage cultural success factors in e-business and on-demand products.
In Berlin, Germany, also in March 2004, Dan Denison held a two-day workshop on "Linking Organizational Change to the Bottom Line." Participants from Humboldt University, Daimler Chrysler, Swiss Re, and Systemics were among those in attendance.
Bill Neale and Ed Sketch jointly delivered a workshop at a March 2004 conference sponsored by the California Strategic Human Resource Partnership (CSHRP). The presentation featured an overview of the Denison Model, and profiled research and case studies focusing on the impact of organizational culture and leadership practices on bottom-line performance and effectiveness. One case study -- highlighting the value of Denison tools in managing mergers and acquisitions -- cited experience from Cadence Design Systems, Incorporated. Another case study, discussed by Sketch, focused on a turnaround situation at Ford Motor Company. CSHRP is a professional partnership that includes senior human resource executives from leading companies in California.
Staff update: Three new team members named at Denison
…Kevin Gainey, Software Developer. He is responsible for enhancing and developing computer systems, software and processes. He has 15 years of experience in the development of internal and external business systems for various companies. Kevin holds a B.S. degree in Computer Science from Eastern Michigan University, in Ypsilanti, Michigan.
…Jill Reedy, Client Manager. She holds a B.A. degree in Sociology from the University of Michigan, in Ann Arbor, Michigan. Jill's area of academic concentration was Economic and Business Sociology.
...Ann Howell, Director of Research and Development. Ann has experience in designing Web-based human resource system such as competency systems, 360 degree feedback systems, and learning management systems. At Denison, Ann will manage data analysis and research projects as well as driving new development efforts. Ann has a B.A. in Psychology and History from Rice University, in Houston, Texas, and a M.A. and Ph.D. from Michigan State University, in East Lansing, Michigan, in Industrial/Organizational Psychology.
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