If you need proof that organizational culture and leadership affect bottom-line results, you may not have to go much further than your friendly neighborhood Domino’s Pizza store. Denison Consulting has been supporting the Domino’s organizational change effort since 2001, an initiative that has helped boost the company’s financial performance in a major way.

Since it began in 1960, Domino’s Pizza has established itself as an industry leader and pioneer, with a sound reputation for quality products and reliable delivery. In recent years, the company has re-energized itself with new ownership, new leadership, an updated image and a dramatically refocused organizational culture.

Domino’s CEO pushes ‘people first’

In March 1999, David A. Brandon took over the reigns of Domino’s as its new chairman and chief executive officer, and quickly sought to promote a “people first” management style. He came into the organization as a successor to Tom Monaghan, the highly visible founder of the Ann Arbor, Michigan pizza chain.

Under Monaghan’s leadership, Domino’s had expanded dramatically through the years from one operation in Ypsilanti, Michigan. By 1998, the time when Monaghan sold Domino’s Pizza to Bain Capital, the organization was comprised of a global network of more than 6,500 stores, including both company-owned and franchised units.

Brandon wanted to enhance the firm’s financial performance in the highly competitive retail pizza marketplace. Crucial to this goal, he believed, was a workforce that was more involved and empowered, and more comfortable with change.

Denison surveys offer insights 

In 2001, Domino’s began using the Denison Organizational Culture Survey with its corporate employees. Initial findings showed strength in the organization’s mission and consistency, but vulnerabilities in traits tied to adaptability and involvement.

The leadership team at Domino’s drove to implement a “change is good” mentality, with a wide range of new practices and processes to support it. And, symbolizing the value of people and their involvement, the human resources department officially was renamed “People First.”

Many operational changes were made as well, including the introduction of new products, the launch of a simplified training program, and the rollout of a new brand image.

A follow-up Denison survey in 2003 showed that Domino’s had made significant progress in all six areas of adaptability and involvement, including creating change; customer focus; organizational learning; empowerment; team orientation; and capability development.

Bottom-line impact is significant

Domino’s revenues increased from $1.156 billion in 1999 to $1.333 billion in 2003.  And the firm’s customer satisfaction scores increased as well. By 2002, Domino’s was outperforming its competitors, and the fast-food industry overall, on the American Customer Satisfaction Index.

In June 2003, Domino’s was named “2003 Chain of the Year” by Pizza Today, a leading industry trade publication. A feature story in the June 2004 edition of the magazine highlights the company’s cultural change and financial success story.

In the article, here’s what CEO Brandon had to say about Domino’s organizational makeover: “I really tried to condition this organization to embrace change vs. resisting it, to begin really looking at things differently…That was challenging, but it has been hugely rewarding.”

Fast Facts on Domino’s

Client: Domino’s Pizza, Ann Arbor, Michigan.

Profile: One of the world’s largest pizza chains.

Needs: Diagnose/track organizational culture. Enhance workforce empowerment and adaptability.

Timeframe: 2000 to present.

Tool: Denison Organizational Culture Survey; Denison Leadership Development Survey.

Bottom-line results: Sales growth; significant increase in net income, from 2.1 percent in 1999 to 35.8 percent in 2002. 

Kelly Kosheba, vice president of human resources for American Eagle Outfitters, has her finger on the pulse of the organization. The company -- headquartered in Warrendale, Pennsylvania -- is a major supplier of casual clothes for young people between the ages of 15 and 25. And it's a firm that faced some tough times in the early 1990s, and now is growing by leaps and bounds, as it heads toward $2 billion in annual sales. 

In 2002, Kosheba became convinced that the company needed to prepare for rapid growth. She was determined to bolster American Eagle in a systematic way, by developing and supporting organizational leaders; boosting employee morale; and assessing and enhancing the culture.

In developing a plan, Kosheba worked in collaboration with John Pocari, director of performance strategies and solutions for Five Star Development, a Pittsburgh, Pennsylvania-based consulting firm. The proposed initiative was comprised of four parts, including cultural surveys and follow-ups; leadership surveys and follow-ups; leadership development for "high-potential" emerging leaders; and executive coaching for senior executives.

The program was launched in early 2004, and already is generating substantial support and positive impact at American Eagle Outfitters.

Leadership team endorses improvement effort 

"Kosheba knew that this effort was the right thing to do in supporting the organization's success, and she kept it on the front burner to make sure it would happen," said Pocari.

He says the program also has an important and influential champion in the organization, the chief executive officer -- Jim O'Donnell. "He values organizational and leadership development, and his ongoing endorsement of the program has helped drive its success."

Denison tools and services are deployed

In February 2004, the American Eagle Outfitters workforce -- which numbers 4,700 -- was polled using the Denison Organizational Culture Survey (DOCS). This assessment provides multiple measures on four key performance categories that are linked to bottom-line success -- adaptability, mission, consistency, and involvement. A follow-up DOCS survey is planned for February 2005 to gauge the company's cultural-improvement progress.

Another vital assessment and improvement tool also was deployed -- the Denison Leadership Development Survey (DLDS). Participants in this poll included O'Donnell and his team of executive vice presidents, as well as a group of “high-potential" emerging leaders. Results from this survey have been used to provide the organizational leaders with valid and realistic feedback on their leadership strengths, as well as potential areas for personal improvement. Follow-up DLDS polls also are scheduled, as a means to measure and respond to progress.

Assessment measures from both surveys are being utilized in planning and implementing leadership-development efforts and senior-executive coaching.

A 'work in progress' breeds optimism for the future

According to Pocari, the program at American Eagle Outfitters remains a "work in progress." But the company's business and financial results have been outstanding, thanks largely to operational upgrades made concurrently with the launch of the organizational-development initiative. "The leadership team at American Eagle Outfitters is confident that our efforts will deliver the organizational culture and leadership excellence required to support sustained, bottom-line success and expansion," Pocari concludes.

Industry observers, and the youthful consumers who buy products sold by American Eagle Outfitters, are invited to stay tuned to this ongoing story of success and growth.

Fast Facts on American Eagle Outfitters

Client: American Eagle Outfitters, Inc., with headquarters in Warrendale, Pennsylvania.

Profile: Company designs, markets and sells its own brand of casual clothing aimed at the youth market -- those between the ages 15 and 25. American Eagle has 4,700 employees and generates annual sales of more than $1.5 billion.

Needs: Prepare the organization and its leadership to support significant, near- and long-term business growth. Assess, manage and improve organizational culture; develop leaders; and provide executive coaching to senior leadership.

Timeframe: Ongoing -- organizational and leadership development initiative was launched in early 2004.

Tools used: Denison Organizational Culture Survey, Denison Leadership Development Survey.

Bottom-line results: Initial outcomes have been positive, as the organizational-improvement effort continues. The company has exceeded all of its key performance targets. 

Years of organizational and leadership development research by the people at Denison Consulting have yielded key insights on achieving career success. That's the word from Bill Neale, a leadership-development expert and founding partner of the company. He says understanding the different expectations held by your boss, your direct reports and your peers is crucial to achieving career success and growth. 

"In our research, we have found that managers typically judge an employee's performance on a far different set of standards than others do in the workplace," Neale asserts.

Here's a quick summary -- based on Denison studies -- of what your boss, your direct reports and your peers are likely to want from you in the workplace:

The boss expects you to set and achieve strategy, goals and objectives that support the long-term mission of the organization. "You can be the greatest team player in the world, or a wonderful 'people person' -- but if you ignore the organizational mission -- you'll never satisfy the boss," says Neale.

Direct reports expect you to promote teamwork, delegate authority and responsibility, and encourage personal development. Neale says getting your direct reports involved, motivated and committed is crucial. "If you truly don't engage the folks who work for you, you won’t win a vote of confidence from them, and you're not likely to fully leverage their energies and talents."   

Peers expect you to be adaptable and consistent, and committed to the organization's principles and values. According to Neale, organizational peers are a difficult group to satisfy. "They may have less information about you, or view you as a competitor," he says. "Peers, however, do place a high value on flexibility, the ability to surmount organizational boundaries and constraints, and to push for alignment in the workplace."

Neale says organizations are complex, demanding and highly unique environments, and that there's no simple formula for assuring personal or career success. "If you're serious about succeeding, however, the first order of business is becoming cognizant of the various expectations -- both spoken and unspoken -- you need to satisfy."

Two of the most popular tools available from Denison Consulting -- the Denison Organizational Culture Survey (DOCS) and the Denison Leadership Development Survey (DLDS) -- have yielded considerable information about the traits of successful organizations and leaders. Neale's views about career success are based on results from the application of these surveys at thousands of client organizations worldwide.   

The founder of a successful, family-owned automotive manufacturing company was considering retirement and needed an objective assessment of the leadership potential of his son and stepson, both on the management team, before concluding on his retirement and succession plans.  Blender Consulting Group (BCG) partnered with Denison to determine the leadership potential of each son and provide counsel during this delicate transition planning process.

BCG developed a plan to coordinate a comprehensive assessment of each son.  Phase One was an objective psychological assessment and Phase Two was the Denison Leadership Development Survey, a 360-degree instrument that links leadership development and organizational culture to tangible bottom-line performance measures.  “The Denison Surveys have proved invaluable tools in working with family businesses. Business owners often have a difficult time being objective about other family members, particularly their children.  Non-family members in an organization are very cautious about sharing their views directly and openly,” said Dennis Blender, founder of BCG.  “The confidential, objective information offered by Denison provides the basis for leadership development and critical decisions for the long-term health and succession of the business.”

The founder’s son scored particularly high on areas of customer focus and core values, but low in areas of gaining involvement of others and strategy development and implementation.  He was viewed as working extremely well with customers and making decisions with a strong sense of integrity.  The stepson results were quite weak from a leadership perspective, particularly in team orientation, core values and empowerment.  His interpersonal skills frequently resulted in strained relationships. 

Using the results from the Denison Leadership Development Survey and the objective psychological assessment, BCG created a developmental plan for each son in their anticipated future roles. A senior executive was recruited to join the management team to provide the necessary infrastructure, policies and procedures that had been lacking and to mentor the son to eventually take over as President.  He also provided mentoring to the son in order to prepare him for future responsibilities.

Unfortunately, the stepson’s behavior led to relationships that were detrimental to an effective management team. An opportunity was found for him in a subsidiary company. 

The son began establishing himself as the leader. Stock ownership started to be shared as a way for the founder/owner to begin his transition into retirement.

Family businesses always create unique dynamics and it is critical to be cognizant of three dimensions that make up a family business: 

       Ownership – the distribution of shares

       Family – the role of family members

       Business – the needs of the business

Understanding these dimensions is critical in working successfully with a family business.  BCG has vast experience in incorporating the Denison Leadership Development Survey and other techniques to assist family businesses in leadership/management development, transition planning and other critical and strategic planning areas. 

An article in the American Society of Association Executives publication focuses on a culture shift in the Family Health Council of Central Pennsylvania (FHCCP).  The story – “Shift Organizational Culture to Improve Organizational Performance”- by Bryan Adkins and Cindy Stewart details the culture shift within a nonprofit healthcare organization.

Shortly after a change in leadership in 1999, FHCCP participated in the Denison Organizational Culture Survey to assess the strengths and weaknesses of the organization.  At that time, the organization scored in the first quartile on 10 of the 12 indices, with scores in the remaining two indices falling only in the second quartile.

“Culture does matter, and a strong, effective culture will outperform a weak culture every time,” writes Bryan Adkins, Senior Consultant with Denison Consulting.  Adkins worked directly with the organization to develop and plan for change.  As a result of the change strategy that was developed and implemented, the organization attained a budget increase of 25 percent and reversed a decline in patients/clients served.  Culture scores also improved dramatically.

To obtain a copy of this article, Contact Us Online.

Dan Denison has been invited to give a presentation to the March 1 meeting of the International Human Resources Council, hosted by Microsoft, in Munich, Germany.  IHRC is the leading council of European Human Resource executives. 

This presentation, which will be delivered along with Rolf Schlue, HR Vice President at Henkel, will focus both on the link between organizational culture and business performance and the application of the culture survey at Henkel. 

Two Denison Consulting team members – Dan Denison and Bryan Adkins – have co-authored a paper that will appear as a chapter in a forthcoming book. The paper, "An Action Learning Approach To Changing Organizational Culture; Rethinking the Balance Between Action and Learning," will appear as a chapter in a new book from M. Dulworth and F. Bordonaro – "From Promise to Payoff: The Art and Science of Creating a Learning Organization." Publisher of the book is San Francisco-based Jossey-Bass. In their piece, Denison and Adkins highlight the application of the Denison Organizational Culture Survey (DOCS) to forge improvements at two organizations – a major, global reinsurance company, and a regional healthcare firm. The cases reflect examples in which personal and organizational learning and development are used to drive an action agenda. 

Bryan Adkins, Senior Consultant with Denison presented at The Academy of Management meeting in New Orleans and at the British Academy of Management in St. Andrews, Scotland.

In New Orleans, Adkins presented a study titled “Linking Cultural Data, Action and Results: A Study of Two Organizations” at the Academy of Management.  The study combines quantitative and qualitative methods to follow two organizations, one nonprofit and one publicly traded, as they launch culture assessments and decide how to use the results.  The impact of the assessments and the action taken afterward is also discussed. “The experience of these two organizations suggests that cultural understanding is indeed an important function of leadership – perhaps the most important function,” writes Adkins.

Adkins also presented “Leadership and Organizational Culture:  A CEO’s Impact on Culture and Performance in a Non-Profit Organization,” to the British Academy of Management in St. Andrews, Scotland.  This study examines the relationship between CEO effectiveness and organizational culture in a not-for-profit healthcare organization, using the Denison Leadership Development Survey and the Denison Organizational Culture Survey for quantitative measurement.  Findings indicate that “leaders can overcome situational factors to have a significant impact on the organization that they lead.”

To obtain a copy of these studies, contact Bryan Adkins 

The Denison Workshop is designed to help consultants, executives, and managers learn how to incorporate Denison tools to improve profitability, customer satisfaction, employee satisfaction, quality, and growth.

The Denison Workshop is facilitated by Daniel Denison and William Neale and provides:

• An overview of the Denison Model and its origin
• A review of the research linking the Denison Model to bottom-line business performance
• Interpretation information for the Denison Organizational Culture Survey, the Denison Leadership Development Survey, and the Change Monitors
• Interactive experience analyzing case studies and real data from your organization
• Guidelines and tips for using Denison tools to drive the change process

The 2005 Sessions of the Denison Workshop will be held:

• March 11-12, 2005 in Zurich, Switzerland

• May 12-13, 2005 in Ann Arbor, MI, USA

• July 19-20, 2005 in Ann Arbor, MI, USA

• September 15-16, 2005 in Ann Arbor, MI USA

For more information about the Denison Workshops, please visit our website at www.denisonculture.com or Contact Us Online. 

Although thousands of organizations have used Denison tools for assessment and improvement, our network of companies, consultants, and researchers has regrettably had little opportunity to meet.  On March 17-19, 2005, in Boca Raton, Florida, Denison Consulting will be holding its first annual Denison Forum, where the Denison community can share stories of success and failure, consider the lessons learned, and plan for the future. 

The core of our work is the diagnostic process that we use to understand the impact that culture and leadership have on business performance, but the true value is only realized when these insights are translated into action.  Thus, much of the value that comes from the Denison tools is created by our clients and by our consulting network.  In addition, many of our research objectives and product innovations are directly driven by the needs of this group.  The Forum will provide a valuable opportunity for clients and consultants to discuss ideas and share solutions. 

Denison is aggressively expanding its international presence and has opened its first European office in Zurich, Switzerland.  The opening is in response to growing demand for the Denison tools in Europe. 

“We’ve worked with a large number of European clients throughout the years and it has now become important for our international growth plans to establish an official presence in Europe,” says Jay Richards, Partner and Survey Director at Denison. 

Adam Filler, Co-Director of the new Swiss office points out that having a substantial and permanent European presence to complement the current North American presence will allow the organization to respond to client needs more efficiently.  “Being able to work with clients in their own time zone and in their own language is a step forward and really improves our ability to meet the needs of our international clients.”

The new office will be co-directed by Adam Filler and Robert Keller, both of whom have a great deal of experience with the Denison model and its applications.  To learn more about Denison in Zurich, please contact Adam Filler. 

As part of Denison’s continuing effort to provide accurate and useful benchmarking information for client organizations, the Denison Organizational Culture Survey (DOCS) norms were recently updated to include organizations surveyed since the previous norm update in 2002.   The new 2004 norms will become the default comparison for future survey feedback.  

The 2004 DOCS norms are based on 707 organizations as rated by over 280,000 total respondents.  Every organization included is rated by at least 25 and as many as 16,000 respondents.  On average, organizations in the benchmark were rated by 405 employees.  Organizations in the database were all assessed between 1995 and 2004, with the majority (60%) surveying after 2000.

The DOCS database contains organizations representing a wide variety of industries and countries, from architectural firms to zoological gardens, and from Australia to Venezuela.  Manufacturing organizations have the greatest representation, making up about 25% (n=193) of the database.  The benchmarks also include 96 business/professional services firms, 58 financial services firms, 42 retail/wholesale trade organizations, and 39 educational institutions. 

The 2004 version of the DOCS normative database represents a 27% increase in the size of the benchmark.  Despite this, however, differences in the results obtained using the two versions of norms are relatively minor.  In terms of average ratings of DOCS items, the organizations included in the 2002 and 2004 normative databases are very similar.  Looking across all 60 items, the mean difference in ratings between the 2002 and 2004 benchmarks is a mere .0009.

Dan Denison competed in the SCCA Runoffs at Mid-Ohio Sports Car course on Saturday, September 25th.  The Runoffs, often described as the Olympics of Motorsports, are held each year to determine the national amateur championship in each of 23 classes.  Denison competed in the Formula Ford 1600 class, which produced one of the best races of the entire series.

Denison’s race got off to a good start as he gained three positions on the first lap.  But on the second lap, coming out of the Keyhole onto the back straightaway, another car hit him, causing him to spin out and ending his race.  The competition at this event is fierce, but Denison posted his personal best time ever at Mid-Ohio.  Unfortunately 27 out of 33 other starters posted faster times...  Tough competition. 

The second Denison car, driven by Matt Champagne of Ontario, finished 9th.  Champagne is a karting champion in Canada, and is a protégé of LeMans champion Ron Fellows.

The SCCA Runoffs were televised on SPEEDVISION, on Sunday, December 12.  Contact us for a videotape of the event.  We are now planning for the 2005 season, and will post the season schedule in a future e-letter.  We plan to again sponsor a two-car team and hold hospitality events at the major races.   Stay tuned!!!