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A consumer products manufacturer competes in a mature and declining commoditised market with a small number of competitors. As such, the organisation must compete on quality to retain its share of the market. With quality becoming an increasingly important strategic imperative, the organisation wanted to understand how it could execute this strategy more consistently and effectively . RESPONSE Research of high performance companies has shown that one way to improve strategy execution is to build a culture aligned with that strategy Towers Perrin analysed results . rom this company’s employee opinion survey to assess how well the current organisational culture supported a quality-focused strategy and then identified how the company might alter its culture to , enable more effective execution of this strategy . RESUL TS Towers Perrin uncovered gaps in specific cultural elements that needed to be addressed to better realise a strategy focused on quality The analysis included a re view of the . prior year’s survey data and showed that the company was becoming weaker in critical cultural aspects. This insight helped the company form and conduct a formal process of culture change to improve its strategic focus and retain its market competitiveness. ALIGNMENT DRIVES STRATEGIC SUCCESS In many years of working with global companies, Towers Perrin has found that for an organisation to be effective in translating its goals into results, there must be alignment between its business strategy and organisation culture. Alignment is achieved when the shared beliefs, values, and ways of working within an organisation drive the realisation of goals and objectives. HOW DOES CULTURE SUPPORT QUALITY? Through research of high-performing organisations that compete on quality, Towers Perrin has uncovered the core cultural characteristics or cultural drivers which contribute to the success of these organisations (see table). Cultural drivers of quality Teamwork / best practice sharing Performance management Understanding of customer expectations Empowerment Process focus Training Long-term orientation Career development ? Good cooperation across work groups and departments ? Clear performance criteria that support customer service ? Knowledge of customer needs ? Provide quality where it matters most to the customer ? Support for change and challenge of tradition ? Demonstrated commitment to quality and improvement ? Identify and eliminate potential sources of error ? Focus on job preparation and continuous skill improvement ? Plans and optimism for the future of the company ? Recruiting, developing, promoting, and retaining best talent Towers Perrin I 2 A company’s most desirable cultural qualities depend on the particular business strategy the organisation is emphasising. Using this knowledge as a framework for investigation, Towers Perrin implemented a two-step assessment to determine to what degree and with what consequences the drivers of quality exist at this consumer products manufacturing company and to identify areas of culture change that would have the most beneficial impact in supporting an organisational strategy based on quality. EXAMINING THE COMPANY’S CULTURE Employee opinions, taken from their most recent survey, were analysed on the cultural drivers of quality. The survey results were first compared with scores from Towers Perrin’s Global High Performance Norm. This Towers Perrin benchmark consists of companies demonstrating superior financial performance and excellent management practices. As seen in Figure 1, the company scored significantly below benchmark in five of the cultural drivers of quality. Employees at this company were favourable with regard to sharing information and working across teams, managing performance towards customer service goals and understanding what their customers expect in terms of quality. Employees were less favourable with regard to support for change and new ideas, training and development of people, focusing on continuous improvement and taking a long-term view in the planning of the company’s future. Towers Perrin then looked at historical trends for the company regarding these drivers, comparing survey results over a three-year period. The results (see Figure 2) indicate that the company may be moving further away from embodying a culture that can support and sustain a real focus on quality. All quality driver categories showed either no improvement or a slight decline. FIGURE 1: Comparing company scores on Tower Perrin’s cultural drivers of quality Global high performance benchmark Centre line: Towers Perrin’s global HP norm Teamwork/best practice sharing Performance management Understanding customer expectations Empowerment Process focus Training Long-term orientation Career development -10 1 1 0 -1 -2 -3 -4 -6 -5 0 5 10 Shaded bars denote a statistically significant difference (p lt; . 05) FIGURE 2: Drivers of quality over time in the company Historical trends Percent favourable score 77 76 77 79 80 81 71 73 74 66 Training 69 68 77 78 77 41 41 44 Performance management 54 54 55 0 20 40 60 80 100 Process focus Teamwork and best practice sharing Empowerment Understanding customer expectations Long-term orientation 70 72 71 Career development Year 3 Year 2 Year 1 Towers Perrin I 3 Identifying key drivers that impact the desired strategy such as a quality focused culture, , are critical to action-planning. As training, career development, and long-term orientation were significantly below the high performance norm and showed a decline in employee favourability, these areas emerged as areas for focused improvement actions. IDENTIFYING AREAS OF CULTURE CHANGE WITH THE MOST IMPACT To identify the specific link between culture and quality within this company and to aid in the prioritisation of action, Tower Perrin conducted a series of key driver analyses to determine the strongest predictors of perceptions of quality among employees at this company. The results (see Figure 3) revealed that three factors were most influential in driving perceptions of quality: long-term orientation, process focus, and understanding customer expectations. In other words, those pockets of the organisation where quality was seen as very strong were also the pockets that had clear long-term plans for the future, management support for quality improvement and elimination of error and an understanding of customer expectations for quality. An increased focus on these three areas would have the greatest impact in strengthening a quality culture at this company. Specifically for this company:  ¦ Long-term orientation means that division management has clear plans for the future. Process focus means that the commitment to quality was apparent on a day-to-day basis and managers made time to work on quality improvements.  ¦ FIGURE 3: Identifying company-specific drivers of quality Key drivers Outcome Long term orientation Process focus Quality Understanding expectations FIGURE 4: Identifying company-specific drivers of quality Pre drivers Key drivers Outcome Career development Long term orientation Empowerment training Performance management Career development Performance management Career development Teamwork/BP Sharing Process focus Quality Understanding expectations Understanding expectations means that employees perceive the company as truly customer oriented.  ¦ Towers Perrin then conducted a secondlevel key driver analysis to help the company know where to further focus improvement efforts. The analysis revealed that for this company, creating a culture focused on quality was linked with employees being trained, developed, empowered, and managed effectively (see Figure 4). Furthermore, employees wanted opportunities for growth and development, adequate training, and sufficient authority to do their job well. They wanted to see the company hire, promote, and retain the best talent. They wanted to be supported to challenge tradition with new ways of doing things. And finally, they wanted to see the actions of leaders, managers, and the teams around them demonstrating a commitment to customer service. Towers Perrin I 4 The company is now conducting a formal process of culture change PUTTING IT ALL TOGETHER: BUILDING A CULTURE OF QUALITY The results of these analyses indicate many areas for improvement were needed to build a culture to support the company’s key strategy of quality. However, Towers Perrin helped the company prioritise two key cultural issues to focus on and improve first in order to better support quality. With this guidance, the company is now conducting a formal process of culture change that focuses on the critical priorities highlighted below. Career development and training  ¦ Build and demonstrate a sustained commitment to employees through adequate training and development opportunities.  ¦ Develop effective strategies to recruit, retain,and promote talent. Empowerment and teamwork Support employees when they challenge traditional ways of doing things.  ¦  ¦ Empower employees with the authority to do their jobs well.  ¦ Encourage teamwork and cooperation between work groups. To build a culture that supports the challenging of tradition, enables empowerment of employees, and engages groups to work collaboratively, the company has structured all survey follow-up to be conducted entirely at local level. Corporate HR charges each local HR manager to work with their management teams to identify local issues and drive change. Each local management team then charges an employee task-force to come up with solutions and present them to management, who make decisions regarding implementation. The task forces usually comprise six to ten employees, and are a mixture of high potential employees, volunteers, and those appointed by management. The company has also created a newsletter and has increased local meetings from a quarterly basis to monthly. Action planning and the sharing of progress and results now happen at local levels, empowering teams nd individuals to make and track changes that matter. SUMMARY Tower Perrin’s analysis provided this consumer goods company with information and insight for developing a culture that best supported their business strategy of competing on quality. Towers Perrin identified two critical issues that would have the biggest contribution to culture change. Equipped with this cultural vision and empirical support for it, this company has started change initiatives and i s working with Towers Perrin to monitor progress towards the creation of their new quality-focused culture. The company has developed and implemented Career Development Workshops where employees learn to take charge of their own career and learn how they can be successful in the organisation. The company has also implemented a mentoring program and a 360 ° feedback process. These programmes provide a foundation for building and sustaining training and development opportunities for employees, and as such they are a critical element in the development of an effective strategy to recruit, retain, and promote talent. ABOUT TOWERS PERRIN Towers Perrin is a global professional services firm that helps organisations improve their performance through innovative human capital and risk and financial services solutions. In the human capital area, Towers Perrin helps organisations develop and implement workforce strategies that align with business needs, address critical talent issues, drive higher performance and ensure the right return on their investment in people. Areas of focus include workforce effectiveness; rewards effectiveness; benefit programme effectiveness (including retirement and health and welfare programme strategy design, , implementation and management); assistance with mergers, acquisitions and restructurings; HR function design, service delivery and technology; change management; employee communication; human capital metrics; and employee and organisational surveys. Towers Perrin has offices and alliance partners in the world’s major markets. More information about Towers Perrin is available at www. towersperrin. com. 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