Denison Certification Workshop | May 2015 1 CULTURE DEVELOPMENT & LEADERSHIP CONSULTING THOUGHT...

Denison Certification Workshop | May 2015 1

CULTURE DEVELOPMENT & LEADERSHIP CONSULTINGTHOUGHT LEADERSHIP

CULTURE & LEADERSHIP DIAGNOSTICSCULTURE & LEADERSHIP EVENTS

BUILDING AND SUSTAINING HIGH PERFORMING ORGANIZATIONS AND LEADERS

DENISON CERTIFICATION WORKSHOP | MAY 2015


WORKSHOP SCHEDULE

May 13, 2015NETWORKING BREAKFAST

Welcome and Introductions Culture and leadership Denison Model and link to performance Path to High Performance

Culture change business case

(Breaks and Lunch provided)

GROUP DINNER

May 14, 2015NETWORKING BREAKFAST

Highlights and re-cap of Day 1

Transformation & Turnaround

Strategic Alignment

M&A

Leadership Development

Wrap-up and Q&A

(Breaks and Lunch provided)

CONCLUSION


HIGHLIGHTS & RECAP OF DAY 1


TURNAROUND & TRANSFORMATIONDENISON PRACTICE AREA


OVERVIEW

Understand the critical levers to get business back on track! Assess current reality by reaching out to internal and external

stakeholders and get a broad and deep perspective of the business situation

Generate support for a shared vision for the future to create a strong coalition

Execute (with constant follow-up and communication) while anticipating and managing through the dip as fatigue sets in; and recognizing extra effort


PRIVATE EQUITY COMPANIES

WHAT IS THE LINK BETWEEN CULTURE AND PERFORMANCE?

49PE Portfolio Companies

103 separate lines-of-business (P&Ls)

a)Completed a Denison Culture Survey prior to January 2014

b)Financial data was available for the same time period as the Denison Culture Survey

Study sample includes... Inclusion criteria…

Methodology


GROWTH METRIC

Growth metrics provide an apples-to-apples point of comparison within a diverse sample of companies representing various industries, sizes, etc.

Rolling averages provide a stable estimate:

a) EBITDA Growth*

b) Sales Growth

Focus on Growth

*Two outliers were excluded from the EBITDA Growth analysis

3-year rolling averages(Average growth over a 3 year period)

Methodology


LINK TO GROWTH: TOP VS. BOTTOM COMPANIES

Avg. EBITDA Growth

Avg. Sales Growth

7%

-3%

17%

5%

2.5X

+5X

2.5x EBITDA Growth

+5x Sales Growth

Bottom Half Top Half


LINK TO GROWTH:PREDICTIVE ANALYSIS

Across P&Ls, the Involvement trait was most strongly and consistently correlated with EBITDA Growth & Sales Growth

Where should we stick the crowbar?


CULTURE CHANGE OVER TIME

+ 13 pts. on average from 1st to 2nd culture survey

1st Survey 2nd Survey


BUSINESS CASE


STRATEGIC ALIGNMENTDENISON PRACTICE AREA


OVERVIEW

Align your culture to your business strategy! Clarify the ‘collective’ purpose and the tactics across the

organization to develop a clear and aligned workforce at every level and from every part of the organization

Foster a shared understanding of your vision, values, strategy and goals throughout the entire organization

Help people understand the key organizational priorities and promote a deep sense of ownership


ONE ORGANIZATION?


BUSINESS CASE

Acquisitions > Transformation > Alignment

http://www.earthlink.net/


What would excite you most about integrating Company A? Company B?


http://youtu.be/C4Cv6fL-km8


What would concern you most about integrating Company A? Company B?


http://youtu.be/8DLv5GjEJ5s


CULTURE ALIGNMENT REMAINS A CHALLENGING JOURNEY

The need to: Led to:

Define the desired customer experience

Customer segmentation and re-organization

Design integrated processes and systems

Corporate process improvement team and OSS efforts, training, and education

Empower teams to drive change

Now “teams” reported as the primary way work gets done

In 2013 . . .


Mission (Vision, Strategy & Goals) are becoming less clear or being

viewed with skepticism.Impact in the market is suspect.

Less confidence in our ability to work effectively across the organization to

create the necessary change.Employees feeling less valued and

skill deficits are a concern.

IN 2014…


STRATEGIC CLARITY & ALIGNMENT


MERGERS & ACQUISITIONSDENISON PRACTICE AREA


OVERVIEW

Manage culture throughout the M&A process! Understand the organization’s current growth strategy and culture Conduct pre-deal cultural due diligence Plan for smooth transition and successful integration Continue high performance culture development


BUSINESS CASE “What is your advice for the board?”


UNDERSTAND YOUR CULTURE FIRST

Assess your own culture1

Define strengths you are trying to build2

Define the limitations you are trying to overcome3Define the ideal culture for your target acquisition4


WHAT LEVEL OF INTEGRATION DO WE NEED?

ABSORPTIONTarget companyconforms to acquirerCultural Assimilation

TRANSFORMATIONBoth companies findnew ways to operate

Cultural Transformation

PRESERVATIONTarget companyretains independenceCultural Autonomy

REVERSE MERGERUnusual case of

target firm leadingCultural Assimilation

BEST OF BOTH

Additive from both sidesCultural

Integration

LOW HIGH

LOW

HIG

H

Degree of change in acquiring company

Deg

ree

of c

hang

e in

targ

et c

ompa

ny

Adapted from Marks and Mirvis (2010)


CULTURAL DUE DILIGENCE

ExternalStakeholders

Social Media& Public Data

HR Data On-Site Deal

HighLowInvasiveness

External InternalData location


WHAT LEVEL OF INTEGRATION DO WE NEED?







BEST OF BOTH

Additive from both sidesCultural

Integration

LOW HIGH

LOW

HIG

H


Deg

ree

of c

hang

e in

targ

et c

ompa

ny


This Acquisition


SOCIAL MEDIA DATA ANALYSIS

Talented and hard-working people Overall healthy culturePay & benefits / Work-life balance

Unclear future directionTalent management challenges

Quality of products Employee discounts

SilosShort-term focusLeadership challenges

Acquiring Firm Target Firm

Cultureprofile

Estimate

QualitativeCommentThemes

80% recommend as an employer 40% recommend as an employer


SOCIAL MEDIA DATA ANALYSIS

CompetitorAnalysis 1

2

3

4

5

Overall Culture Work-life Sr Mgmt Compensation Career

Delaware Crate & Barrel Ikea Williams-Sonoma Restoration Harward

40%

55%49%

39%

71%

87%

43% 45%

36% 33%

Recommendas employer

CEO approval


HR DATA & PREVIOUS SURVEY

ArchivalEmployee

SurveyMapping

QualitativeCommentAnalysis

HR documentReview

Conceptual and data mapping based on the comparison of the archival employee survey vs. the Denison survey

Identification of major themes linked to the Denison Model based on qualitative analysis of open-ended comments

Review of HR documents and data – e.g., employee handbook, tenure, performance appraisal


HR DATA & PREVIOUS SURVEY

ArchivalEmployee

SurveyMapping

QualitativeCommentAnalysis

Acquiring Firm Target Firm

Autonomy/

Talentmgmt

Teamwork/Collaboration

Culture

InnovationIndustryleadership

StrategyLeadership

Values Flexibility Teamwork/

CustomerProducts


INTERNAL STAKEHOLDER INTERVIEWS

Semi-structured interviews with the transition Team and leadership







BEST OF BOTH

Additive from both sides

Cultural Integration

LOW HIGH

LOW

HIG

H


Deg

ree

of c

hang

e in

targ

et c

ompa

ny


Target’sexpectation

THE END STATE REVISITED

This Acquisition


SYNTHESIS: KEY INTEGRATION CHALLENGES

SYNTHESIS OF ALL DATA SOURCES TO

IDENTIFY:

1. THE POINTS OF SYNERGY

PASSION FOR THE PRODUCTS AND CUSTOMER

STRONG RELATIONSHIPS

DEAL IN-CHARACTER FOR THE ACQUIRING COMPANY

2. CULTURAL DIFFERENCES

SPEED OF DECISION-MAKING AND OPERATIONS

EMPHASIS ON VALUES AND PEOPLE


SYNTHESIS: KEY INTEGRATION CHALLENGES

SYNTHESIS OF ALL DATA SOURCES TO IDENTIFY:

3. KEY INTEGRATION CHALLENGES DIFFERENT INTEGRATION EXPECTATIONS

MANAGEMENT AND ORGANIZATION STRUCTURE

BRANDING OF RETAIL STORES

TALENT MANAGEMENT

Create a bridge to the integration processTRANSITION

Transition team to plan

integration

INTEGRATION

Integration effort

to create‘one’ business

CULTURAL DUE DILIGENCE

Define the target & Reduce the risks

Deal


LEADERSHIP DEVELOPMENTDENISON PRACTICE AREA


OVERVIEW

Effective leadership is a key driver of performance! Establish and articulate direction and clear priorities Model the values and behaviors that promote consistency and

alignment across the organization Translate the demands of the external environment into action Create and manage high-performance organizations and teams Cultivate environments that maximize human capital and create

aligned action

3 FRAMES

Competencies Culture

3 FRAMES

CultureCompetencies

3 FRAMES

Competencies CulturePersonality

INTEGRATION OF FRAMES

• Leader impact on the culture• Cultural opportunities and constraints [External]

• Leader potential vs. actual performance• Personal opportunities and constraints [Internal]

• View of Internal and External influences on leader behavior• Optimize development to maximize impact on the organization


DOCS(Denison OrganizationalCulture Survey)

APPLES TO APPLES


DLPR (Denison leadership Potential Report)

DLDS(Denison LeadershipDevelopment 360°Survey)

DENISON LEADERSHIP DEVELOPMENT SURVEY (DLDS)ASSESSMENT OF LEADER COMPETENCIES


DENISON LEADERSHIPDEVELOPMENT SURVEY (DLDS)

360 tool based on the Denison model

96 items

Benchmarked against 15,000+ leaders in the normative database

Feedback broken out by rater source

DENISON LEADERSHIP POTENTIAL REPORT (DLPR)ASSESSMENT OF LEADER COMPETENCIES

DLPR

Alignment of Hogan and Denison scales

Complete the 3 core Hogan Personality Assessments

Predicted capabilities or “potential” on each Denison index

Benchmarked scoring around levels of potential

Facilitator’s Guide & Web Course available

The Leadership Potential Report

The Leadership Potential Report

Scoring Key

Denison Leadership Potential Report

51

DLPR

Look to the “gaps”

“Positive” scales

“Negative” scales

INTEGRATION OF 3 FRAMES IN PRACTICEDOCS + DLDS + DLPR

INTEGRATION – 4 KEY CONCEPTS

Nieminen, Biermeier-Hanson, & Denison (2013), Consulting Psychology Journal: Practice and Research.

Competencies

Cu

ltu

re

Personality

ChallengeUnderstand how the

culture may be constraining leader development

DevelopLeverage the culture to

benefit the leader’s development

AgentEquip the leader to be a

champion of positive culture change

FlowBuild on the existing

strengths of the leader and culture

Leader StrengthLeader Challenge

Culture Challenge

Culture Strength

Challenge

FlowDevelop

Agent

1-25 26-50

1-25

26-5

0

Challenges StrengthsCompetencies

Chal

leng

esSt

reng

ths

Cu

ltu

re

PotentialHigh

51-7

576

-99

51-75 76-99

Low

ChallengeUnderstand how culture may be constraining your development as a leader

AgentRealize your potential to lead positive culture change in the organization

DevelopLeverage the culture to benefit your development as a leader

FlowBuild on the synergies of aligned personal and organizational strengths

Challenge

FlowDevelop

Agent

1-25 26-50

1-25

26-5

0


Chal

leng

esSt

reng

ths

Cu

ltu

re

PotentialHigh

51-7

576

-99

51-75 76-99

Low





Challenge1-

2526

-50

X Moderate Cultural Challenge High Competency Strength High Potential

* Competencies that fall in this box may point to unique opportunities to Lead the Culture Forward

Challenge

FlowDevelop

Agent

1-25 26-50

1-25

26-5

0


Chal

leng

esSt

reng

ths

Cu

ltu

re

PotentialHigh

51-7

576

-99

51-75 76-99

Low





X

Clear Cultural Challenge Moderate Competency Strength Low Potential

* Competencies that fall in this box may be at High Risk of Regression

Challenge

FlowDevelop

Agent

1-25 26-50

1-25

26-5

0


Chal

leng

esSt

reng

ths

Cu

ltu

re

PotentialHigh

51-7

576

-99

51-75 76-99

Low





??

Challenge

FlowDevelop

Agent

1-25 26-50

Challenges StrengthsCompetencies51-75 76-99

Teams

EmpowerDevelop

GoalsStrategy

Vision

Coordinate

Values

Agreement

Customer

Learning

Change

1-25

26-5

0

Chal

leng

esSt

reng

ths

Cu

ltu

re

PotentialHigh

51-7

576

-99

Low





Challenge

FlowDevelop

Agent

1-25 26-50

Challenges StrengthsCompetencies51-75 76-99

TeamsEmpower

Develop

GoalsStrategy

Vision

Coordinate

Values

Agreement

Customer

Learning

Change

1-25

26-5

0

Chal

leng

esSt

reng

ths

Cu

ltu

re

PotentialHigh

51-7

576

-99

Low





Challenge

FlowDevelop

Agent

1-25 26-50

Challenges StrengthsCompetencies Composite51-75 76-99

Teams

Empower

Develop

GoalsStrategy

Vision

Coordinate

Values

Agreement

Customer

Learning

Change1-

2526

-50

Chal

leng

esSt

reng

ths Cu

ltu

re C

om

posit

e

PotentialCompositeHigh

51-7

576

-99

Low






BUSINESS CASE “How would you use the Denison tools in designing a

leadership development program?”


LEADER DEVELOPMENT PROGRAM DESIGN EXERCISE

• Pair up or Solo: Spend 10 minutes designing a program for Executive Leaders that builds on what you’ve learned in the Denison Workshop.

• Design considerations:• What is the objective of your program?• What kind of feedback do you want to provide to the leaders?• How will you support their use of the feedback?• What tools (Denison and/or non-Denison) would you use?• How would you order and space the activities or steps in the program?

• Tables: Spend 10 minutes sharing/discussing your program.

Culture Project2014 Q2

Example Leadership Development Program

#1 Workshop

& CoachingDLPR

#2 Workshop

& CoachingDLDSEx

ecuti

veLe

ader

sBu

sine

ss

Lead

ers

#3 Coaching

Action Planning

#4Coaching

Course Correction

#5 CoachingProgress Review

2014 Nov

#1 #2

2014 Nov

2015 Dec

2015 May 2015 June

2015 June 2015 Aug

2015 Aug 2015 Dec

2015 Oct

#3 #4 #5

# External

# Internal

4-6 wks 6-8 wks 12-16 wks

#1 Workshop

& CoachingDLPR

#2 Workshop

& CoachingDLDS

#3 Coaching

Action Planning

#4Coaching

Course Correction


• Pre-work: Hogan Personality Assessments

• Workshop: Program kickoff and setting the foundation for personality and potential Provide background and interpretation support on DLPR Dialogue on composite DLPR results

• Coaching: Personalized interpretation support, sense-making, & feedback Set honest conversations in motion Set draft IDP in motion

#1 Workshop

& CoachingDLPR


#2 Workshop

& CoachingDLDS

#3 Coaching

Action Planning

#4Coaching

Course Correction


• Pre-work: Denison Leadership Development 360° Survey

• Workshop: Setting the foundation for leader actions that create high-performance cultures Provide background and interpretation support on 360° Dialogue on composite 360° results

• Coaching: Personalized interpretation support, sense-making, & feedback Set honest conversations in motion Look ahead to revision of IDP

#2 Workshop

& CoachingDLDS


#1 Workshop

& CoachingDLPR

#3 Coaching

Action Planning

#2 Workshop

& CoachingDLDS

#4Coaching

Course Correction


• Pre-work: Honest conversations

• Coaching: Sense-making on the additional feedback Identify 1-2 priorities for development Brainstorming actions and ideas Creating/Modifying the IDP Setting actions in motion


#1 Workshop

& CoachingDLPR

#3 Coaching

Action Planning

#3 Coaching

Action Planning

#2 Workshop

& CoachingDLDS

#4Coaching

Course Correction


• Pre-work: Action learning and feedback

• Coaching: Progress check: What’s working (or not) and how do you know? Identify obstacles and ongoing support needs IDP update and adjustment Sustainment planning


#1 Workshop

& CoachingDLPR

#4 Coaching

Course Correction

#3 Coaching

Action Planning

#2 Workshop

& CoachingDLDS

#4Coaching

Course Correction



#1 Workshop

& CoachingDLPR


• Pre-work: Action learning and feedback

• Coaching: Progress review with Coach & Boss: What has the impact been for you; Where

might you need to rethink and try again? Identify obstacles and ongoing support needs IDP update and adjustment Sustainment planning


WRAP-UP


YOUR PILOT

25 person Denison Organizational Culture

Survey

1 Person Leadership Development Survey

OR

Your pilot package includes the full survey of your choice, full report generation, and basic interpretation and feedback on

results from a Senior Denison Consultant.


QUESTIONS?THANK YOU!

Denison Certification Workshop | May 2015 1 CULTURE DEVELOPMENT & LEADERSHIP CONSULTING THOUGHT...

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