Creating a Corporate Culture: Seeking Employees’ Opinions is Step No. 1

NEW YORK - It's no secret in the PR world that an open workplace environment is the backbone to achieving positive employee communications. But the buzz word for the new millennium is "corporate culture" and corporate communicators have found out that defining your company's culture can have a major affect on employee loyalty, retention and satisfaction. "You have to determine what your culture is and where it's going," said David Kistle, senior VP, Padilla Speer Beardsley, Inc., at a Conference Board event here last week. "Employees want a more open culture with more listening, not just acting." The three corporate communicators at "The 1999 East Coast Communicators Conference: Visionary Thinking to Achieving Maximum Results" were Robert Matha, strategic planning counsel, corporate communications, Navistar International and Paul Sanchez, practice director, communications, Watson Wyatt Worldwide. Each agreed that having a vision employees can embrace is the first step to achieving employee communications. Sanchez said the way to determine your company's vision is to ask the employees what they think. It's a simple, yet often ignored, concept. "Research is the opening of the communications process. It's the beginning of the dialogue with the employees," he said. Watson Wyatt conducted an extensive research study in 1997 in which the company rallied 9,100 employees throughout all job levels and industry sectors. "The only way you will create enduring competitive advantage is through your people resources," Sanchez said. In the case of Navistar, a Chicago-based company that produces heavy and medium trucks and school buses, open communication with employees created a drastic change in corporate reputation. Matha said he "made employees winners again" and in turn created a winning company. In 1996, Navistar was on The Wall Street Journal's Worst 10 list, the stock was under $10 a share and there was a labor strife. Today, Navistar is on The Wall Street Journal's Top 10, Business Week's Top 50, the stock surpasses $40 a share and the company has a landmark United Auto Workers contract. Matha attributes the success to creating a "vision the employees could embrace," new leadership, redefinition of the brand and open communication. "We asked [employees], 'What makes you get out of bed in the morning and go to work?" Matha said. When Navistar gained the respect of employees, then, and only then, could the company start focusing on the needs of the customers. Kistle also found that creating a corporate culture for client MMA garnered loyalty and therefore employee retention. The New York-based high-tech company has 300 employees in 10 offices. To determine the appropriate culture for MMA, Kistle said Padilla Speer Beardsley created an employee profile from August to October 1998. The profile included one-on-one interviews with managers and senior staffers, focus groups with employees and a survey of all employees. The focus groups found that the corporate culture was ambiguous to employees and MMA's business strategy and direction was unclear. "We found there was a disconnection between acting and listening," Kistle said. Top staff members at MMA began to realize that the vision for their company needed to focus on an open and less hierarchical environment. Managers needed to listen and act on ideas by employees, recognize employee contributions and improve interaction between offices. MMA put into place an action plan that now includes more e-mail between upper and lower management, more Internet communications, increased use of electronic meetings and mandatory training for all managers. The results were not only a strong, consistent vision for the company, but an increased loyalty among employees. MMA won with employees who would recommend the company to prospective employees and clients, increasing the company's reputation capital and its shareholder value. Navistar, like MMA, made change a positive element in the workplace. Matha noted in his presentation that anxious and frightened employees don't listen and act, they watch and wait. "People embrace change if they can visualize a better end," he said. "If it appeals to their hearts as well as minds." Employees at The Horn Group, San Francisco, are embracing not only successful employee communications, but a national award for Best Employer by Working Woman as part of its 1999 Entrepreneurial Excellence Awards. CEO Sabrina Horn was profiled in the May issue of the magazine and says good compensation and benefits aren't the only criteria to lure and keep employees. "People stay because they feel that their contributions matter and it's not a political environment," says Horn, who launched the company in 1991. She says employees leave because they do not feel recognized or important. At the Horn Group, teams are recognized at weekly staff meetings for contributions and employees receive awards for excellent work. In addition, The Horn Group uses the e-mail system, the company Intranet (The Hornet) and a video conferencing system with its sister office in Boston. At the forefront of this environment should be the CEO, says Horn. "The CEO really has to believe in the culture and lead by example," she says. The Horn Group's clients include The Vantive Corporation, and Commerce One. (Kistle, 612/871-8877; Matha, 312/836-2012, Sanchez, 301/581-4600; THG, 415/905-4000) Fast Facts The Cost of Losing Employees: On average a company loses about $1,000,000 with every 10 professional and managerial employees who leave. Assuming your company has a 10 percent profit, that's a reduction of $100,000 from the bottom line. Source: M.H. West & Co., Inc. Why Loyalty Matters Build Reputation Capital Attract and keep the best employees Reduce the high cost of turnover - recruiting and training new employees Maximize the return on organization's investment in human resources Gain supportive behavior from employees Source: Padilla Speer Beardsley

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