What It Takes To Change a Company's Culture

Third of three parts

In Part 1 of this feature, I argued that building a strong culture plays a crucial role in whether a lumberyard can move beyond good to become great. In Part 2, I summarized the initial work we at Dunn Lumber did to examine our culture and figure out what needed changing. This third and final installment explores what we did and the results we achieved.

Gary Farber To change our culture, Dunn's management settled on six priority issues:

• Teamwork and communication
• Internal and external customer service
• Employee development and training
• Managerial and leadership behavior
• Attitude
• Employee ownership

Over the following weeks and months we established company values and initiatives for each of the six issues identified. As an example, here's what we did in the teamwork and communication area. Company Values

• We are proud of who we are.
• We honor our history and roots.
• We appreciate style differences.
• We communicate openly with each other and with those outside our company.
• We work together as a cohesive team.
• We practice honesty and integrity.
• We employ good listening skills.

Initiatives

Frequent store and department meetings with employees, monthly at a minimum. The following information will be shared with employees regularly at meetings: all branch specific profit and loss information, company profit and loss information, insurance, safety, company culture, HR, company initiatives and events, and otherwise related information.

• Involve employees in the decision-making process at branch meetings, department meetings, or individually.
• Expand company events to include group efforts that aid the communities in which we exist; e.g., habit for humanity, walk-a-thons, and other philanthropic initiatives.
• Annual employee awards banquet
• Sponsor regular employee group activities; e.g. monthly store hot dog days, pot luck lunches, etc.
• Publish Said & Dunn employee newsletter every other month.

The initiatives were changed, added to, and improved upon over the years, but the values never changed. They were what we lived by and became part of who we were at Dunn Lumber. The culture by no means changed overnight. It was a process. The key was communicating the culture to the employees, getting their buy-in, and getting their participation. Every group of employees has a leader--someone they look up to or try to emulate, someone they follow, whether it is a truck driver, a yard person, or someone in the back office. We made a point to identify those people and get them on board. With their buy-in, we would transform our culture much more quickly, and the culture would have deeper roots.

The process of change and focus on culture was not without its challenges. Some of the management team felt discussing or thinking about culture was nonsense. For a time it was paid lip service. There was familiarity with the nuts and bolts of business and how to run one, but any discussion of culture was foreign. This non-acceptance was observed by the employees and made it more difficult and time consuming to get everyone on board. Eventually those misgivings faded and culture became a part of our lexicon. Change usually has its challenges, and with something as grandiose as cultural change, there will be opposition.

Over time, the fruits of what we set out to do began taking hold. We could see our culture slowly becoming what we wanted it to be. Every six months we asked the employees to complete a questionnaire and critique our culture: Were we remaining true to our values? Were there opportunities for improvement?

We took the results and acted upon them. This exercise was invaluable; employees knew that this "corporate culture" thing wasn't just a fad. It was the essence of who we were, and we were continually going to try and improve upon it with their help. I found that through this whole cultural change process we all became better listeners. Great ideas came from many different people, and everyone was invited to participate.

There were many other aspects and nuances to our cultural change. I can't describe them all, but I can tell you that the result, over time, was far greater than what I had envisioned. We were a team. We were communicating. We were developing leadership skills. We were training. We were providing excellent customer service. Employee attitudes changed and became positive as a result. We lived it! I found myself focusing on the culture of Dunn Lumber. It wasn't an afterthought. It was at the center of my consciousness every day.

The final priority issue which was identified at our managers' retreat in 1999 was employee ownership. I must admit, when I saw that issue identified, I thought it was a pipe dream. I've read where it takes five years to completely transform a culture. Well it was almost exactly five years to the day that the Dunn family began funding an ESOP plan. The employees were now owners, and our culture had come full circle. I was so very proud of what the employees had accomplished and so thankful to the Dunn family for supporting our cultural initiatives. When Dunn Lumber was sold to ProBuild on June 1, 2007, Dunn Lumber employees owned 17% of the company. As I stated earlier, there are many factors in developing and maintaining a dynamic company, but I do believe that without the structured and defined method by which we transformed our culture, the dynamic company ProBuild purchased would not have existed.

During my current job search, a resume writer told me that transforming a culture was a soft skill, not based on something concrete or provable. I disagree. The culture transformation at Dunn Lumber was planned, structured, detailed, and reviewed. We achieved measurable results which showed up in:

• Improved productivity ratios (significant increase in sales per man hour)
• Less Inventory Shrinkage (from 0.8% of sales down to 0.4% of sales)
• Lower workers' compensation claims (our MOD rate was reduced from 1.42 to 0.89)
• A double-digit bottom line

You could see and feel the cultural transformation as you talked with our people. Your company's culture may be strong, weak, or somewhere in between. You may do many of the activities we did at Dunn, such as hot dog days, employee newsletters, or pot luck lunches. But if you have not gone through the process of identifying what values you want your company to stand for, and have not insured that they are alive and well in your company, I urge you to do so. The rewards will far out weigh your expectations.

Gary Farber is the former CEO of Dunn Lumber, Daytona Beach, Fla. Contact him at [email protected].