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Turning Results into Action: Action Planning at Henkel

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What makes a company successful? How can attitude, conduct and actions be molded into a coherent, performance-enhancing corporate culture that delivers success to shareholders, stakeholders and …

What makes a company successful? How can attitude, conduct and actions be molded into a coherent, performance-enhancing corporate culture that delivers success to shareholders, stakeholders and customers?

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  • 1. Volume 2, Issue 3, 2007 casestudy Turning Results into Action: Action Planning at Henkel What makes a company successful? How can were regarded as attitude, conduct and actions be molded into a insignificant and later coherent, performance-enhancing corporate culture survey results revealed that delivers success to shareholders, stakeholders an impression that not and customers? These are important questions much had happened, and for any company but for Henkel, the answers to employees became these questions are particularly important because discouraged from participating in future surveys. of the large role that corporate culture plays within In addition, it became increasingly apparent that Henkel’s operations. Founded in 1876, “Henkel surveying employee satisfaction, while having - A Brand like a Friend” is a Fortune Global 500 inherent value, did not facilitate an understanding of company headquartered in Dusseldorf, Germany. the factors that drive the success of a corporation or With more than 52,000 employees worldwide, it is its cultural character. Henkel needed to know more a leader in three strategic business areas that are than merely the level of satisfaction of its employees. dedicated to making people’s lives easier, better Henkel needed to answer two questions: What and more beautiful: 1) Home Care, 2) Personal drives success? What cultural elements need to be Care, and 3) Adhesives, Sealants, and Surface improved in order to improve performance? Treatment. In over 125 countries, people trust Henkel’s brands and technologies. From Dial® soap The search for a suitable system to measure the to Purex® laundry detergent and Duck® brand cultural drivers of success within a corporation duct tape, Henkel brands are part of everyday life. led Henkel to the Denison Organizational Culture Although the Henkel of 2007 is a far cry from its Survey (DOCS). Henkel was looking for a culture origins as a family-owned business, it continues tool that used benchmarks as an integral part of to be significantly influenced by family roots. The its employee surveys and could be executed with significance of the culture that has developed relative ease and within short intervals. Additionally, over the decades is clearly expressed in the firmly Henkel realized that the company as a whole would established corporate principle: “We preserve the need to adopt a proactive approach to address the tradition of an open family.” problems identified in the survey and that it would be necessary to create concrete action plans. An integral part of Henkel’s success has been the value they have placed on the attitudes In 2003, all management levels in Henkel completed and opinions of their employees. Employee the DOCS -- a population around 7,500 worldwide. surveys have been a regular feature within the There were several clear messages from the results. Henkel corporate environment since the 1980s; First, they showed a perceived lack of knowledge of previous projects assessed employees’ attitudes, the Henkel strategy. In addition, Henkel managers satisfaction, and identification with the company. were not sufficiently aware of the Vision and Values These initiatives provided useful information for of the Henkel Group. The results also indicated Henkel, but over time, problems arose within that Henkel employees wanted closer cooperation their employee survey efforts. The survey efforts across departmental boundaries. addressed so many different issues that employees developed high expectations for extensive and Managers received the results for their departments tangible change. The changes that were introduced to share with their employees. This allowed them All content © copyright 2005-2008 Denison Consulting, LLC. All rights reserved. l www.denisonculture.com l Page 1
  • 2. to identify potential areas for further improvement with Customer Focus, and 9% were involved with and to develop action plans. Henkel recommended Teamwork and Cooperation. feedback and discussion beginning with the following questions: The second survey, conducted in November 2004, showed many improvements. Results for Henkel - What are the predominant patterns in the survey overall showed improvements in all areas except results? Team Orientation (see Figure 1). The significant - How do these results fit with your own perception improvements in Mission reflected the intensive of the organization? discussions held after the first survey and the - What conclusions might be drawn from the data intense communication of the Henkel Vision in the with respect to our strategic objectives? business sectors. Significant improvements also - What are the specific deficiencies that need to be occurred in Coordination & Integration and Creating addressed so that we may achieve our goals and Change. targets? The benefit of action planning was also illustrated Feedback workshops were organized in order to by improvements in different parts of the organiza- discuss the survey results and action plans were tion. For example, Business Unit 1 was low in two created to address the changes and improvements Mission indexes (i.e., Strategic Direction & Intent, suggested by the survey. Specifically, the groups Vision) and Consistency indexes (i.e., Coordination & discussed reasons for the low scores in the Integration, Core Values). Specific action plans were various areas, drew their conclusions and, where developed and recorded for several different coun- appropriate, recommended action steps to address tries and departments within this unit. Within each these issues. Approximately 470 action steps were of these countries and departments, action plans for created to address the problem areas identified Business Unit 1 targeted anywhere from one to five by the DOCS. Of these 470 action steps, 47% areas for improvement including Core Values, Coor- were involved with Henkel’s Strategy, Vision and dination and Integration, Vision and Mission. Most Values, 25% were involved with Cross-divisional and of these action plans further specified around three Henkel Overall Cross-functional Cooperation, 19% were involved Henkel Overall courses of action that would be taken to improve Figure 1 = Henkel Overall 2003 to 2004 20032003 2004 2004 2003 2004 External Focus External Focus External Focus External Focus 82 82 83 83 54 54 57 57 44 44 57 57 61 61 66 66 NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA 50 NA NA 63 63 59 59 50 44 44 NA NA Beliefs NA NA Beliefs and and Beliefs NA NA Beliefs and and Flexible Flexible Assumptions Stable Flexible Stable Flexible Assumptions Stable Stable Assumptions Assumptions NA NA NA NA NA NA NA NA 39 39 47 73 75 75 47 73 NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA 64 64 63 63 63 63 72 72 67 67 54 54 70 70 59 59 Internal Focus Internal Focus Internal Focus Internal Focus N =N4531 N = 4531 = 4531 NN 6972 = = 6972 N = 6972 All content © copyright 2005-2008 Denison Consulting, LLC. All rights reserved. l www.denisonculture.com l Page 2
  • 3. each area, for example, “enact cross-di- Figure 2 = Business Unit 1 visional job rotation” and “holding weekly Business Unit 1 Gap Report current affairs meetings”. Defining action- 2003 2004 100 75 50 25 0 25 50 75 100 able plans within many different countries Involvement and departments had an effect on driving Empowerment 68 20 88 change for the broader business unit as Team Orientation Capability Development 54 82 8 23 77 90 a whole (See Figure 2). As a result, Unit 1 Consistency saw a large improvement in their scores Core Values 39 38 77 from 2003 to 2004, especially in Core Agreement 66 25 91 Coordination & Integration Values and Coordination and Integration. 39 38 77 Adaptability In contrast, Business Unit 2 recorded few Creating Change 71 18 89 plans after the 2003 survey and conse- Customer Focus 78 13 91 quently saw little change, and in some Organizational Learning 87 7 94 cases, even decreased in scores on the Mission 2004 survey (see Figure 3). This reinforced Strategic Direction & Intent Goals & Objectives 46 61 27 37 83 88 the importance of recording and develop- Vision 40 42 82 ing specific action plans targeted to the level of the organization where you want Figure 3 = Business Unit 2 Percentile Score Bar on left indicates this group has a higher percentile score Bar on right indicates this group has a higher percentile score Percentile Score for group on left Business Unit 2 for group on right to drive change. 09-Oct-07 Gap Report 2003 2004 100 75 50 25 0 25 50 75 100 The effects of action planning could also Involvement Empowerment be seen at the country-level. Country A 48 17 65 Team Orientation 43 28 15 developed country-level action plans that Capability Development 76 9 85 focused on vision, values, and strategy Consistency which resulted in a 76% increase in scores Core Values Agreement 42 59 11 5 31 64 in 2004 (see Figure 4). However, while a Coordination & Integration 54 50 4 large number of action plans were defined Adaptability for the broader geographic region (which Creating Change 74 8 66 included Country B along with three other Customer Focus Organizational Learning 62 78 2 28 90 80 countries), no plans were identified at the Mission country-level for Country B which resulted Strategic Direction & Intent 34 16 18 in a decrease in Country B’s scores in Goals & Objectives 40 18 58 Vision 2004 (see Figure 5). 38 14 24 Figure 4 = Country A Bar on left indicates this group has a higher percentile score Bar on right indicates this group has a higher percentile score Taken together, these findings suggest Percentile Score Percentile Score for group on left Country A for group on right Gap Report that it is important to incorporate ac- 09-Oct-07 2003 2004 100 75 50 25 0 25 50 75 100 tion planning within the survey process Involvement to bring about positive, tangible change. Empowerment 64 28 92 The results of the 2004 survey indicate Team Orientation Capability Development 63 58 22 25 85 83 that the greatest improvements between Consistency the 2003 and 2004 surveys were in those Core Values 55 34 89 departments or levels that specifically Agreement 26 57 83 targeted a few key areas for improvement Coordination & Integration 32 53 85 and identified a few courses of action that Adaptability Creating Change 52 36 88 would be taken to drive change. Those Customer Focus 66 19 85 levels of the organization that did not Organizational Learning 72 15 87 record specific action plans generally did Mission not change to the same degree. It also Strategic Direction & Intent Goals & Objectives 12 52 38 80 92 90 appears that more was gained by devel- Vision 9 79 88 oping action plans at specific levels of Bar on left indicates this group Bar on right indicates this group has a higher percentile score has a higher percentile score Percentile Score Percentile Score for group on left for group on right All content © copyright 2005-2008 Denison Consulting, LLC. All rights reserved. 09-Oct-07 l www.denisonculture.com l Page 3
  • 4. the organization than when action Figure 5 = Country B plans were developed at broader Country B Gap Report organizational levels. Using 100 75 2003 50 25 0 25 2004 50 75 100 Business Unit 1 as an example, Involvement when action plans were developed Empowerment 63 16 47 at specific levels within the Team Orientation 52 8 44 Capability Development organization (e.g. Unit 1: Spain, Unit 39 19 20 Consistency 1: UK) not only did those specific Core Values 40 2 38 levels improve, but the effects of Agreement 60 12 48 these plans also seemed to bubble- Coordination & Integration 35 8 43 up and drive change at broader Adaptability organizational levels. However, the Creating Change 45 11 34 Customer Focus 18 14 32 effect does not appear to go both Organizational Learning 64 14 50 ways. Action plans developed at Mission broader organizational levels (e.g. Strategic Direction & Intent 48 18 30 an entire geographic region) did Goals & Objectives 46 13 33 Vision not seem to trickle-down to impact 38 0 38 more specific levels (e.g. countries Bar on left indicates this group Bar on right indicates this group within that region). improvement over time, Henkel began using The Denison Action Percentile Score for group on left has a higher percentile score has a higher percentile score Percentile Score for group on right Planner: A Dynamic Tool for Implementing Change, after the 09-Oct-07 Aside from these broad conclusions 2006 survey. The Denison Action Planner is designed to translate about the action planning process, survey results into action by ensuring that the important aspects Henkel also learned the value of of the action planning process are easily recorded, monitored systematically tracking the action and summarized. A Web-based tool, the Denison Action Planner planning process. In order to allows for easy communication and collaboration throughout the improve action planning throughout change process from initial brainstorming to selecting areas of the organization, Henkel needed a focus, and tracking the implementation of actionable items. Using better understanding of the things action planning best practices, this tool helps ensure that the that worked and didn’t work. Not change process is successful and allows organizations to better only was it necessary to improve understand how to make the process a success in the future. upon how action plans are tracked Related Resources but also to track how or if plans were implemented, what the This case study is based on: Deni- timeframes were, how the change son, D. R. & Schlue, R. (2007). process was communicated and Managing Corporate Culture at who was involved. Henkel: Applying the Denison Orga- nizational Culture Survey. Gütersloh, Driven by a desire to ensure that Germany: Bertelsmann Stiftung all areas of the organization see Contact Information Copyright Information Denison Consulting, LLC Copyright 2005-2008 Denison Consulting, LLC 121 West Washington, Suite 201 All Rights Reserved. Ann Arbor, Michigan 48104 Unauthorized reproduction, in any manner, is prohibited. Phone: (734) 302-4002 The Denison model, circumplex and survey are trade- Fax: (734) 302-4023 marks of Denison Consulting, LLC. Email: research@denisonconsulting.com Version 1.0, October 2007 All content © copyright 2005-2007 Denison Consulting, LLC All rights reserved. l www.denisonculture.com l Page 4