Case Study

In the mid 1990s a major High Street Retailer made a strategic decision to refocus its brand on the health and beauty market. The organisation had grown over many years, acquiring different businesses in various regions of the country, each with quite different cultures and ways of working. The challenge facing the Directors at the time was how to get this disparate, and at times dysfunctional, organisation rallied around a common goal.

Getting started

The Company started by spending over a year in consultation with its staff around the Country to develop a series of “Stands” - principles around which its Mission should be based. Finally it ran a competition to knit these stands (perhaps we might call them strands for the sake of the metaphor) into a single simple mission statement.

From this, a plan was devised to roll out the new Mission along with a set of teamworking practices using the principles and tools of continuous improvement. At this stage the Company adapted the culturetracker survey to provide information on likely areas of resistance to the changes which they needed to make in behaviours, especially at Store and Area Management levels.

Tracking the culture

Working with members of what is now Culturetracker.com Limited, the Retailer’s Board of Directors established a formal set of values, linked to their new brand image, to be combined with and complement the new direction of the business as indicated through the Mission and Stands.

The survey was repeated each year throughout the change programme and showed:

• No change in the first year - this in fact underpinned the accuracy of the cultural survey instrument as, at that time, the programme was still in its planning stage. (The overall index was identical to two decimal places to the previous year!)
• A significant change in year 2, when the change programme was rolled out to all the stores, in most metrics on the survey instrument, except within one key support function in the business.
• After managerial changes, the third year again saw significant improvements in most aspects of the culture, including the area where there had previously been resistance.
• In the fourth year smaller change was noticed and the new level of culture started to plateau out.
• In the fifth year, further change occurred as the Company started to link its cultural changes into managerial performance indicators and to key business performance metrics such as shrinkage, absenteeism, staff retention and budget variance.

Putting some structure behind the 'events'

In addition to training and communication events during the roll-out period, the Company made a number of fundamental structural changes to the way it did business at a strategic level and in its relationships with staff. It set up three key tools which were of critical importance in embedding new ways of working.

1. A Balanced Scorecard, pulling together the major business metrics in support of the strategy.
2. The Project Management “House” which enabled large performance leaps (using Business Process Re-engineering principles) through the use of project management disciplines. Among other things these helped it:
   • Transform the speed of roll-out of new modern stores aligned to the Company Mission
   • Open a record number of pharmacy outlets
   • Develop a themed approach to local store development
   • Capture over £6m of waste through productivity improvements
3. A structured ideas and innovation generation system for managing small individual improvements at Store level. This included a central panel to tie together and communicate best practice from all the small incremental improvements emerging from over 700 sites around the country.

Each of these three tools is explained below.

The Balanced Scorecard

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The example shown here is a cut down version; the scorecard was used to critically re-examine the strategic nature of many of the Company’s then rather large list of pet projects, resulting in a dramatic reallocation of resources around the key strategic themes of the business Mission.

Once established, the scorecard was rolled out to Area Management level and integrated into the performance management system.

The Project Management "House"

This was not a permanent structure but used existing people outside their functional roles in a type of matrix organisation.  The Balanced Scorecard acted as both the repository for results and as a continuing check on the relevance and strategic importance of the projects.

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The three core programmes derived directly from the business strategy and were managed from Board level with Director accountability for each programme (Programme Leaders).

Within each programme, there were a variety of overlapping and inter-dependent projects sponsored by the Programme Leader and managed by a Programme Manager.

The structure also enabled individuals and teams elsewhere within the normal functional structure to be shown (shown as “normal roles” in the diagram) where input and support was required in order to make the projects successful. It was the responsibility of project team leaders to gather the necessary support and resources but they were able to elicit action through the Programme Manager and the responsible Director to remove barriers.

Ideas.net (the name has been amended)

This team was headed by the MD and captured ideas from staff at all levels which resulted in awards for individuals and teams, immediate implementation of suggestions where possible or, where common themes emerged, the setting up of a project team to develop a more systematic solution.

These three key strategic tools were supported by new reward and recognition systems as well as evolved communication and teamworking methods at Store level in order to embed the new culture for the long term.

Throughout the whole process the annual culturetracker survey reports helped assess the impact of change and guide future direction.

Did they all live happily ever after?

Even after a number of ownership changes in recent years, the Company’s rebranded image is still critical to their current strategy and the cultural values which were first started over 10 years ago are still very apparent in the service and style of the Stores today.