A Cultural Revolution
By: JP Folz - InCourage, & Sunny Ghali - HR Director, GFS Calgary
How one company’s attention to culture is helping accelerate performance.
The statistics are quite telling. Between 60% and 80% of all mergers and acquisitions fail to meet the pre-merger expectations. Desired financial performance, market share expectations and other opportunities that seem to be quite evident on paper are rarely realized once the acquisition has been completed and the company is struggling to execute the strategy that was to bring great things. Why would things be different for GFS (Gordon Food Service) when they acquired Bridge Brand Food Services in Calgary in 2002?
GFS Calgary began as a family farm-based gardening operation during the 1930's under the name "F.M. Tamagi and Sons." and eventually grew to become one of the largest independent foodservice distributors in Canada as Bridge Brand Food Service, servicing thousands of customers in Western Canada. In January of 2002 when Bridge Brand was purchased by Gordon Food Service, it marked a new beginning with a new family at the helm. This acquisition was one among others between 1995 and 2002 that ultimately created a new national food service company, operating from coast to coast, GFS Canada quickly grew to be a major player in the over $41 Billion food service industry in Canada.
Developing an Intentional Culture
Tim Sinclair was hired by GFS Canada as new President and CEO of Bridge Brand Calgary (now GFS Calgary) and was charged with aligning GFS Calgary into the National Company. Tim was also responsible for overseeing the cultural integration of GFS Calgary into an organization with 100+ years of experience, rich culture, and commitment to high performance through its Cornerstone Values. . Early on in the acquisition it became clear that Bridge Brand’s management style before it was purchased by GFS was based in ensuring that employees fulfilled the requirements of the job and did so in the expected fashion. Tim Sinclair noted that during this time ‘employees were guaranteed a job for life so long as they made it to work on time, performed their duties as required and overall kept GFS Calgary functioning’. This culture fit with the strategy which was in essence serving customer needs (at any cost). This strategy asked employees above all to do their best in fulfilling their customer’s demands. While this culture was one that was strong in loyalty, it did not do much to inspire high performance, which would be necessary if GFS Calgary was to compete and grow its market share.
In order to help him, Tim Sinclair turned to InCourage Inc. to help with this culture change effort. Tim Sinclair had been involved with a number of different organizations that experienced cultural transformation, so he knew that attention to the ‘culture’ aspects of GFS Calgary was required to ensure that the benefits sought through the acquisition could be realized sooner rather than later. GFS Calgary at the time was the poorest performing business unit in the GFS Canada family and something had to be done quickly to start turning the company around.
The first area of focus for InCourage was to begin building a strong Senior Leadership Team (SLT) at GFS Calgary. Tim Sinclair invited InCourage to design and deliver a customized leadership program that brought senior leaders together to discuss team work, culture and uncover the barriers that they were experiencing. This series of leadership programs (which included one-on-one coaching with some senior leaders) provided a basis for the SLT to move forward with how they were going to engage the organization to grow and deliver on the desired outcomes of the acquisition. The initial focus of the program was to help build the relationships and trust of SLT team members which was critical to gain alignment and move ahead with the focus on culture.
The next step in developing the desired culture of performance at GFS Calgary was to use the Denison Organizational Culture Survey to get an understanding of what the current culture was at GFS Calgary and what area of focus would be necessary for moving the culture in the desired direction. The Denison model was a clear and concise way for SLT members to describe what a high performing culture looks like and the results of the assessment served as a call to action for the organization to focus on certain capabilities to help realize the benefits sought from the acquisition. The survey highlighted some areas that needed attention. Capability Development, Empowerment, and Co-ordination and Integration were among the lowest rated areas of the survey. It was clear to fully realize the benefits of the acquisition it would be essential that employees take responsibility and ownership of their work and perhaps more importantly, strive to bust silos and have better alignment across the business functional areas.
Having a clearer picture of capabilities that needed development was certainly a good start, but given the company’s history of ‘just getting the job done’ and being content with the status quo, it was important to communicate a new vision and operating behaviours. Developing such a commitment statement would make it everyone’s responsibility to do more than the status quo and become a high performing company. InCourage assisted in the creation of this new vision that engaged every single employee in the business to work toward: “Climbing to the Top: Committed to Excellence Everyday Together: This new vision speaks to the passion we all have to make our workplace great and to continue to climb to new heights as an individual and as a team” and to develop clear operating behaviours that every employee can count on and expect from each other at work:
1. We pledge to clearly define expectations and responsibilities and hold each other accountable to follow through on the commitments we have agreed to.
2. We will make our communication clear, complete, concise and accurate. It will include all the relevant stakeholders. It will be timely, courteous and respectful. It will have follow-up and closure and will be accepting of others’ voices.
The new vision and operating behaviours set the foundation upon which the new culture would be built. At this time, Tim hired Sunny Ghali as the Director of Human Resources to help drive the organizational development component that would ensure commitment to the vision, hold the organization accountable to the behaviours, and help facilitate the desired culture change. The next six months were focused on living up to the vision and the operating behaviours. Led by Sunny, InCourage & GFS Calgary collaboratively continued to develop leadership programs on a quarterly basis for the Senior and Extended leadership teams that focused on leadership development and team effectiveness. 
Tools such as the Strength Deployment Inventory and various team exercises and action planning were utilized. Each session focused on bringing tools and processes that team members would reflect upon and bring back to the day to day to help create a high performing culture. In order to help with better co-ordination and integration, each functional area focused on determining how they could work better with each other to bust silo’s during these offsite programs. Cross functional teams would focus on how to take an “enterprise-wide” view of challenges and work collaboratively to create action plans that aligned the differing perspectives.
The next developmental phase that GFS Calgary embarked upon was to complete a needs assessment of any training and skills that were lacking. This needs assessment and subsequent delivery of training to employees helped to address the capability development gap as revealed in the Denison survey. A wide range of training initiatives were rolled out for employees across the organization, each customized to address the specific needs, whether they were in the warehouse or in the office.
Winning through Culture
In order to help accelerate the rate at which the new culture was taking root at GFS Calgary, a company-wide campaign of performance was rolled out. This campaign was critical in helping focus all employees to live the vision and the behaviours of the new culture. The campaign focused on incenting all employees to work together to achieve high performance in three Key Performance Indicators (KPI’s) over a period of six-months. This focus on improving the three KPI’s was critical to engaging all 600 employees to act upon building the desired culture. InCourage worked with GFS Calgary to facilitate learning sessions where functional team members could develop strategies and lead efforts to achieve the desired level of performance.
In short, the organization focused on doing things differently to achieve greater business results. The employees were able to meet the challenge set by the organization and have subsequently further improved upon the standards that were set when the campaign began. To reward the efforts of the employees, the company increased the non-taxable benefits coverage of employees from 50% to 100%. The result of the “100% benefits” effort was powerful in proving to employees that they could come together and execute at a high level of performance in a sustainable manner. This win was critical to the company focusing on improving other areas of performance.
While the work continues with David Barber as the new President there is solid evidence that the culture transformation has been beneficial to both the bottom line and what it is like to work at GFS Calgary. Since 2006, EBIT has more than doubled and they are on pace to triple it in 2010. Retention and turnover have become less of a challenge, new hires have been critical to driving the performance and culture. In the operations side, turnover has reduced by over 300% since 2006. Sunny Ghali notes that 'there is still work to be done to engage front line employees and but we are committed to continuous improvement in all aspects of our business – it’s an ongoing journey.' GFS Calgary is committed to delivering the benefits sought at the time of acquisition and is even outperforming other business units in some key performance indicators, which is a long way from having been the worst performing of all the Canadian Business units. One thing is clear, GFS Calgary is not going to add to the statistics; it is a great example of how focusing on culture can make the difference between a successful integration following an acquisition or one wrought with challenges that never gets to realize the results it intended.
If you would like to learn more about building a high performance culture, join us among other industry experts on November 3rd for the Thought Leaders Forum on Creating High Performing Values Based Culture.