Change Management Positive Momentum

Page ContentLike many companies in the printing industry, Heidelberg USA Inc. was hit hard by the 2001 recession. Its problems were compounded when an early foray into digital printing didn’t work out. From 2001 to 2005, the company laid off half of its 1,400 workers. Employees who survived the cuts were in shock. Morale was at an all-time low. Corporate leaders tried reorganizing the company using a traditional business process analysis, but they realized they weren’t achieving results. HR leaders then convinced the executive team that the crisis was a cultural as well as a business issue and that they needed to think in a new way to regenerate the company.“We needed to push ahead and not forget the past, but deal with the past as we moved forward,” says Susan Nofi, senior vice president of HR and general counsel for the U.S. division of the German printing press manufacturer. “We needed to identify how we were going to be viewed by our customers in the future.”Corporate leaders turned to a change process called “appreciative inquiry.” Rather than focus on the many problems, they chose to focus on strengths to determine how to reorganize the company’s structure and re-energize employee morale. Finding What’s RightAppreciative inquiry is a philosophy and an organizational development process that is used to produce positive change. “Instead of asking ‘What’s wrong with this organization?,’ it’s asking ‘What’s right?’ and ‘What gives life to this organization when it’s most alive?’ ” says David Cooperrider, a professor of social entrepreneurship at the Weatherhead School of Management at Case Western Reserve University.For HR professionals, appreciative inquiry provides a road map for “building a strengths-based view into the entire organization, from talent management to whole-system planning processes to a sustainability agenda and the ways in which the company can bring its strengths to the world,” Cooperrider says. As a graduate student, he and others developed the theory and practice of appreciative inquiry in 1987.The process commonly has four phases:Discovery. What are the organization’s strengths?Dream. What are the possibilities?Design. How can you make these ideas happen?Destiny. How do you implement and sustain the change?The centerpiece of the process is the appreciative inquiry summit, a large-group session where all four phases take place. Organizations are encouraged to invite all stakeholders, including employees, customers and vendors. At first glance, the concept may appear simple. But Cooperrider and others have written numerous books detailing how to define and plan an appreciative inquiry initiative, how to ask the right questions in the right way, and how to implement the ideas that emerge from the inquiry.“What’s being born here is a third type of management that’s not top-down, nor is it bottom-up,” Cooperrider says. “It’s macro. It’s whole.”Numerous organizations, among them the American Red Cross and McDonald’s, have successfully used the appreciative inquiry process, he says.It’s more than positive thinking. “Appreciative inquiry is a process for change management; it’s not an icebreaker for a meeting,” says Diana Whitney, president of Corporation for Positive Change, a global consulting cooperative in Chapel Hill, N.C., and co-author with Cooperrider of Appreciative Inquiry Handbook for Leaders of Change (Crown Custom Publishing Inc., 2008).“It accelerates change and transformation.”It’s based on the premise that everyone has something to contribute, Whitney says. “HR people have to be willing to be open to different ideas. ... Appreciative inquiry is not trying to change people. It brings people together to collaboratively change their organization.”At struggling Heidelberg USA, more than a third of the workforce was invited to four regional summits, where employees representing all departments and levels were asked to envision the company’s future. Longtime customers also were invited. The two-day summits started a healing process that re-energized workers in a “cathartic exercise,” Nofi says. HR leaders asked employees and others to recall a time when they felt good about the company. Restoring PrideTo Heidelberg employees, who always felt pride in their customer service, the closure of six of 10 regional offices was a severe blow. One woman said she used to proudly wear her Heidelberg T-shirt to her son’s baseball games. After the downsizing, she realized she wasn’t wearing the shirt anymore. She wanted to feel that pride again, Nofi recalls.Group exercises were conducted to help employees imagine how the Kennesaw, Ga., company could reinvent itself. Employees were seated with others they didn’t know well and told to ask each other what they envisioned the company would be like in the future. For example, the head of the company exchanged ideas with a service technician.In the vision born from the summits, the employees saw Heidelberg as being known once again for its world-class customer service.Once the employees were engaged, “we asked them, ‘What do we need to do to get there?’ ” recalls Peeran Mukadam, Heidelberg’s director of human resources and organizational development.From that vision grew “One Call, That’s All,” a strategic initiative in which each employee is empowered to resolve a customer’s issue and “I don’t know” is forbidden.Another project involved retraining service technicians to be more proactive. They are no longer sent to simply fix a broken machine; they are sent to improve the client’s business. “What we did to change attitudes was to give them permission to engage with these customers when they wanted to,” Nofi says. Service technicians are now encouraged to make recommendations to customers, which generates leads for the sales teams. The return on that $280,000 training investment was 1,200 percent. In the first year, the company saw an increase in annual revenue of $3.5 million from service technicians’ referrals to sales, Mukadam says.The organizational changes prompted adjustments to the compensation system and engagement programs. After several years of salary freezes, the service technicians now earn bonuses from the sales leads they generate. The process worked so well that it was rolled out to other units within the Heidelberg group worldwide. To build employee trust, the company designed software that enables employees to determine quickly whether their leads qualify for bonuses. “It was very clear and transparent,” Mukadam says.The focus on the company’s strengths attracted customers’ attention.Customers “talk about it being night and day dealing with us then until now—all with less money internally,” Nofi says. The Heidelberg spirit is back “because everybody knows what their responsibility is to the customer,” she says. “We are able to define ourselves to the customer in spite of everything that’s happened in the industry.” She adds: “Appreciative inquiry can energize an organization even in tough times because it begins the conversation with possibilities instead of problems.” Sustaining CultureGreen Mountain Coffee Roasters Inc. has used appreciative inquiry to solidify a culture of sustainability and foster an environment of growth.“Our company was already founded on principles of high collaboration and high employee engagement … so the concept of appreciative inquiry fit right in,” says Kathy Brooks, vice president of organizational development, internal communications and culture.When she was hired in 2001, she was asked by founder Robert Stiller to bring appreciative inquiry to Green Mountain, based in Waterbury, Vt. They convened a 2003 summit to “grow the organization,” Brooks says. The theme was “increasing world benefits through positive and sustainable growth.”Establishing a theme provides a framework for discussion, she says.Sustainability wasn’t a new concept internally. “But we were searching for a way to let the world know that business and sustainability weren’t mutually exclusive,” Brooks says.Topics discussed at that first summit include “profit with a purpose,” “shared success” and “leadership at every level.”“We wanted to increase the benefit that we had in the world and in our communities,” she says. “To do that, we had to grow. Because the more profitable we are, the more we can benefit the world.” About 100 people participated, including employees from various levels in the company and stakeholders such as customers, vendors and board members. Green Mountain held two more summits in 2004 and 2005. The 15 guiding principles developed at the 2004 summit still steer the company, Brooks says. They emphasize “doing the right thing,” appreciating differences and finding opportunity in conflict, among other values.Appreciative inquiry “became embedded in the business,” Brooks says. “When project teams get together and work, this is a methodology they gravitate toward.”New employees are introduced to the appreciative inquiry philosophy during orientation. Leaders go through a separate orientation, focusing on positive leadership. The company has even changed its terminology to present a positive approach: Mandatory sexual harassment training is called “Developing a Respectful Workplace,” for example.Despite all the changes, Brooks still encounters skeptics. “Some people are leery that it’s just a flight of fancy, and I want to assure people that, if used properly, it’s a business tool. It’s also a way of thinking about the organization.”The number of Green Mountain employees grew from 512 in 2003 to 5,800 in 2012, while annual revenue increased from $116,727 to $3.9 million during the same period. Employee retention was 92 percent in 2012. Founder Stiller says appreciative inquiry has contributed substantially to the company’s growth. He’s such a fan that his family foundation is donating $10 million during the next five years to Champlain College in Burlington, Vt., to advance education about and use of appreciative inquiry. Realizing PossibilitiesPeople usually ask whether appreciative inquiry adds value, says Reggie Stover, vice president of HR, people and talent development at Fairmount Minerals of Chardon, Ohio.In one eye-popping example of savings that grew from an appreciative inquiry summit, the company saved $900,000 in 2012 after working with a vendor to switch from cardboard boxes to reusable and recyclable bulk bags.Like Green Mountain, Fairmount Minerals uses appreciative inquiry to develop a culture of sustainability. One of the largest producers of industrial sand in North America, Fairmount Minerals held its first summit in 2005 and has held two more since then.“This is part of our strategic planning,” says Kristin Lewis, who, as director of sustainability and engagement, is part of the HR team.At the 2005 summit, some participants produced a skit. One man pretended to be a windmill and talked about energy alternatives, Lewis recalls. Today, the company has arrays of solar panels in Ohio and Wisconsin to help generate energy for its facilities.At the 2011 summit, employees, customers, suppliers and neighbors were encouraged to “bring your inspired self” to the three-day event to dream up innovative ways to improve sustainability.In one free-flowing exercise, participants were asked to “Imagine it’s 2025 and Fairmount Minerals has just been recognized by Time magazine as the most sustainable organization in the U.S. What does that look like?” Participants envisioned projects that had earned the company the honor. Before each summit ends, every resulting idea or goal is assigned to one of 13 sustainable development teams that implement such proposals. The teams operate independently, reporting to Lewis monthly. As a member of the U.S. Global Compact, the company pledges to report on all goals in an annual corporate social responsibility report. If the goals aren’t reached, the company reports why, Lewis says.As an incentive, the company’s annual sustainability goals are tied to the employee bonus program, representing about 50 percent of total bonuses.A growing number of customers, vendors and other stakeholders have participated in each summit. While some executives question having customers in the room for such open discussions, Stover has no qualms.“Customers have the opportunity to see what we are doing and how we are doing it, how we give back to the community,” he says. “They see the value that it creates for our employees internally and the external value to them and the community.”Lewis adds, “We’ve always felt it was a good opportunity to get all the voices in the room, whether they’re the same as ours or different.”In 2011, the 760-employee company generated $5.7 million in value related to its sustainability projects, according to its annual report for that year. The company also met 97 percent of its sustainable development goals, including 1 million consecutive safe working hours.Fairmount Minerals has a retention rate of more than 86 percent among full-time and part-time employees, compared with a 76 percent average for the manufacturing industry and 69 percent for the mining industry, Lewis says.Appreciative inquiry “is not just a summit. It’s how you work and live day to day,” she adds. Dori Meinert is a senior writer for HR Magazine.Web Extras Video: Appreciative Inquiry: A Conversation with David Cooperrider (The Drucker School) Website: Appreciative Inquiry Commons (Case Western Reserve University’s Weatherhead School of Management) Website: Green Mountain Coffee Roasters Website: Fairmount Minerals Website: Champlain College summit< Book: The Power of Appreciative Inquiry: A Practical Guide to Positive Change (Berrett-Koehler, 2010)