A Complete Culture Overhaul

Seeking to repair its broken culture, Webasto looked to its own people for answers.

Tuesday, July 18, 2017
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Fridays were the worst.

Morale was critically low at Webasto Roof Systems Americas when Philipp Schramm arrived as chief financial officer in 2013. And the cloud that employees felt hanging over them seemed a bit thicker, a bit darker, on Fridays, he recalls.

The Rochester Hills, Mich.-based manufacturer of automotive sun- and moonroofs -- the North American division of German holding company Webasto SE -- employs roughly 2,000 employees across six manufacturing, distribution and operational facilities, each of which felt the lingering effects from the economic crisis that engulfed the U.S. auto industry in the late 2000s and beyond. Naturally, dwindling demand for new cars meant slowdowns in the production of automotive components. Despite looking for ways to avoid reducing staff, layoffs ultimately began in 2008. Employees were let go in waves -- often 20 or 30 at a time -- over a four-year period, with the last round coming in 2012. As is common across industries, these cuts generally came on Fridays.

Well over a year later, remaining employees were still anxious. Despite the time that had passed since the last batch of layoffs, many feared their turn was still coming, says Schramm.

"As often as I could, I would try to reassure colleagues that we weren't looking to let anyone go," says Schramm, who has since added vice president of human resources and IT, communications and legal to his title at Webasto. "But it was ingrained in a lot of our people that they would eventually get laid off. It was just the history, the baggage that a lot of our people carried around. Our people were working with this feeling that the sword of Damocles was above them at all times."

In addition to the layoffs, Webasto's employees had endured more upheaval in that same span. Most notably, the company's long-time CEO retired in 2007, just ahead of the first rumblings of the financial fiasco that would soon turn the U.S. economy upside down. Webasto would see two more CEOs exit before its current chief executive took over in 2014.

The shock waves caused by instability at the top reverberate throughout any organization. Webasto was no exception, says Schramm, noting that many employees felt "frustrated with management and leadership" in the years that followed the automotive crisis. A 2014 employee- engagement survey confirmed the tangible sense of dissatisfaction that permeated the Webasto walls.That year, Schramm and the CEO were among a group of the company's business leaders who decided to bring in consultants from McKinsey and Co. to help determine how and why Webasto's culture had gotten so corroded, and to set about repairing it.

As part of the McKinsey engagement, the Webasto leadership team requested an organization-wide employee survey. Roughly 500 employees would ultimately take part in the poll, which used an organizational health index that measured how workers felt about issues such as the company's direction, its culture and workforce motivation.

The results were not good. At all. McKinsey regularly collects similar survey responses from clients. Webasto ended up in the lowest quartile for eight of the nine measured dimensions, and its overall score was the lowest that McKinsey had ever encountered.

A year and a half later, however, McKinsey conducted a follow-up survey that found those numbers spiking significantly. For instance, the number of employees feeling confident about Webasto's direction in July 2016 was 22 percentage points higher than at the beginning of 2015. Similar increases were seen with respect to employees' views of company leadership and the organization's culture and climate.

These improvements didn't just happen overnight, of course. The 18 months between those two surveys saw Schramm and Webasto Roof Systems undertake an effort that would help the organization complete a drastic cultural makeover.

Charting a Course

On the heels of that initial engagement survey, one of the CEO's first steps toward overhauling the company culture was to shake up the leadership team -- a move that included naming Schramm vice president of human resources in July 2015.

Schramm was obviously familiar with Webasto's workforce. As the new head of HR, he was charged with helping to lead this cultural turnaround, and he knew that he would need help from Webasto employees.

Affecting any kind of meaningful cultural change is "really impossible" without tapping into the organization's workforce, says Adam Zuckerman, a Chicago-based employee insights practice leader at Willis Towers Watson.

"Leaders often have a very narrow understanding of the company's true culture," he says. "Employees are the ultimate insiders. If you provide them the right system for doing so, they'll tell you what you need to know" about changing the cultural climate.

In search of the "insider" perspective, one of Schramm's first decisions in HR was to send a July 2015 letter inviting all Webasto employees to apply for the 20 seats that would be available at a meeting set to take place the following month in St. Louis. With employees' help, the group would "establish a written vision articulating the leadership culture, within Webasto," he told them in the letter.

Ultimately, 18 participants were selected from more than 100 applicants based on the "quality and thoughtfulness" of their responses to preliminary questions about what they believed were the key attributes of the company's culture and where they saw gaps between Webasto's stated values and actual practice.

"We invited these employees to tell us what they saw as being wrong," says Schramm, "and invited them to be part of the team that would change it."

Over the course of four days, these 18 colleagues teamed to create the Webasto Compass, which identified eight "areas of drive" -- including respect and trust, recognition and celebration, and human-to-human engagement -- that they felt should form the foundation of the company's revamped culture.

The Compass team wanted to take this message to the Webasto workforce, and ultimately opted to host regular "listening sessions" at each of the company's locations, where employees were invited to air their concerns on work topics. By 2016, Schramm and the HR team had documented close to 30 pages worth of feedback.

Learning to Listen

These initial listening sessions revealed the source of some of the negative feelings festering within the organization's workforce.

For example, many felt favoritism was a nagging issue, with employees in various locations expressing anger that those doing comparable jobs in, say, Rochester Hills, were being paid more. Meanwhile, Rochester Hills employees complained about attendance bonuses that were available to others that weren't offered to them.

They had legitimate gripes on this front.

According to Schramm, "we had around 800 different pay rates for our 1,200 hourly colleagues at that time." Based on what he and the Compass team heard from these employees, "we're now down to around 49 hourly pay rates and six pay grades."

Schramm credits these adjustments with helping to reduce turnover at several Webasto sites, such as the one in Lexington, Ky., where turnover rates sat at 60 percent. At press time, the Lexington location has experienced five consecutive months of zero turnover, he says.

These discussions also uncovered some perceptions that weren't based in reality, but still contributed to sagging employee-engagement scores.

One employee, for example, didn't think Webasto had a 401(k) plan. (It does.)

"There was a lot of hearsay, and people believing things that weren't necessarily true," he says. "But the perception was out there, and no one had tried in the past to set the record straight.

"That kind of confusion tells you something is broken. But no one had ever tried to clean up the mess."

To make communication more of a two-way street at Webasto, Schramm initiated the "Listen Like a Leader" program, an internal training effort geared toward helping colleagues make meaningful changes in their behavior and relationships, and sharpen their leadership skills.

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An extension of that first round of listening sessions, "the training itself is not rocket science," says Schramm. "It's just trying to impart some basic listening skills."

The course begins with participants completing a communication profile, which helps them describe their behavioral tendencies to others, to distinguish behavioral patterns in others, and to identify ways to improve communication with different behavior types. Those taking part also develop non-verbal communication skills as well as gain experience in handling confrontation.

The Compass team has since selected a handful of the first LLAL participants to become "listening professors," overseeing these training sessions, which roughly 500 Webasto employees have completed to date.

Culture as Training Tool

Amanda Barnes has worked in HR at Webasto for nearly 12 years. Despite the organization's 100-year-plus history, she describes it as "a new company," and she can attest to the levels of toxicity that existed before programs like LLAL were put in place.

In fact, "when I started here, colleagues in production would introduce themselves and tell me their bet for how long I would stay," says Barnes, a Lexington, Ky.-based training specialist. "I started in October, and the consensus was that I would be gone by December."

For all intents and purposes, these interactions were as close as she got to any kind of new-employee orientation or training, she says now.

"When I started, it was basically, 'Here's your office, here's your computer. Good luck.' "

In 2017, Webasto uses employees' first few weeks and months as an opportunity to familiarize them with the organization's culture, which it now considers one of the organization's strengths (see sidebar).

Barnes now helps lead the two-day "Dojo" training program for new Webasto line employees, where "we try to give them as much as they can learn about Webasto without being overwhelmed," she says. In addition to covering the "usual" anti-discrimination and other HR policies, the training includes a company history as well as overviews of the Compass concept and the ONE Webasto Culture Guide, a global corporate program designed to provide individual business units with long-term direction.

Bryan Halpin has been with Webasto for about two months. He has not taken part in the Dojo training program, but he has already seen much more of Webasto than Barnes did in her early years with the company.

Halpin's current title is rotational developmental trainee, a designation he will carry for his first 16 months or so with the company, as he becomes acquainted with different functions and departments throughout Webasto.

In his first week alone, "I attended a production meeting, and worked a day in the production plant in Rochester Hills," says Halpin. "I expected to be treated like a tourist there, thinking I would get an indifferent response at best. But everyone there was helpful and welcoming, and really excited to show me what they do and how."

Halpin's goal with the company is "to end up in the supply chain department, but this program will also help me figure out if that's what I really want to do," he says. "I'm essentially in sales and marketing right now, but I'm interfacing with other departments and seeing what they do."

Of course, such opportunities didn't exist when Barnes joined Webasto 12 years ago, with her introduction to Webasto consisting of a few off-the-cuff conversations with production workers who didn't expect her to be around in three months, let alone continue developing with the organization over the next decade and beyond.

Now, "when our new colleagues leave Dojo, they have a training plan that gives them the next steps they need to grow, depending on their position," says Barnes. "Our new employees are given so many more opportunities to develop. The learning never stops."

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