Volume 2, Issue 3, 2007

casestudy
were regarded as insignificant and later survey results revealed an impression that not much had happened, and employees became discouraged from participating in future surveys. In addition, it became increasingly apparent that surveying employee satisfaction, while having inherent value, did not facilitate an understanding of the factors that drive the success of a corporation or its cultural character. Henkel needed to know more than merely the level of satisfaction of its employees. Henkel needed to answer two questions: What drives success? What cultural elements need to be improved in order to improve performance? The search for a suitable system to measure the cultural drivers of success within a corporation led Henkel to the Denison Organizational Culture Survey (DOCS). Henkel was looking for a culture tool that used benchmarks as an integral part of its employee surveys and could be executed with relative ease and within short intervals. Additionally, Henkel realized that the company as a whole would need to adopt a proactive approach to address the problems identified in the survey and that it would be necessary to create concrete action plans. In 2003, all management levels in Henkel completed the DOCS -- a population around 7,500 worldwide. There were several clear messages from the results. First, they showed a perceived lack of knowledge of the Henkel strategy. In addition, Henkel managers were not sufficiently aware of the Vision and Values of the Henkel Group. The results also indicated that Henkel employees wanted closer cooperation across departmental boundaries. Managers received the results for their departments to share with their employees. This allowed them
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Turning Results into Action: Action Planning at Henkel

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? These are important questions for any company but for Henkel, the answers to these questions are particularly important because of the large role that corporate culture plays within Henkels operations. Founded in 1876, Henkel - A Brand like a Friend is a Fortune Global 500 company headquartered in Dusseldorf, Germany. With more than 52,000 employees worldwide, it is a leader in three strategic business areas that are dedicated to making peoples lives easier, better and more beautiful: 1) Home Care, 2) Personal Care, and 3) Adhesives, Sealants, and Surface Treatment. In over 125 countries, people trust Henkels brands and technologies. From Dial soap to Purex laundry detergent and Duck brand duct tape, Henkel brands are part of everyday life. Although the Henkel of 2007 is a far cry from its origins as a family-owned business, it continues to be significantly influenced by family roots. The significance of the culture that has developed over the decades is clearly expressed in the firmly established corporate principle: We preserve the tradition of an open family. An integral part of Henkels success has been the value they have placed on the attitudes and opinions of their employees. Employee surveys have been a regular feature within the Henkel corporate environment since the 1980s; previous projects assessed employees attitudes, satisfaction, and identification with the company. These initiatives provided useful information for Henkel, but over time, problems arose within their employee survey efforts. The survey efforts addressed so many different issues that employees developed high expectations for extensive and tangible change. The changes that were introduced

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to identify potential areas for further improvement and to develop action plans. Henkel recommended feedback and discussion beginning with the following questions: - What are the predominant patterns in the survey results? - How do these results fit with your own perception of the organization? - What conclusions might be drawn from the data with respect to our strategic objectives? - What are the specific deficiencies that need to be addressed so that we may achieve our goals and targets? Feedback workshops were organized in order to discuss the survey results and action plans were created to address the changes and improvements suggested by the survey. Specifically, the groups discussed reasons for the low scores in the various areas, drew their conclusions and, where appropriate, recommended action steps to address these issues. Approximately 470 action steps were created to address the problem areas identified by the DOCS. Of these 470 action steps, 47% were involved with Henkels Strategy, Vision and Values, 25% were involved with Cross-divisional and Henkel Overall Henkel Overall Cross-functional Cooperation, 19% were involved Figure 1 = Henkel Overall 2003 to 2004 2003 2003 2003
External Focus External Focus

with Customer Focus, and 9% were involved with Teamwork and Cooperation. The second survey, conducted in November 2004, showed many improvements. Results for Henkel overall showed improvements in all areas except Team Orientation (see Figure 1). The significant improvements in Mission reflected the intensive discussions held after the first survey and the intense communication of the Henkel Vision in the business sectors. Significant improvements also occurred in Coordination & Integration and Creating Change. The benefit of action planning was also illustrated by improvements in different parts of the organization. For example, Business Unit 1 was low in two Mission indexes (i.e., Strategic Direction & Intent, Vision) and Consistency indexes (i.e., Coordination & Integration, Core Values). Specific action plans were developed and recorded for several different countries and departments within this unit. Within each of these countries and departments, action plans for Business Unit 1 targeted anywhere from one to five areas for improvement including Core Values, Coordination and Integration, Vision and Mission. Most of these action plans further specified around three courses of action that would be taken to improve
2004 2004

2004

External Focus External Focus

82

82

83 83 54 54 44

57

57
NA

44

57 57

61 61 63 63

66 66 59 59

Flexible Flexible
73

50 NA NA 50 44 44 Beliefs and and Beliefs NA NA

73
NA
NA

NA NA NA NA NA NA NA

NA NA NA NA NA NA NA NA NA NA Beliefs and and Beliefs NA NA Assumptions Assumptions NA NA NA NA 47 NA NA NA NA NA NA NA NA

Assumptions Assumptions NA NA NA NA NA NA NA NA NA

Stable Flexible Stable Flexible

75 75

Stable Stable
47

NA

39 39

64

64

63 63 67
67

63 63 70 70 59 59

72 72

54

54

Internal Focus Internal Focus

Internal Focus Internal Focus

N =N4531 N = 4531 = 4531

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NN 6972 = = 6972 N = 6972

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each area, for example, enact cross-divisional job rotation and holding weekly current affairs meetings. Defining actionable plans within many different countries and departments had an effect on driving change for the broader business unit as a whole (See Figure 2). As a result, Unit 1 saw a large improvement in their scores from 2003 to 2004, especially in Core Values and Coordination and Integration. In contrast, Business Unit 2 recorded few plans after the 2003 survey and consequently saw little change, and in some cases, even decreased in scores on the 2004 survey (see Figure 3). This reinforced the importance of recording and developing specific action plans targeted to the level of the organization where you want to drive change. The effects of action planning could also be seen at the country-level. Country A developed country-level action plans that focused on vision, values, and strategy which resulted in a 76% increase in scores in 2004 (see Figure 4). However, while a large number of action plans were defined for the broader geographic region (which included Country B along with three other countries), no plans were identified at the country-level for Country B which resulted in a decrease in Country Bs scores in 2004 (see Figure 5). Taken together, these findings suggest that it is important to incorporate action planning within the survey process to bring about positive, tangible change. The results of the 2004 survey indicate that the greatest improvements between the 2003 and 2004 surveys were in those departments or levels that specifically targeted a few key areas for improvement and identified a few courses of action that would be taken to drive change. Those levels of the organization that did not record specific action plans generally did not change to the same degree. It also appears that more was gained by developing action plans at specific levels of

Figure 2 = Business Unit 1

Gap Report
100 75

Business Unit 1
2003 50 25 0 25 2004 50 75 100

Involvement Empowerment Team Orientation Capability Development

68 54 82 8 20 23 88 77 90

Consistency Core Values Agreement Coordination & Integration

39 66 39 25 38 38 77 91 77

Adaptability Creating Change Customer Focus Organizational Learning

71 78 87 7 13 18 89 91 94

Mission Strategic Direction & Intent Goals & Objectives Vision

46 61 40 27 42 37 83 88 82

Figure 3 = Business Unit 2

Percentile Score for group on left 09-Oct-07

Bar on left indicates this group has a higher percentile score

Bar on right indicates this group has a higher percentile score

Gap Report
100 75

Business Unit 2
2003 50 25 0 25 2004 50 75

Percentile Score for group on right

100

Involvement Empowerment Team Orientation Capability Development

48 43 76 28 9 17 65 15 85

Consistency Core Values Agreement Coordination & Integration

42 59 54 50 11 5 31 64 4

Adaptability Creating Change Customer Focus Organizational Learning

74 62 78 2 8 28 66 90 80

Mission Strategic Direction & Intent Goals & Objectives Vision

34 40 38 14 16 18 18 58 24

Figure 4 = Country A
09-Oct-07

Percentile Score for group on left

Bar on left indicates this group has a higher percentile score

Bar on right indicates this group has a higher percentile score

Gap Report
100 75

Country A
2003 50 25 0 25 2004 50 75

Percentile Score for group on right

100

Involvement Empowerment Team Orientation Capability Development

64 63 58 22 25 28 92 85 83

Consistency Core Values Agreement Coordination & Integration

55 26 32 34 57 53 89 83 85

Adaptability Creating Change Customer Focus Organizational Learning

52 66 72 19 15 36 88 85 87

Mission Strategic Direction & Intent Goals & Objectives Vision

12 52 9 38 79 80 92 90 88

Percentile Score for group on left

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 right

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09-Oct-07

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the organization than when action Figure 5 = Country B plans were developed at broader Country B Gap Report organizational levels. Using Business Unit 1 as an example, Involvement when action plans were developed Empowerment Team Orientation at specific levels within the Capability Development organization (e.g. Unit 1: Spain, Unit Consistency 1: UK) not only did those specific Core Values levels improve, but the effects of Agreement Coordination & Integration these plans also seemed to bubbleAdaptability up and drive change at broader Creating Change organizational levels. However, the Customer Focus effect does not appear to go both Organizational Learning ways. Action plans developed at Mission broader organizational levels (e.g. Strategic Direction & Intent Goals & Objectives an entire geographic region) did Vision not seem to trickle-down to impact more specific levels (e.g. countries improvement over time, Henkel began using The Denison Action within that region). Planner: A Dynamic Tool for Implementing Change, after the Aside from these broad conclusions 2006 survey. The Denison Action Planner is designed to translate survey results into action by ensuring that the important aspects about the action planning process, of the action planning process are easily recorded, monitored Henkel also learned the value of and summarized. A Web-based tool, the Denison Action Planner systematically tracking the action allows for easy communication and collaboration throughout the planning process. In order to improve action planning throughout change process from initial brainstorming to selecting areas of focus, and tracking the implementation of actionable items. Using the organization, Henkel needed a action planning best practices, this tool helps ensure that the better understanding of the things change process is successful and allows organizations to better that worked and didnt work. Not understand how to make the process a success in the future. only was it necessary to improve 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: Denitimeframes 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 Organizational Culture Survey. Gtersloh, Driven by a desire to ensure that Germany: Bertelsmann Stiftung all areas of the organization see
2003 2004 100 75 50 25 0 25 50 75 100 63 52 39 16 47 44 20 8 19 40 60 35 2 38 48 43 12 8 45 18 64 11 34 32 50 14 14 48 46 38 18 30 33 38 13 0 Percentile Score for group on left Bar on left indicates this group has a higher percentile score Bar on right indicates this group has a higher percentile score 09-Oct-07

Percentile Score for group on right

Contact Information
Denison Consulting, LLC 121 West Washington, Suite 201 Ann Arbor, Michigan 48104 Phone: (734) 302-4002 Fax: (734) 302-4023 Email: research@denisonconsulting.com

Copyright Information
Copyright 2005-2008 Denison Consulting, LLC All Rights Reserved. Unauthorized reproduction, in any manner, is prohibited. The Denison model, circumplex and survey are trademarks of Denison Consulting, LLC. Version 1.0, October 2007

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