When Mike Garty joined Lippert Components, Inc. (LCI) as its Director of Leadership Development in 2012, the organization was looking to transform its business culture in a manner that would bring it to prosperous new heights.
Today, LCI is a global leader as a supplier for the recreational vehicle, manufactured housing, trailer, and bus industries. But ten years ago the organization was hit hard by the Great Recession, leading to unwanted but necessary layoffs and plant closures.
As LCI started positioning for recovery, Garty says its leaders concluded the organization would need to drastically change how they led if they wanted to thrive, and not merely survive, in the current conditions. Leadership wanted to send the message that as LCI began scaling for growth, the needs of the organization’s employees, particularly on the front lines, were top of mind.
“Our CEO and executive staff recognized that we knew how to manage, but we needed to learn how to lead and take care of our people.”
In the ensuing years, LCI deployed a cultural transformation strategy built on fostering trust-based relationships between the organization’s leaders and the employees they manage. Garty, in his role as a Director of Leadership Development, executes these strategic priorities on a team of 11 strong, training and coaching leaders from the executive level all the way down to the plant floor.
So far, the numbers show these relationships have paid off for employee and employer alike. In its 2017 Annual Report, LCI shared its employee attrition rate had dropped by 72% over a five year timeframe. The organization also disclosed it had exceeded $2.1 billion in sales revenue. LCI attributes these achievements to the “Everyone Matters” philosophy (inspired by Bob Chapman) fueling its cultural transformation.
The values of cultural transformation
One of the secrets to LCI’s successful company culture transformation is that the organization learned the important role leaders play in culture early on.“Culture reflects leadership. It reflects the local leader,” Garty says. And because of this, we’ve been intentional about teaching what leadership is–we teach, train, and develop our leaders top to bottom.”
Garty shares that LCI carries high expectations for company leaders, and with good reason. The relationships leaders build with employees are essential to driving the ever-elusive employee engagement in their workforce. For Garty, that means leadership has to go beyond connecting with employees over work matters only.
“You have to recognize that the work we do is what brings us here, but it’s not what keeps us here.”
A successful leader will take the time to get to know employees, their families, and their interests. Through these interactions, company leaders must also demonstrate a healthy degree of emotional intelligence, prioritizing things like care, compassion, appreciation, and recognition.
To operationalize these qualities, LCI developed five core values that both exemplify it’s leadership philosophy and model its aspirational identity:
- Passionate about winning.
- Team play with trust.
- Honesty, integrity, candor.
- Caring about people.
- Positive attitude.
“We have a set of core values that we developed based on not just who we are, but who we want to be,” Garty says. “Anyone in a leadership role has to embody those values. Anyone who we bring into the organization has to embody those values. Our leaders are assessed and measured by those values.”
Garty says that LCI makes careful and deliberate decisions about the people it selects to lead the company. Leaders that embody these values, he explains, should be trying to do more than just help the company make money. They should enrich the lives of the people they work alongside.
“As a manufacturing company, that’s our center mission: to make lives better,” Garty says. “It’s not to make a profit or a greater product. You have to do those things or the company goes away. It’s really about the heart of the people.”
The role of subcultures in LCI’s cultural transformation
An earlier quote from Garty hints at another reason why LCI’s cultural transformation has been so successful. When Garty says culture reflects the local leader, he puts an emphasis on the word “local.”
As much as a core leadership team can meticulously craft mission, vision, and values for culture, the company’s “local” leaders, who manage varying work sites and departments, will have different interpretations as to how to communicate those tenets to employees. Another name for this phenomenon is “organizational subculture.”
Subcultures arise anytime a local leader (and the employees they manage) make a meaningful imprint on the way cultural behaviors, traditions, and values are observed within their domain. As of this writing, LCI has more than 60 locations spread across the U.S., the U.K., Ireland, and Italy. Garty recognizes that even though the company has a firmly articulated cultural vision, the sheer diversity found in these plants means some degree of differentiation is inevitable.
“We have a culture we want to see throughout our entire company,” Garty says. “But we know it’s going to look and feel a little different in every facility because teams will reflect the local leader.”
But differences should not necessarily be discouraged. Garty stresses that company culture must be built on a foundation of trust, and trust, in turn, requires honesty to function. From his perspective, there is honesty in acknowledging that company leaders are human and fallible.
“These core values are who we say we’re going to be on our best day–and you know we don’t always have our best days,” Garty says. “So how can we live these more today than yesterday? How can we live them more tomorrow than we are today?”
This trust-first approach even informs the way LCI deals with subcultures as part of its acquisition strategy. Instead of attempting to erase the existing cultures of the companies LCI acquires, Garty says the organization’s approach is to reach out with listening sessions to get to know the people and businesses better. From there, they can integrate cultures in a way everyone is more willing to embrace.
“Our approach is wanting to go in and care about their people,” Garty says. “They understand their business better than we do. It’s about going in and understanding what’s working.”
Accountability is the key to cementing cultural transformation
One of the final pieces to LCI’s cultural transformation, perhaps the one that ensured its success, revolves around accountability. Garty explains that continuous improvement is a priority for LCI, but growth and development can’t happen if no one is held accountable to it.
“We teach that accountability is not consequences, and it’s not discipline or punishment,” he says. “Accountability is pressure. It’s a process to ensure success.”
LCI keeps its culture accountable through a disciplined process that mixes both quantitative and qualitative methods. The company leverages annual and quarterly surveys, employee listening sessions, and its “Everyone Matters” culture committee all to find out what’s working, what’s not, and what needs to improve.
But sometimes, accountability requires a direct, visible action from leadership.
Garty shares that a few years back, LCI was at risk of slipping back on its attrition metrics–which the organization tracks weekly. LCI’s CEO Jason Lippert worked with executive leadership to figure out what could have caused this change. Garty says the team concluded that one of the core values–”Caring about other people”–had become de-emphasized in its leadership styles. In response, Lippert made a visible push to re-prioritize this value throughout the entire organization.
“Jason, himself, became a spearhead for it and drove the accountability,” Garty says. “It was Jason’s heart and his passion, truly caring about people. He wanted to see that this was a hallmark of what our company stands for.”
These visible gestures of accountability from leadership are important, particularly as it concerns the notion of continuous improvement, because people are purpose-driven. Garty, echoing the words of many other engagement and culture leaders, underscores that employees want to feel value in what they do each day.
“We’re trying to empower everyone at every level to own their area, and recognize it has an impact on everyone. They can have impact and they can have control.”
If leaders can make employees feel that they’re improving, whether it’s on themselves, their work, or what they all build together, employees will find purpose in their culture. In turn, that sense of purpose has the power to make employees feel ownership over the cultural transformation process, cement the desired change, and drive home that everyone, does indeed, matter.