Jim Goodnight, the Co-Founder and CEO of SAS once stated, “Ninety-five percent of my assets drive out the gate every evening. It’s my job to maintain a work environment that keeps those people coming back every morning.” That mindset has obviously worked. Since its inception in 1976, SAS has delivered unprecedented revenue growth and profitability. Under Goodnight’s leadership, it has become renowned for its innovation and corporate culture. His commitment to work-life balance has earned SAS a place on best workplaces lists worldwide, including No. 1 on the Fortune list for the US and No. 1 on the Great Place to Work Institute’s multinational ranking.
In this post, we’ll look at another organization that believes energized employees, equipped with the knowledge and tools necessary to deal with and support change, are an essential part of successful organizational transformation.
Thanks to Joanne Reid of JReid Consulting for sharing this story.
The Healthcare of Ontario Pension Plan (HOOPP) provides defined benefit pension plans today for more than 300,000 Ontario healthcare workers. It seems they have been doing a fine job. Following the great recession in 2008, HOOPP out-performed Canada’s major plans, placed in North America’s top ten, and was recognized in Bloomberg News as “the best managed pension fund in North America”.
HOOPP recognized that changes were needed to embrace the 21st Century. Ontario’s health sector was changing, including increasing funding challenges, changed delivery models and partnerships, and labour mobility. Responding to those challenges and opportunities, the organization revised its strategic plan, introduced new products and services, implemented organizational changes including new players, roles and performance expectations, and delivered significant technology changes. The impact on the 400 plus staff was enormous.
Victoria Hubbell, Senior Vice President, Strategy and Stakeholder Relations, recognized that staff needed additional support to respond to the waves of change sweeping the organization. She launched the Building Resilience and Agility initiative to equip them with the knowledge and tools they needed to manage their work and personal lives and optimize their contribution during the transformation.
HOOPP wished to increase strategic focus and help their people and teams manage and embrace change by giving them knowledge and tools to strengthen individual and organizational resilience and agility. Success would be assessed based on a) enhanced employee engagement, b) pension plan member/client satisfaction scores (both measures had been in decline), c) and culture change. The initiative would include change support throughout the organization, including management and employees, through workshops, personal coaching and follow-up sustainment support.
Joanne Reid, the contributor of this case, had previously worked with HOOPP’s executive team to gather information in support of their strategic planning and stakeholder outreach efforts. A certified Resilience coach and facilitator, she was then selected to carry on with the workshops and provide follow-up coaching and change support for the organization.
The initiative involved:
- data-gathering and goal-setting (corporate, divisional and individual)
- one day workshops for the majority of HOOPP management and staff
- 2 follow-up coachings
- sustainment sessions
- support with sustainment strategy, in collaboration with divisional change champions
- coaching support for management
Joanne conducted a pilot with three groups to gauge the suitability and effectiveness of the training. She also conducted an orientation session with the executives. To fill the ongoing sustainment need, HOOPP certified two internal people to carry on after Joanne’s departure.
Employee engagement increased 29 percent in Year 1 and 15 percent in Year 3, reaching 91 percent in Year 4. Engagement continues over 90 percent. A survey after Year 2 revealed that 77 percent of employees were continuing to apply what was learned in their work and personal lives.
Also interesting is the fact that member/client satisfaction increased 4.4 percent in Year 2 to 94 percent and 7.9 percent in Year 3 to 96.5 percent. Member/client satisfaction continues over 90%. Is this a reflection of the improvements in employee engagement? Perhaps. Much research supports the connection.
Another fan of HOOPP’s performance is Marty Parker. Parker is the founder and Managing Director of Waterstone Human Capital and founder of the Canada’s Most Admired programs. He published Culture Connection: How Developing a Winning Culture Will Give Your Organization a Competitive Advantage in 2012. In the book, he states “The results at HOOPP speak for themselves. Pension plans in general are in shortfall, particularly following the recession. But HOOPP emerged from 2009 fully funded—in fact, it was 102 percent funded, with $31.1 billion in net assets available for benefits (an increase of $4.4 billion over the previous year). The performance trend continues: in 2010, the fund was valued at more than $35.7 billion. HOOPP’s culture set the stage for this performance. And for that I credit Crocker and his team. Someone else will now be coming in to take the reins when Crocker retires at the end of 2011. HOOPP is set up for success, but it took time and it took an understanding of what the company’s core values and beliefs were. Changing organizational culture requires leadership commitment and proper execution. It also requires time. But it can be done.”
In Year 3, the Waterstone Board of Governors named HOOPP one of “Canada’s Most-Admired Corporate Cultures.”
How Great Leaders Delivered
There were a number of enabling factors that helped the project achieve success:
- Strong strategic intent around fulfilling the pension plan’s promise to health care workers provided the foundation and motivation for the Resilience and Agility initiative
- Early roll-out in one division, demonstrating “walk the talk” commitment from the sponsor followed by two groups who were facing significant and very different challenges and opportunities…and their gratifying reactions and results
- Selecting a leader, in Joanne, with the skills and capabilities to deliver the change initiative effectively.
Additional factors in HOOPP’s success included robust strategic planning, stakeholder outreach, a leadership academy and wellness initiatives. Says Joanne, on her involvement in the project, “On the notion of sustaining change through challenging times, HOOPP has been creative in its efforts to make a leadership and change initiative thrive in its culture. Program champions held ongoing community of practice and town hall sessions on building resilience and agility to strengthen the application of the learnings to the work and to help sustain behavioural changes. They also developed a very creative video presentation for the Board.”
How much did the Resilience and Agility initiative contribute to HOOPP’s remarkable performance? It’s hard to say. However, based on SAS’s stellar performance and Marty Parker’s findings, there is no question there is a causal relationship. A recent article by Alex Edmans in the Harvard Business Review, “28 Years of Stock Market Data Shows a Link Between Employee Satisfaction and Long-Term Value” sums it up quite nicely. Edmans states, “Does employee satisfaction improve firm value? The answer to this question is not obvious. While it seems natural that satisfaction will facilitate worker recruitment, retention, and motivation, investing in it is costly. So the question is, do the benefits outweigh the costs? The answer is a resounding yes. In a paper in the Academy of Management Perspectives, summarized in a TEDx talk, I studied 28 years of data and found that firms with high employee satisfaction outperform their peers by 2.3% to 3.8% per year in long-run stock returns – 89% to 184% cumulative – even after controlling for other factors that drive returns. Moreover, the results suggest that it’s employee satisfaction that causes good performance, rather than good performance allowing a firm to invest in employee satisfaction.”
Employee engagement is an even richer concept, as it involves employees being satisfied with their jobs and work life, but also truly engaged and contributing to the success of the organization and its clients. It is employee engagement that HOOPP measured.
So, if you find yourself in a similar situation, put these points on your checklist of things to do in future endeavours so you too can be a Great Leader. And remember, use Project Pre-Check’s three building blocks covering the key stakeholder group, the decision management process and Decision Framework best practices right up front so you don’t overlook these key success factors.
Finally, if you have a project experience, either good or bad, past or present, that you’d like to have examined through the Project Pre-Check lens and published in this blog, don’t be shy! Send me the details and we’ll chat. I’ll write it up and, when you’re happy with the results, we’ll post it so others can learn from your experiences. Thanks
Drew Davison is the owner and principal consultant at Davison Consulting and a former system development executive. He is the developer of Project Pre-Check, an innovative framework for launching projects and guiding successful project delivery, the author of Project Pre-Check – The Stakeholder Practice for Successful Business and Technology Change and Project Pre-Check FastPath – The Project Manager’s Guide to Stakeholder Management. He works with organizations that are undergoing major business and technology change to implement the empowered stakeholder groups critical to project success. Drew can be reached at email@example.com.