Sustaining commitment to employee and leadership development during an economic downturn takes real belief in the return-on-investment. Increasing the investment in these economic conditions equally requires true devotion to the principles of development and training. The last few years marked an ongoing trend in which organizations worldwide were forced to cut costs and make tough choices to stay viable. The choices made by these organizations say a lot about their commitment to employee development.
With the uncertainty of an economic recovery, businesses will continue to tighten their belts and will likely further cut or eliminate employee training programs because they are easy short-term targets. Yet companies with robust employee development programs know the benefit of maintaining, even growing, the educational functions of their organizations because they understand how this can increase employee and organizational performance. In fact, dedicating resources, enhancing training delivery methods, and further developing employee talent can actually improve a company's bottom line. These efforts also have been shown to enhance the quality of management and contribute to a level of enduring sustainability - particularly during a long-term recession.
As a leader in the blood banking and transfusion medicine industries, CaridianBCT has found that one of the best ways to live our vision, "For Better Blood and Better Lives," is to make incremental changes to slowly, but steadily, raise the bar on performance-driven leadership.
CaridianBCT: A case study
"CaridianBCT has maintained a commitment to lifelong learning - with leadership development as a core component - since the company was founded in the 1960s," says David Perez, president and CEO. "The current platform, Performance-Driven Leadership, is about changing our organization by connecting leadership skills to business fundamentals in order to grow and expand."
Furthering employee education is such a cornerstone of the CaridianBCT culture that completion of an average of 44 hours of training and professional development for all employees is a prerequisite for all company bonus programs to be paid.
Averaging 44 hours of training is just the beginning. As a medical device manufacturer regulated by the U.S. Food and Drug Administration and other regulatory bodies around the world, CaridianBCT believes that Performance-Driven Leadership, or leadership that is tied to business processes and outcomes, is especially important. After all, it takes us upwards of a year to educate our professional staff and prepare them to be truly effective in their roles. CaridianBCT's investment in Performance-Driven Leadership reflects a long-term view of employee development and supports the growth of our people, products, and processes.
A case for change
"While others may consider training a luxury or a 'nice to have,' we believe it is an investment over the long term. In hard times, it's easy to understand why organizations are cutting back - eliminating merit increases, reducing workforce size, and shrinking support of learning and development - but we see growth opportunities in hard times and understand this is when we need strong leadership the most," Perez says.
Like many organizations, CaridianBCT faced many challenges in 2009 and 2010, not the least of which were slowing growth rates and compressed margins, coupled with continued pressure for cash and profitability to service our debt under private equity ownership. We needed to develop new ways of doing business more efficiently and effectively, and we knew the answer was within our leadership team.
"CaridianBCT was facing many challenges but perhaps none larger than 'growing pains.' We had shared great successes over the years and grew from a small entrepreneurial company into a mature mid-size corporation. As such, the way we did business and the way we behaved had to change to accommodate our size and marketplace," says Stacey Kirkland, chief administrative officer.
Leadership development, as Chief Financial Officer Katie MacWilliams, is fond of saying, "improves our company's financial degrees of freedom." When CaridianBCT's leadership program kicked off in a 2010 Leadership Summit, MacWilliams described the connections between leadership skills and the company's overall financial health. She presented the "case for change" by addressing our financial imperatives - everything from debt covenants to cash flow to the bottom line - and how CaridianBCT must change to further improve our overall financial picture in the shifting global economy.
To position CaridianBCT in our new world environment, we are focusing on leadership development that
- creates a consistent expectation of leadership throughout the company
- provides leaders of all levels with the tools and guidance to better lead the company
- gives rise to a culture and skill set that drives our company to "raise the bar"
- is built on the foundation of our customers, each other and the patients we ultimately serve.
Achieving these goals required that leaders from across the company and the world come together to answer the call for change, mobilize commitment, and define their vision for the future.
The basic principles of physics tell us that making change requires energy. Whether it is moving something that is at rest or changing the direction of something in motion, we must apply focused energy at the right time and in the right place to have the desired outcome. To make change happen at CaridianBCT, we needed energy in the form of resources - budget and time.
Gaining support for this change began with securing an influential champion - in our case, Perez, who has long believed in the value of training. From there, a change management steering committee developed a charter that highlighted how the program would cross the business both globally and functionally.
When promoting why we should increase investment in leadership development, key elements were the need for CaridianBCT to mature as an organization, and the power of leveraging leaders to drive this change in a consistent and uniform way.
The organization had long been committed to individual development (where a leader saw a need and reactively sent an employee to training) but needed a proactive, overarching strategy where managers receive a common language and framework to build an employee's development path. This concept helped the executive team see that our people, and therefore our company, would be better as a result of this program, and that it would pay for itself in a short period.
To launch the Performance-Driven Leadership program, we selectively leveraged established leadership development practices and then customized them to meet our own needs. How we pulled our training together, how we sequenced it, and what tactics we chose to deploy, were all unique. In other words, the ingredients - the eggs, the flour, the butter - weren't new, but how we chose to put them together in a meaningful way - the homemade cake - were all distinct to CaridianBCT.
The inspirational 2010 Leadership Summit brought together more than 100 leaders representing 12 countries to align leadership thinking around change with several business goals in mind - strategically positioning the company for growth; achieving operational excellence; and focusing on our financial priorities. Not necessarily your typical leadership development agenda.
Louise Ritter, an Olympic high jumper, served as the keynote speaker. As facilitators took the group through each step of the program, they would "raise the bar" (an actual high jump bar that was on site as a symbol of the summit's theme) a few notches. At the end of the summit, the bar was at the exact height Ritter jumped to win the gold medal in 1988, symbolically illustrating what it means to raise the bar, one quarter-inch at a time. It took years of slowly raising the bar before Ritter was able to clear the bar at its highest level.
In the spirit of high achievements, attendees were asked to serve in their leadership roles to the best of their abilities, and be open to becoming better leaders and managers of change.
During the summit, leaders addressed ways to
- slow down at key times for learning, diagnosis, and dialog to "power up," enabling accurate, focused, valuable decisions
- realize that yesterday's conventional wisdom is tomorrow's weak spot
- develop individual leadership capacity and organizational maturity
- promote breakthroughs through collective leadership capabilities
- transform first as individuals to transform as an organization
- make changing behavioral expectations a priority so the organization can thrive.
"Playing the part of a leader is a choice; it's about positioning and performing at a higher standard of play," says Kirkland, explaining that attendees engaged in several exercises throughout the summit, including smaller group activities, to encourage collaboration and re-energize participants.
In one such exercise, leaders were given the opportunity and the responsibility to identify barriers to the company's success, create solutions for removing those barriers, and report out to the larger group. Attendee feedback indicated that this approach offered a more transparent view of the entire company, breaking down silos, and creating tighter bonds and better visibility across business functions, cultures, and geographical regions.
Attendees saw firsthand that tackling these issues and transforming the organization required flexibility, collaboration, crossing boundaries, and collective leadership. Most importantly, they saw that these issues required more skills and more attention - more energy - to change.
Our answer? Adopting a new mindset and behavioral attributes that set a higher standard company wide.
"Raising the Bar"
The genesis of leadership development at CaridianBCT was about culture, innovation, values, and the needs of our customers and the patients we ultimately serve. To move forward, we chose to keep those founding principles, but better emphasize business and financial performance.
"We looked at the components of our culture and organizational history as things we needed to leverage and bring forward into the next era of the company," Kirkland says. "With this in mind, we kept many aspects of our past, but are moving away from other aspects - those are the behaviors and attitudes that show up in our 'from' column. The behavioral attributes of the Raising the Bar concept take time to adopt. It's about being open and honest and addressing the positive behaviors we want to retain, but focusing our energy on developing the behaviors in the 'to' column."
CaridianBCT's Raising the Bar leadership competencies were created so we can run our business differently, meet growing demands, and tie leadership back to performance. These leadership competencies and the negative behaviors they overcome were developed and agreed upon by group consensus. To reach this point, barriers to success were identified by each leader participating in the summit, the Leadership Development Steering Committee, and the executive team. Thematically, each group reported the same behaviors, which were then specially worded and categorized to successfully cross all cultures, geographies, and functions within the company.
"Every person in the company takes responsibility for taking care of the customer. Our Raising the Bar behaviors - past, present, and future - are anchored in customer needs and a drive to serve the customer," says Director of Learning and Development Karen Maggio.
Leaders Leading Curriculum
With Raising the Bar, the group's theme and mission for renewal and growth, each leader at the summit dove into a five-and-a-half-day "Leaders Leading Curriculum" split into two modules that spanned 180 days. "The purpose of this curriculum was to be the catalyst for change and change management," Kirkland says. "Participants really understood the case for change, and were able to quickly see how small, incremental steps can have large results. With more than 125 people in attendance, each with many direct and indirect reports, they touch a lot of people and are now equipped to effectively start the cascade of change."
The program began with a look at personal development, using the feedback from 360-degree evaluations coupled with individualized coaching and peer support to optimize strengths and bridge gaps. Objectives included developing personal action plans that outline the skills each leader would work on to move herself toward Raising the Bar behaviors.
From there, leaders were trained in how to communicate when the stakes are high, opinions vary, and emotions run strong. If handled poorly or ignored, crucial conversations can cause teams and organizations to stall out or even self-destruct (according to Kerry Patterson, et al in Crucial Conversations). Managing these communication opportunities effectively, by comparison, allows employees to achieve spirited dialog at all levels in the organization, thereby building alignment, agreement, and interpersonal communication. Used well, these skills can be the tool a leader needs to reach understanding and move change forward.
Finally, each participating leader was asked to keep the summit discussions alive and sustain the momentum by selecting an action leadership project that would reinforce the behavioral changes they had learned.
The challenge was helping leaders select a project that would accomplish this goal but allow them to continue their daily work - few people have the luxury to clear their priority list and start something entirely new. The reality of hectic work schedules was that for most people, the project in question had to be one that the leader was already planning to undertake - now with a new attitude and sense of purpose.
Investing in development = investing in results
The program as it stands today is a result of two years of effort. Planning and initial work on the cultural change began in 2009; full scale launch took place in 2010; and ongoing program planning, growth, and improvements are well underway this year. During this time, we have encountered various programmatic, administrative, and logistical challenges, as expected for any new companywide program. The learning and development team has responded to the organization when concerns or conflicts surfaced but has remained true to the importance and priority of the overall program.
The program as a whole required the company to make a financial investment in its core principles. To move forward with our plans, we had to allocate funds in the budget during a year when we had many competing priorities for financial resources.
Yet, the results are telling.
CaridianBCT saw a correlation between strong financial performance and our focus on Raising the Bar - a focus that drove alignment, common language, and clear behavior expectations for our leaders. In fact, during the two years since we started these efforts, the company has significantly exceeded expectations for earnings (as measured by EBITDA - earnings before interest, taxes, depreciation, and amortization) and for cash flow (cash flow before interest and taxes) and has maintained solid sales growth under poor economic conditions. From 2008 to 2010, CaridianBCT's EBITDA nearly doubled, its cash flow nearly tripled, and sales increased by 14 percent.
From a 10,000-foot viewpoint, any difficulty we encountered was well worth the time and effort it took to overcome it. "What I hear from people who have been through the program is that they are grateful for the opportunity to develop these leadership skills," Perez says. "Bringing that many people together from all over the world for this purpose was unprecedented in our company's history, but employees were very appreciative to have the opportunity to connect in a way they haven't been able to in the past."
Today and the future
Making connections, both among colleagues and between leadership skills and our business imperatives, continues to be our goal in 2011. This year, we are taking an additional 125 people through the Leaders Leading Curriculum, teaching the same skills with the same messaging, but with the benefit of last year's accomplishments as evidence of the program's value. This year's participants will hear from those who completed the program in 2010, who will present the "quick wins" and ongoing successes they achieved while Raising the Bar.
To keep the principles of Raising the Bar at the forefront of our company's conscience, the steering committee has worked with managers across the business to hold mini-summits for various employee groups. These less-formal gatherings allow additional leaders to cover the same thematic points, update their own leadership competencies, and integrate the Raising the Bar principles into their own goals and objectives.
An opportunity for all
Is your company interested in aligning leadership development and expectations to organizational performance? Our experiences have taught us the following:
- First, identify the need for change: Find out what you need to do. What's imperative? What's the pain point? What do you desire, and what is stopping you from achieving it?
- Second, mobilize commitment: Bring together a group that collectively has all the skills and attributes you'll need to organize and execute the program. The best logistics and the best planning won't be meaningful if everyone doesn't know what you're trying to solve for and who's going to help you get there.
- Third, apply energy: Document the objectives, get sign-off, and get to work.
Today CaridianBCT and our leaders continue to move to the right side of Raising the Bar - demonstrating more of the "to" behaviors and fewer of the "from" behaviors, demonstrated by our current sales and financial outlook as we become more efficient and effective. It is clear that we are a higher-performing organization with clearer responsibilities and processes, but we know we're not yet done. This is a worthwhile process and a journey, and we're just getting started.