This case study follows the cultural management process of 3UK, a British telecommunications company, focused on rapidly emerging 3G mobile internet services, for the years 2007- 2011. The Walking the Talk methodologies and tools were integral to the cultural change that took place during this time. Kevin Russell, the CEO, has had a long history of working with the Walking the Talk method, starting in 2003 in his previous role as CEO of 3Australia. We hope that some of the 3UK experiences will help you in the development and annual updates of your Cultural Plan.
Hutchison Whampoa Limited (HWL) owns a direct majority interest in 3UK. It is a global corporation spanning many industries and is the largest company listed on the Hong Kong Stock Exchange. The network licence for 3UK was obtained in 2000 and on 3 March 2003 the 3G network was launched promising to bring the benefits of the Internet to mobile communications.
In 2006, the business was still in a loss-making position, the network and devices were thought unreliable and the sales distribution strategy was over-reliant on third parties. In addition, the culture of the organisation was weak for a startup, with a divided leadership team and the best talent on the verge of leaving.
Since 2007 the Company has been focused on building a platform for successful long term growth, based on almost 9,000 employees and its operations. Over the past three years the Company has almost doubled the size of its mobile network, increased its customer base by 77% from 4.1m to 7.2m, whilst also managing to reduce its operating costs by almost 10%. This has resulted in the Company achieving an EBIT break-even position during the second half of 2010, with its network recognised by YouGov as the number one for mobile broadband and smart-phone users.
This dramatic transformation closely paralleled a cultural turnaround. In 2006, their Employee Engagement score was at an all-time low of 43%.
An assessment utilising the Organisational Culture Inventory (OCI) from Human Synergistics showed that the dominant styles at 3UK were the Aggressive/Defensive (red) styles and Avoidance.
All of these results were over the 80th percentile, with Power approaching the 90th percentile. By 2010, the Employee Engagement Score was up to 78% with the (OCI) results from 2009 showing all the Aggressive/Defensive (red) style and Avoidance significantly lower, with Power down to around the 25th percentile. The Constructive styles had moved to almost the 75th percentile, with some work still to be done on the Affiliative style.
It is apparent that 3UK is at the end of one part of its cultural journey and at the beginning of the next. The company has plans for the evolution of its business, which are as transformational as those begun in 2007. In 2010, 3UK was the smallest of the four major brands with its competitors being the merged T-Mobile/Orange network, Vodafone and O2. Today 3UK has a fervent belief that it has the capacity to beat the other mobile operators and is working to change society through harnessing the potential of 4G, which is now seen as the key mobile internet technology.
3UK has made a rapid transformation of its culture, which has enabled it to become the fastest-growing mobile operator in the UK market. The pace of change is unusual in our experience and can be attributed to four critical success factors:
Kevin Russell, 3UK’s CEO, heads a Senior Management Team who have together defined standards for leaders within their organisation. They are mindful of the need to ‘walk the talk’, both as individual leaders and as a team and, therefore, take the process of giving feedback very seriously.
“Carolyn Taylor was a huge influence on us. We listened to her position on the ‘Shadow of the Leader’ and could mentally tick off everything she said. We took on board that a leader has to be vigilant about self-awareness to get the best out of not only themselves but the best from others. Leaders do cast a long shadow and we learned that our behaviour will influence the organisation in ways we can never know.”
Kevin Russell, CEO, 3UK
Kevin accelerated the cultural change through the selection of his management team. He took care to select people who already had a high degree of self-awareness around the impact of their behaviours on business outcomes. This humility, combined with other characteristics of drive, passion and intellect allowed the members of the team to quickly engage their people in the change agenda.
The Walking the Talk tool of ‘Above and Below the Line’ was used to further heighten the level of self-awareness throughout the organisation. The tool defines ‘above the line behaviour’ as behaviour that encourages people to take responsibility when responding to issues, while ‘below the line behaviour’ is focused on blame, justification, denial and avoidance.
3UK uses the words, Challenge, Change and Lead to describe their approach to culture. The brand is increasingly seen as a challenger brand - challenging the competition, challenging the government and regulators and challenging the status quo in the use of technology. These cultural attributes are also embedded in the way people interact.
Leaders have continued to increase the amount of time spent reviewing behaviours in performance discussions and in coaching. Sixty champions from across the business have been given responsibility, as part of their role, to give real-time guidance and feedback on behaviours.
The management team often uses external and internal facilitators as part of their meetings to support the feedback process. In 2011, they took their development further by embarking on regular sessions to review their individual behaviours within the team environment through discussing situations where they felt they had not been 100% successful in achieving their behaviour goals.
The previous leadership team had created uncertainty by focusing their efforts on their own functions, limiting coordinated effort and minimising any sense of shared purpose. This, combined with the dynamic nature of the telecommunications industry, left the organisation with little clarity of purpose. The current management team has endeavoured to provide stability and a shared sense of purpose through providing clear direction and through clearly connecting personal objectives to build a sense of shared purpose across teams and functions.
With all organisations and individuals there are times when values clash and a decision needs to be made about which value has precedence over the other. At 3UK clarity about the behaviours that are valued and appreciated in the organisation has enabled clear and consistent choices when confronted with people and operational challenges.
The target culture behaviours, selected to enable the business strategy, have been consistently role modelled by the leadership since 2007. They were further defined in a top team conference, Inspire 2008, which gave the broader leadership team a framework to use in performance evaluation and coaching. The work on culture pushed up the standards of behaviour and gave the employees a genuine appetite to have a company in which they could have pride. Symbolically, the rollout of the new Performance Management system saw behaviours given equal weight with business outcomes. People who could not adapt to this approach were exited from the business.
Jemimah Parnell, People and Property Director, knew that a great culture was essential to 3UK achieving the turnaround that many sceptics thought was impossible. She was determined to enable a culture that would attract and retain the smart and passionate people that make up 3UK’s employees.
The unwavering commitment to drive a consistent culture throughout the whole organisation provided the momentum for the change.
After their appointment in 2007, the membership of the senior management team did not essentially change. This proved to be of great benefit in effecting rapid change. The members themselves embodied the culture of the organisation and continuously worked on their own development and that of others.
They had a deep understanding that working on the culture of the organisation must follow along-term strategy to ensure credibility and sustainability of 3UK. Each team member was mutually respectful of the others for their intelligence, hard work and openness.
The message of challenge, change and lead has not altered and each behaviour, system and symbol in the organisation has been aligned with this message. Outside the organisation this message was also consistent, with 3UK being seen to challenge the status quo, helping change society through technology and lead with its expertise. After four years, the internal and external brands became consistent with the cultural message.
Confidence was also a key ingredient for driving cultural change and with every success this increased exponentially. For 3UK, network expansion and reliability enabled sales growth. This success built confidence among employees and commitment to the changes that were being made.
In 2006 there were barriers to different parts of the organisation working together. The lack of contact and knowledge sharing between the functions helped build silos, duplication and deep mistrust. The movement to a more open and transparent culture saw remarkable changes in attitude between traditional rivals such as operations and sales. Although it was acknowledged that these relationships would always need nurturing, a genuine belief emerged that the tools and knowledge needed to solve any issue were now embedded at 3UK.
All the nine Levers that Walking the Talk identifies for changing culture have been utilised by 3UK over the past four years. This in-depth look at its journey identifies which Levers were most critical to the cultural change process and the order in which they were used. Some, like the Lever of the Top Team, have been applied and revisited on many occasions, continuing to determine the direction of the organisation. Others, such as the Lever of People Development, have been applied in a timed cascade throughout the organisation with some areas of the business, such as, the Retail Stores and the company’s Contact Centers in India, coming on-line later in the change process.
The order and use of the Levers must meet the changing imperatives of the business and be adjusted in the annual Cultural Business Plan. We hope that unlocking the story of how 3UK utilised the nine Levers helps to inform your ongoing planning process.
1. The Lever of the Top Team
Kevin Russell started the rapid transformation of 3UK in 2007. Kevin has a reputation for turning companies around and 3UK is his third success. His previous role was with 3Australia where he had been CEO for almost 6 years. In that role he oversaw a cultural change program using some of the Walking the Talk methodologies and tools. He knew from experience that to have any chance of success in the UK he needed to make a significant impact on the business in Stage 1.
The existing senior team of 14 people was based on silos and ego-driven. Values were out of touch with the start-up nature of the organisation. For the senior team to be successful at this point in the organisation’s evolution, a new team of passionate, down-to-earth people was needed. A smaller team of six were appointed, with only one person retained from the previous senior group. Most of those who were appointed were already in the company and on the verge of leaving the fractured organisation. All the members of the team appointed in 2007 were still leading the change process in 2010.
This renewal allowed for both cost reduction and cultural alignment. David Dyson, 3UK’s COO, commented ”This one act was the step-change that started the transformation.” The cascade continued down the organisation, with 130 people exited from the most senior three levels.
Jemimah Parnell was appointed as People and Property Director at this time. Part of Jemimah’s role at 3UK, prior to her appointment to the senior team, had been to manage a Culture Survey conducted in September 2006.
Carolyn Taylor had presented the results of this diagnostic, which had utilised the Human Synergistic’s Organisational Culture Inventory (OCI) tool. A similar intervention had begun the transformation at 3Australia. However, in the UK, the report was not well received by the previous management. No action was taken. The OCI report from 2006 showed a deeply avoidant and competitive culture that was highly perfectionistic and defensive. Little constructive behaviours were visible at any level in the organisation. In 2006 the company’s Employee Engagementscore was just 43%.
These cultural and employee results, combined with the commercial challenge, meant that the senior team was required to lead a rapid change program. To help them develop into their roles and to work effectively together, the members of the management team followed individualised programs of development including: the Human Synergistic’s Leadership Styles Inventory (LSI) supported by personal coaching and, more recently, Hogan and MBTI. The focus in the first year was on self-awareness and later on relationship management.
By the end of 2007, the senior team felt there was a need to more clearly define the behaviours they wanted people across the business to embody. 3Australia had spent some time working with Carolyn Taylor and the Walking the Talk methodologies to define their behaviours and after some discussion it was agreed that these behaviours and statements would also be adopted at 3UK. The organisation and its people became defined as one that would Challenge, Change and Lead supported by the behaviours Open and Honest, Taking Responsibility and Keeping your Word.
In 2010, two more members were added to the (SMT) to increase the ‘bench strength’, as increasingly there had been a feeling that the smaller group was becoming too stretched. There was also a recognised need to send a clear signal that there was scope for promotion to the top team.
2. The Lever of Communication
Up until 2007 there had been little transparency about the financial side of the business. This was explained to the employees, as a fear of sharing sensitive information that may be translated incorrectly if it were to reach the market. The information that was shared was done in inflexible monthly hierarchical cascades via functions or through a news update at 3pm on the third day of the week. Communication was limited and lacked relevance and agility. The impact of this was to make people suspicious, fuel rumours and deepen the siloed mentality through limited cross-functional sharing.
Kevin and the other business leaders set about disseminating the vision and situation of the business openly and transparently. Using a very informal style, inviting people to ask whatever questions they wanted, they role-modelled the new culture. Mistakes were now seen as a way of learning. People were able to be honest and say that they didn’t have the answers.
Using the Lever of Communication in this First Stage was directly linked to achieving the business imperative. 3UK began to build a real desire to beat the big guys. They believed they would achieve this through their smart and passionate people. They set about reigniting that passion through open communications, which helped to build trust both internally and externally.
With 3UK operating at multiple sites, open communication became essential to ensure that silos were broken down further. Communications had often been limited to Head Office in Maidenhead. It quickly became clear that the rapid transformation of the business culture required fast and direct communication to all sites, including the Retail stores and customer centres. The business also became more mindful of including people in meetings from outside Head Office, either in person or via teleconference.
Communications were used to talk about the company’s financials, but more importantly, to embed the cultural change. A clear communication plan was drawn up to explain and reinforce the behaviours including road shows, intranet sites, mail drops and team cascades. Plasma screens across the business were used to break news as it happened as well as cycle through other relevant messages.
3. The Lever of Symbols / Quick Wins
In this First Stage, the HR Team saw an opportunity to reflect the culture through being more flexible about the work hours of the organisation. The system at the end of 2006 exhibited the deep mistrust in the organisation, where people were required to be in the office between 9:00 am and 5:30 pm. Managers wanted their workers in sight and available to take instruction. The HR Team instituted a Flexible Working Policy, which gave managers and employees more flexibility about where and when work was completed. People were also given the opportunity to buy five more days holiday. These new systems quickly reinforced the openness and trust that formed part of the Target Culture.
Kevin also took the opportunity to make regular visits to the 3UK contact centres in Glasgow, Mumbai and Pune. There had been previous visits by the former CEO but the advisors felt that Kevin’s visits were symbolic as he spends a great deal of time on the floor talking with them about their issues. His - and visits from other senior team members - helped them feel that they can become an integral and successful part of the business. Today, visits between the UK and India are frequent in both directions.
A major change was also implemented in meeting protocol with a process called ‘Check-in’ and ‘Check-out’ introduced across the business. Check-in allows the meeting participants to share information that may be relevant to the meeting, which may be personal, or more process related.
It invites everyone to contribute to the meeting and allows him or her uninterrupted speaking time. The Check-out time encourages each participant to again share their thoughts on the effectiveness of the discussion, gives them an opportunity to identify the remaining issues and to make commitments on actions to be taken. Symbolically, these processes not only gave a unifying structure to how meetings were to be conducted but more importantly gave an uninterrupted voice to all those who participated.
4. The Lever of Workplace Design
Towards the end of 2007 work was done on Cafe 3 at the UK Maidenhead Office and in similar spaces in the customer centres, creating a physical representation of the new culture. These were designed to be used as gathering places for communication cascades and social events, with an intent that they would help to eliminate silos. These open and relaxed spaces, with symbols on the walls and plasma screens echoing both the external brand and the internal culture have supported the change.
The reception area is also a wonderful place to enter into the culture of the organisation with vibrant colours, welcoming people and displays communicating the customer benefits of the company’s plans. In 2006 the disconnect between a well-resourced reception and the remainder of the office space, reinforced the idea that people at 3UK were not valued. The reception area was remodelled in 2007 and again recently, becoming a well used space utilised equally by employees and visitors eager to explore the technology on display.
Although the back offices have not been significantly redesigned, their structure reflects the culture of openness and transparency. From most places on any floor you can look across and see your co-workers. There are no high barriers from work cubicles or any isolated work clusters. For the main part, the workstations are in linear rows with teammates facing each other, facilitating more interaction and collaboration. Members of the (SMT) have the choice of an office. However, more than half of them have chosen to sit with their teams and their office space is utilised as general meeting rooms.
Levers used in the first stage
5. The Lever of People Development
At the end of 2007, the behaviours had been agreed on by the senior team and in February of 2008 the first 3UK Inspire Conference was held to broaden the development program to the next 50 leaders in the Core Leadership Group (CLG). These conferences have continued to be held annually, allowing for open discussion and resolution of issues as well as reinforcing the cultural messages with the broader leadership team. Carolyn Taylor facilitated the first 3UK conference and introduced them to ‘Above and Below the Line’, a core Walking the Talk tool for taking personal responsibility. This concept brought about rapid change in both team and cross-functional relationships. Previously, there had been a culture of blame and finger pointing. After the conference people were working out how they could change their own situations or facilitate change for customers.
In India, at the Contact Centres, the leadership team began to accept responsibility for any issues they came across whether they were formally accountable or not. Prior to the Conference there was disquiet over their reward structure, which was based on Customer Experience Scores, as they were concerned that all of the inputs into the Customer Experience were not under their control. With a shift in the emphasis away from blame and towards personal responsibility the score has continued to rise, month on month.
A dramatic shift in behaviour was also seen in the Retail stores using this concept. In another conference with Carolyn, the issue was raised that the Retail group often felt like forgotten poor relations. Through a facilitated open discussion it was recognised that they had not been getting as much attention as needed. In turn they accepted they were capable of solving many of their own problems.
As part of the Inspire Conference process, the top 50 leaders not only attended the conference but they all participated in a 360 degree assessment process that had been part of the senior team up-skilling. The Leadership Styles Inventory (LSI), from Human Synergistics, was followed by personal coaching to address some of the leadership traits that needed to be aligned to the new culture and behaviours.
2007 had seen senior team development. 2008 broadened this to the CLG. In 2009 a decision was taken to take the cultural messages further into the business. Thirty Champions were selected by the senior team to support the roll out of a one-day workshop entitled ‘3 Story’, which aimed to consistently introduce the culture to all 3,000 employees based in the UK and to the team leaders of the 6,000 staff employed in India. The roll-out of the culture to the 6,000 Customer Service Advisors in India began in 2010 and was completed in 2014.
The Behaviour Champions received training with the expectation that their continued up-skilling and support for the business would equate to around one day a month.
They performed this role on top of their other duties, working to integrate the role modelling of the behaviours and the on-going coaching into their normal routine. They found that they were most effective when they were working in support of cultural initiatives driven by managers. In 2010 this group was expanded to 60 people to ensure that support with cultural change reached all areas of the business.
2009 also saw the introduction of a two-day leadership development program for Midmanagers called “Fearless”. The content of the program was self-awareness and personal change as a precursor for organisational change and the management of strategic relationships. One member of the senior team attended each program to talk about their personal journey of aligning their own behaviour to the Target Culture. Hugh Davies, Director of Corporate Affairs, comments, “I took my performance review in and openly talked through my own behaviour journey. It shows how I scored myself and how Kevin saw my development. Then I discussed the gaps and the outcome of our conversation.”
2009 also saw the culture re-measured to gauge progress using the OCI tool. There had been significant positive change as discussed in the introduction. (For further information see graphs attached). In addition, the Employee Engagement score had moved from 43% in 2006 to 78% by 2009.
Induction programs and other learning and development programs were also amended to introduce and reinforce the cultural program.
6. The Lever of Performance Management
The integration of the behaviours into the Performance Management system began in mid2009. There were three major planks to the system.
Firstly, the bonus scheme was changed to ensure that there was a direct link between the performance of the company and the work of each individual. The company needed to hit its performance targets before there would be sufficient funds for disbursement as bonuses.
Secondly, an equal weighting was put on the performance of the outcomes generated by an employee as well as the manner in which they achieved these outcomes. This applied to individuals with the exception of the Retail stores and the Direct Sales team who were on commission and therefore had a smaller amount of bonus placed against behaviours.
The basis of the evaluation was a conversation between the managers and employees and a great deal of care was taken to ensure that the quality of these conversations would enable rapid behavioural change. To support these conversations a Behaviour Conversation Framework was embedded in the organisation through workshops and the support of the Behaviour Champions. To get further alignment on behaviours, calibration meetings were held at each level of managers and further information supporting the process was made accessible via the intranet.
Thirdly, all the leaders were set clear leadership objectives to ensure that their bonus was paid against their role as leader. This was in addition to them performing in their individual roles.
The leadership team continuously communicated the message that behaviours were of equal or more importance to outcomes and the changes to the Performance Management System formally reflected this.
In addition to the Performance Management System, 3UK instigated a Recognition System that was linked to behaving in a manner consistent with the cultural aspirations. The ‘3 Cheers’ system, encouraged people to say thank you and to recognise consistent behaviours. From this pool of people some were selected for monthly and annual monetary prizes and the good news stories communicated to the rest of the organisation.
7. The Lever of People Placement
The formalisation of the Performance Management process enabled clearer choices to be made around who would work in the organisation. In Stage 1, Kevin had clarity around the people he needed to quickly transform the culture of the organisation. After using the six Levers previously described, this vision was now transferred to the other leaders in 3UK with the behaviours and values becoming part of the promotion criteria.
Levers used during the second phase
In 2009, as part of the consistent drive to manage unnecessary costs, a decision was taken to reduce opening hours in the Retail business which in turn affected take-home pay. As a result the Employee Engagement scores fell by 11%. By March 2010, the company was no longer tracking to budget and there was a strong push to focus more on delivering outcomes for the business. In addition, 3UK began to sell and support iPhones and iPads.
While there was increased emphasis on meeting targets, it became obvious that the ‘Tipping Point’ of the cultural change had been achieved as the standards of behaviour did not drop. Symbolically, resources continued to be deployed to further embed the culture in the organisation, in particular the Retail stores. Despite the commercial challenge the consistency of focus on people and their behaviours as a way to build a dynamic business culture proved effective. Within 12 months, 3UK had become profitable, the Employee Engagement score had risen 12% and the company was the number one seller of iPhones in the UK after just eight months.
8. The Lever of External Relationships
On arrival Kevin had defined his challenges as leadership development, getting the network solid and then working to remove the barriers to competition.
By 2010, leadership development was well structured and the network covered 97.4% of the UK population and had moved in reliability from 5th to 1st place. The remaining issue was removing the barriers to competition by working through difficult external relationships with the regulator and Government.
The Target Culture of 3UK, defined as Challenge, Change and Lead has also been applied to the way it approaches its external relationships. The regulators and government in the UK are not seen to be as procompetitive as the business would like them to be and since 2007, there has been an ongoing dialogue to shift this position. To many at 3UK it was this idea of an organisation that continuously challenged technology and the market place that attracted them originally – the Challenger Brand.
The Walking the Talk tools and methodologies have informed the way that 3UK approach this dialogue. They use the ‘Above and Below the Line’ tool to expand their thinking on business strategy, helping them to define what is in their control and where they can influence and effect change.
“We don’t flip-flop on issues to suit ourselves or complain about our position - we must be seen as honest and credible consumer advocates. We really believe that resolution of these issues is in the best interests of business and society.”
Hugh Davies, Director of Corporate Affairs
9. The Lever of Business Management Processes
The review of Business Management Processes has been ongoing with many key systems such as planning and budgeting dominated by the requirements of the shareholder in Hong Kong. However, to make the vision and operational plan more open and transparent, the Company Plan was simplified to take up just one A4 page. 3UK employees are now very familiar with this document and there is a shared understanding of overall direction and what the company is implementing to achieve this across the business.
Organisational structure has also been changed frequently in an attempt to match the internal functions to the rapidly changing external environment.
However, these changes have become less frequent in the past year due to the consolidation of the core business functions and the recognition that structural change can be a significant cost to the business.
Company Plan simplified to A4 size and disseminated widely. Organisational structure changed to suit business requirements.Company Plan simplified to A4 size and disseminated widely. • Organisational structure changed to suit business requirements.
Levels used during Stage 3
3UK is now four years into a significant cultural programme that has enabled the leadership team to work more effectively together and to
build their impact through understanding and believing in their own shadows. They have built support and a sense of purpose throughout the
business through a clear and shared direction and they are well on the way to building the profitable, sustainable business they desired
when they embarked on this process in 2007.
The senior team – and their 9,000 colleagues right across the business - now believe more than ever that 3UK has the culture and the
business approach that will enable it to really challenge, change and lead the evolution of the mobile communications industry in the UK for