13.8 End-of-Topic Case: O.C. Tanner: The Quest for Cultural and Operational Change
Gary Peterson stood silently in front of O.C. Tanner’s Strategy Wall. For just a moment, he waxed nostalgic. Almost three decades had passed since he graduated from BYU, taking his first job at O.C. Tanner. Now he was Executive Vice President, Supply Chain & Production. It was Gary’s job to make sure that O.C. Tanner executed to the principles displayed on the wall. He sighed deeply. He was thrilled for the promotion, but he wondered how he would help take O.C. Tanner to the next level. That was now Gary’s responsibility.
O.C. Tanner: The Appreciation Company
Founded in 1927 by namesake Obert C. Tanner, O.C. Tanner pioneered the employee recognition industry. Although little known, the industry was fiercely competitive. Rivals like Michael C. Fina, C.A. Short, ITAGroup, and Omph Marketing constantly pressured O.C. Tanner to look for ways to differentiate itself. This reality led O.C. Tanner to position itself as the “appreciation” company (see Figure 13.8), defining its mission as follows:
We help companies appreciate people who do great work. Because celebrating great work inspires people to invent, to create, to discover. And when people are inspired, companies grow.
What exactly is an appreciation company? O.C. Tanner marketed its value proposition as follows:
To appreciate means to grow.
We believe appreciating people reveals talents, builds confidence, and encourages contribution. And the most influential way to appreciate people is to provide a fertile environment where they can grow.
We live this philosophy day in and day out inside our own family of 1,600 employees, and we turn this expertise outward to teach companies all over the world how to do the same. Because once you understand that business growth is a direct result of personal growth, you want to help people grow as fast as they can.
In short: Appreciation is our discipline, our art, our muse, and our practice. We are in the business of inspiring the best in each other. We are specialists in appreciateology.
O.C. Tanner’s Journey
As Gary pondered the future, he looked back at the journey. He had always enjoyed working at O.C. Tanner, but he recognized an inflection point. Twenty-five years earlier, senior leaders decided to undertake a double overhaul, changing the organization’s culture and its operations.
To survive in a changing world, O.C. Tanner needed to be more collaborative, and it needed to run lean. The good news: Lean six sigma encourages cultural change and empowered employees enable lean six sigma. Gary remembered the lean transformation well. As O.C. Tanner’s Manufacturing Change Facilitator, he had led the lean six sigma makeover. Both changes had been wildly successful—a fact that increased his sense of urgency (see Table 13.4).
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Lean Six Sigma Implementation. By 1999, O.C. Tanner had earned the coveted Shingo Prize. Now, companies from around the world came to O.C. to learn lean six sigma and O.C. Tanner dispatched lean six sigma teams to help suppliers improve their operations.
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Cultivating Trust and Empowerment. By 2017, O.C. Tanner had been named to Fortune’s 100 Best Companies to Work for list. Almost 90% of O.C. Tanner’s employees felt proud of their accomplishments and felt like they made a real difference.
| Where We Were | How Did We Change? | Where We Are |
|---|---|---|
| An established authoritative culture characterized by top-down control. Rather than inviting employee input, leaders simply solved people’s problems for them. | Cultivate a culture of trust | A culture of trust and employee empowerment. Our mindset, and our goal, is to help other people succeed. They now share both passion and their best ideas. |
| A batch operation where order production times were 26 days, quality often failed to hit the mark, and delivery was often non-competitive. | Implement Lean Six Sigma | A lean six sigma operation where order times were 20 minutes, quality was six-sigma certified, and on-time delivery was the standard. |
Keeping the Journey Alive
As Gary stared at the Strategy Wall, he considered its purpose. They had built a physical Strategy Wall to signify permanence. He thought, “The Strategy Wall communicates to our people what really matters—and what they can do to contribute to customer value and O.C. Tanner’s success. The wall communicates O.C. Tanner’s values and invites everyone to stand firm and stay engaged in turning strategy into reality.”
O.C. Tanner had come a long way since he joined the team. Now that he led the team, Gary wondered, “What comes next? How can I help my team translate trust and leverage lean into an enduring competitive advantage?”
| Lead with Humility | Leaders spend time on the floor. They seek input. They teach and encourage. They hold themselves publicly accountable for the success of their people. |
| Respect Every Individual | We develop, empower, and involve all our people. We provide a safe workplace and continually strive to care for the environment. We value diversity. We know we are better together than we are apart. |
| Focus on Process | We understand that processes require good inputs to achieve good outputs. We focus on the foundational 5S practices of sort and shine as one way to insure sound processes. Improvement of all kinds come from involving everyone in solving process problems and learning from our mistakes. We value great ideas, ingenious solutions, and a collaborative spirit. Profits grow when we drive down costs. |
| Embrace Scientific Thinking | We use our scientific problem-solving model, S.T.E.P.S., in our practice of continuous improvement. A3s help us follow the model, learn and challenge ourselves through discussion with others, and create a story for future learning. |
| Flow and Pull Value | We focus on flow to better satisfy customers with efficient processes that produce high quality awards. We only pull materials when we have a customer order. Flow and pull together create value for the company and our customers. |
| Assure Quality at the Source | Our people do the right thing because it’s the right thing to do. We understand that poor quality comes from poor processes. We look to our people, as process experts, to surface problems, solve them, and only pass on high quality. |
| Seek Perfection | Our quality policy is “To touch the fringes of perfection.” Toward this vision, we are disciplined in our adherence to our systems and principles. While we may not ever achieve perfection, we will never stop reaching for it. |
| Create Constancy of Purpose | Our mission is to help companies appreciate people who do great work. Everything we do must be in service of this mission. Our first True North statement is to “impact every life for good.” We strive to do this by providing meaningful work to our people and high impact recognition awards to our clients. |
| Think Systemically | This is the unifying principle upon which all the others depend. Systemic thinking requires logic and creativity, the ability to take things apart and to see how they might work together. Constancy of purpose and continuous improvement rely on the ability to think systemically. |
Questions
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Keeping the Cycle of Change in mind, where should Gary dedicate his time and energy to help embed trust and lean six sigma in O.C. Tanner’s organizational culture?
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Brainstorm one (or two) structural enablers you think Gary could use to take O.C. Tanner to the next level. Develop these sufficiently to be usable “out of the box.”
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Brainstorm one (or two) learning loops you think Gary could use to take O.C. Tanner to the next level. Develop these sufficiently to be usable “out of the box.”