When sales and profits start to fall, a CEO’s knee-jerk reaction may be to push their people harder to achieve results. While this tactic may work in the short term, it is detrimental to the long-term success of an organization. It breeds low engagement, high turnover and a lack of trust in the future sustainability of a company. Instead, skilled CEOs diagnose the foundational problems in their business and treat the cause instead of the symptom.
One CEO whose change leadership has transformed his company’s employee metrics and future trajectory is David Ossip, who was recently listed on Glassdoor’s Highest Rated CEOs list. When he took over as CEO of the global human capital management technology company Ceridian a little over three years ago, he inherited a highly disengaged workforce, a Glassdoor rating below 2 and declining business results.
“My take home after a hard look at Ceridian was that the organization had to reinvent its culture in order to drive proper employee engagement, in turn improving our customer engagement scores and market share,” Ossip recalls.
Ossip had a monumental task ahead of him. Unhappy employees cost organizations and the U.S. economy over $550 billion per year. The problem impacts top and bottom line results and every other business metric that matters. Skilled and purposeful leadership with a deep understanding of what engages people is required to turn around this problem.
Ossip considers himself an entrepreneur at heart, not a corporate executive. He has a successful track record of building startups in the Human Resources space. He met the Ceridian organization shortly after he started his last company, Dayforce, in 2009. Dayforce owned strong workforce management technology for scheduling, planning and tracking employees. Ceridian’s large market presence and great reputation in services placed it at the top of its industry, but it lacked strong innovation and technology. With no new products in its pipeline, it lost market share. The combination hurt both employee engagement and customer satisfaction scores—two key metrics that can make or break the success of an organization.
“When I saw Ceridian, I saw a good opportunity to create something special by taking world-class software and pairing it together with an established organization that had no new product pipeline,” Ossip recalled. A partnership was formed in 2011 with a re-launch of Dayforce under Ceridian’s brand. “We had forecasted 100 customer purchases and ended up selling 483,” Ossip proudly recalls.
The following year, a market survey determined the industry pain points. The survey highlighted that HR professionals were frustrated by the lack of integration and communication between HR computer applications. None of the systems spoke to each other and it made the HR practitioners’ day-to-day difficult by slowing down and limiting business outcomes. The solution: extend the Dayforce technology into the payroll, benefits and other talent management modules so the entire employee experience could be captured and tracked through one application. The market expressed strong interest in the solution, but the move only made sense if Ceridian acquired Dayforce. Ossip accepted the role of CEO of Ceridian once this occurred.
Ossip’s first executive meeting yielded one key consensus: Without high employee engagement, Ceridian could not drive the other changes it wanted and required. Employee engagement had to become the organization’s core focus. Ossip, his team and Ceridian embarked on a disciplined approach to turn the company around. Ceridian, founded in 1932, had a strong history of execution, but forgot why it existed in the first place—its purpose—and the values that drove the business. Plus, not much of the original culture at Ceridian had evolved beyond 1960.
A Need For Change
Ceridian originated as part of IBM. Due to anti-trust laws, the unit was spun out and acquired by Control Data Corporation. In 1993, the company was transformed into Ceridian by the then-CEO. “I think at the time he wanted to create a legacy,” Ossip says. The company was highly diversified and profitable, but lacked focus. It resembled an old bank—barriers halted communication and promoted a more rigid method of planning and decision-making, all without employee feedback. The structures of the company prevented change instead of driving it.
“If you have an organization that can’t change, you will become extinct,” Ossip insists.
“The existing methods of communication were a constraint rather than an enabler. People had great ideas, but no way to communicate to the leaders of the organization and the leaders did not really seem interested in listening anyway. Ceridian was stuck in the 1960’s when it came to their internal processes,” Ossip shares.
The barriers to communication were not only cultural, but physical, too.
“In fact, the first time I went into the main office in Minneapolis,” Ossip says, “I wasn’t even sure I’d be let into the office based on what I was wearing. I showed up to find large flat screens in a beautiful lobby boldly warning those entering of the dress code.” His attire: jeans and a casual shirt.
Ossip recalls uncomfortably entering the “executive floor” where traditional physical structures had leaders sequestered in their offices and administration staff positioned between them and all other employees. Regardless of intent, these structures promoted an “us-and-them” mindset.
“I sort of scratched my head and said, ‘No, this cannot work in today’s environment,’” Ossip explains. He started to think of the processes and programs that promote more open and regular communications.
Among other things, Ceridian instituted a program called “Top Talent” to improve employee/leadership interaction. Under this initiative, employees proposed improvement ideas. The ideas were judged by a team of Ceridian senior leaders. The top five selections were funded, implemented and celebrated.
Another change involved coaching existing leaders on effective communication. New leaders were interviewed on their ability to effectively communicate and manage change, which communicated the organization’s commitment to evolution. Also, the “executive floor” no longer exists.
Ceridian had established a trusted brand around delivering results, but realized this definition was vague and lacked focus on why the organization was started in the first place. Ossip and his team came to the conclusion that their core purpose centered around improving work and life for people—employees and customers alike.
“Our worldwide focus became something more than just paying people correctly,” Ossip explains. “Anyone who was a customer, whether you were an employee, a manager, a CEO or a COO, work and life would be improved by our software and our services.”
In addition, Ceridian sold off businesses unrelated to their established core purpose. It focused its assets in human capital management.
An employee survey revealed people knew what company values were, but did not identify with them. Nor did they believe the organization was living these values. With a clear purpose defined, values could be adopted which would now support and drive the business.
“The first value we chose was around customer focus, which for us was the concept of listening carefully to our customers and acting with empathy towards them.
Second, we spoke about transparency—open communication, maintaining a high degree of integrity and making sure we were accountable for our behaviors.
Third, diligence and optimism. The belief was that you had to be optimistic in order to succeed. That optimism is a planned behavior, meaning it starts with proper preparation and diligence. That preparation leads to knowledge and that knowledge leads to confidence. In turn, confidence drives success. The entire concept was that if you do the proper prep and diligence you will be successful and you should be optimistic.
The last thing we spoke about was agility. By acting as agile individuals we would be prepared and enthused to see new challenges. We knew with proper preparation and diligence that we would achieve success.”
Ossip and his team then ensured an effective program was in place to communicate the new values and ensure that people were living and demonstrating them. They created and distributed a book called Our Way—a series of internal and external case studies showing how their purpose and values drove success and how living those values transformed work and life for the better.
18” letters declaring their new values were plastered on the walls throughout the building. Their purpose was not to impress, but to remind people of these expectations. Company values are reinforced at the start of every meeting and discussed on an on-going basis. Ceridian’s values are now part of the cultural DNA which drives the organization’s purpose.
A Mission Understood
Ossip and his team further defined Ceridian’s mission to ensure everyone knew what they needed to do to remain in line with their stated purpose and values. They are now “creating products and services that will help people enjoy work and life more.”
“For me, the ultimate goal of Ceridian is to become the preferred HR solution chosen by the employee. In other words, if someone is interviewing at a particular company, they ask if Dayforce is used at the organization because they know it will make their work and life better.” Ossip rallied the organization behind this vision, painting a picture for his employees of what the company’s future would look like if they got it right. The message transformed the organization’s energy for the monumental task at hand.
Right People, Right Roles
Ossip recalls recruiting for a previous startup of his. “We grew from 0 to $100 million in three years. We kept hiring until we hit 100 people. We then looked around and thought, ‘Who have we hired?’ How do we use their talents to accomplish our goals? Do we have the right people to achieve success? We had no process in place to answer these questions.” Ossip learned the hard way that recruiting is more than just filling seats in an organization. It requires ensuring the right people fill the right roles and can drive your mission and purpose forward.
“We then had to make a lot of tough decisions to move people to new roles, and even remove people that weren’t aligned with what we needed to do. We basically had to restructure and rebuild the organization,” Ossip says.
Ossip retained this knowledge from past experiences and utilized it to improve Ceridian.
“We typically have candidates meet with about five different people in the company—some who they will be working with and others outside of their department.” Ceridian looks for a purpose and culture “FIT”, first and foremost. These are people who believe in what Ceridian is attempting to do, who like to have Fun, are Intelligent and will work well with others in Teams.
If you flew from Yorkshire, England to California, USA with a co-worker, would you sit in the seat next to them or would you escape to the back of the plane and avoid them? “We want people that want to sit with each other,” Ossip explains. “When it comes to intelligence, we test not if the person knows everything at the time of the hire, but whether or not the person has the ability and aptitude to learn. We also want people that are more interested in a team than a specific title or role.”
Under Ossip’s direction, Ceridian’s interview process now includes examining backgrounds and resumes, and testing for FIT, core communication and convictions. They examine relatability of the potential employee to his/her hiring manager, team and peers.
“If employee engagement and productivity improves, and attrition drops, we know we are getting it right,” Ossip added.
Ceridian implements an anonymous employee engagement survey twice a year with results broken down to the department and team level. They also use a daily employee engagement tool built into their Dayforce product. “We get the results and we communicate them back to the employees and the managers completely openly. We let both the good and the bad out,” Ossip relates.
Ceridian’s key measurement is how employee engagement tracks to customer service experience scores. “We identify the top five areas of organizational improvement and we put in programs to treat those five items. We report back to the employees as to our progress against those initiatives and then we survey again,” Ossip explains.
Ceridian not only looks for triggers of engagement, but triggers of disengagement, too. Triggers of disengagement can be small things. They might be a time-consuming expense process, a poor travel or time off policy, a mandatory dress code, outdated tools or systems or how attendance is monitored. Often, these triggers are the small things you don’t hear about that upset people.
Disengagement triggers cause employees to disconnect from the workplace. When this happens they shift to a 9-to-5 mentality, performance drops, customer satisfaction declines and the company starts missing targets. Organizations with many of these disengagement triggers often struggle to get the type of employee commitment they need to drive engagement and results.
Ossip hosts regular town halls and walk arounds to meet with people in an open forum and listen to their concerns. This is the best way to learn what is going on before it becomes a problem.
“Whether it be revenue, ACV (Annual Contract Value in terms of sales), client retention, or employee attrition, when employee engagement goes down they all go bad, when engagement goes up they all improve,” Ossip reports.
Ceridian regularly surveys their people not only about their engagement, but also concerning their understanding and connection to company values. This includes how well employees and leaders are living the organization’s values. People, managers and teams then identify the areas of improvement required and take action to make enhancements. They also celebrate outcomes. Taking action was the most critical part of Ossip’s successful change management.
One example cited is Ceridian’s Dayforce app launch in 2012. They sold more than 2,800 systems in three years. The biggest constraint with that volume involved implementation. The organization ramped up their implementation team from 100 team members to 1000 people in a three-year period.
In order to allow implementation to keep pace with sales, Ceridian increased the project load for many of their consultants. The decision yielded a revenue increase, but also a decline in employee engagement and employee retention. Indicators warned that revenue would slow if Ceridian didn’t make additional changes to remedy the added strain on employees. Based on employee feedback, they adjusted resources within the workload. In a very short time, employee engagement rose again.
Ceridian’s effective actions resulted in a record-breaking 200 new accounts in one month.
The lesson here is if you continually listen to your employees, seek their feedback and act on valid concerns, you can avoid bad business outcomes. If you let employee engagement issues continue unchecked, the negativity will quickly spread throughout your organization and damage your business.
Ceridian’s Annual Planning process starts in early Q3 for each upcoming year. Planning covers not only financials, but also the underpinnings of what allows the organization to hit its numbers—employee and customer engagement.
“A good portion of our planning and budgeting process involves conversations around people metrics, things like our employee engagement year-over-year, our Net Promoter scores concerning our customer engagement and conversations about important topics like attrition,” Ossip says.
On a monthly basis, Ceridian reports out to top managers in the company about their progress, and they in turn share the information with employees. On a quarterly basis, Ossip shares company results openly to all employees. “We have a company all-hands call where I present for 25% of the time and take questions for the remainder of the meeting,” Ossip explains. All questions are responded to, regardless of how challenging they may be.
On the employee engagement survey side, Ceridian reports out to the managers and employees all the way down to department or team level. Everything is open and shared. When low engagement is discovered, the organization looks at the whole business area with an extra focus on the person managing the team. Based on employee feedback, Ceridian makes changes not only about how the company is run, but also who runs it.
“You know when you’ve got an engaged workforce when you walk through the halls and there’s a buzz—a sense of positive energy inside the office. I contrast this to the first time I walked into the office in Minneapolis. It was like walking into a dark museum,” Ossip recalls. When he held his first town hall meetings, no questions were asked. Nowadays, the meetings run over due to energized employee interaction and feedback. Employees report that there is an open, honest and trusted environment at Ceridian. This has bred more than just engaged employees. It has also impressively accelerated business outcomes.
Over the following 18 months of Ossip’s change management initiative, employee engagement scores rose significantly, and Ceridian’s Glassdoor rating went from under 2 to over 4 on a scale of 1-5. Furthermore, customer satisfaction as measured by their industry’s Net Promoter scores increased a record 25 points year-over-year. On the revenue side, their Dayforce flagship product saw a 70% growth rate year-over-year and the organization became one of the fastest growing cloud companies in the marketplace.
“In addition, employee attrition went down, customer retention went up and our business began to thrive. The inflection point was changing the model of how we engage employees. Employee experience is our number one goal. The second is customer experience, and third is product excellence,” Ossip concludes. Ceridian was one of Canada’s Top 100 Employers for 2016.
Ossip’s vision and direction clearly brought needed change and outcomes to Ceridian. The company’s success lies in a balance of understanding the organization’s purpose and executing on needed business deliverables to fulfill that purpose.
Ossip’s transformational leadership proved, as noted businessman Nido Qubein has asserted: “Your present circumstances don’t determine where you can go; they merely determine where you start.” Ensure your organization understands its purpose—why it was started in the first place—and has a clear business strategy to execute on what it needs to accomplish to fulfill it.
Published on Forbes, 6 July 2016