A few years ago, I realized Kloeckner Metals was facing a pretty serious problem: Our culture was broken.
This isn’t a problem unique to Kloeckner. A lot of businesses are dealing with culture problems, and the consequences are far-reaching. Without a clear culture, companies will grapple with a lack of trust, poor communication, high turnover, and severe limitations on their ability to grow. Company culture is critical to a business’s success and your employees’ satisfaction. But culture doesn’t create — or maintain — itself. It’s up to leadership to take the first steps toward defining culture and implementing real change.
The warning signs of a broken company culture
It was easy to pinpoint the source of Kloeckner Metals’ cultural disconnect: The company was built through acquisitions. Speed of integration is crucial during the acquisition process, especially financial and business integration, so that’s what we focused on. But cultural integration doesn’t happen on its own. If you’re not purposeful and intentional about culture, which we weren’t, you will get what you get.
But we couldn’t blame everything on acquisitions. Kloeckner Metals is part of a legacy industry — with a long history of doing things a certain way. The industry has traditionally been defined by long, hard-working hours and an attitude that the workplace is for production, nothing else. The workforce is dominated by men, many of whom have been in the industry for decades. Willingness to change was never a priority, so asking someone to do things differently can be incredibly challenging.
Unfortunately, the old ways weren’t cutting it anymore.
I noticed a few worrying trends that made me realize our problem. There was a complete lack of trust and very little communication among the different business entities. Without synergy or a shared vision, there was tension between teams.
We hosted a general management meeting a few years ago that was the perfect example of the problem. During the meeting, every team was responsible for sharing a presentation. One group rolled in wearing formal attire to make a good impression. Another group wore their usual polo shirts. Neither group had negative intentions, they were simply proud of what they were presenting, but the disconnect was there nonetheless.
What does change really look like?
It was clear that Kloeckner Metals desperately needed a dramatic cultural reset. Initially, we tried an organizational approach, and while we saw some results, it wasn’t enough. We realized a new strategy was required, and it had to start from the top.
A group of executive leaders went to West Point for the Thayer Leadership Development Program, and our biggest takeaway was how critical culture was. The entire team left that program knowing what needed to be done; we had to clearly define and establish our company’s core values. We agreed on a set of shared beliefs that we simply would not deviate from. Those values laid the foundation for who we were as an organization and the cultural challenges we wanted to implement.
We didn’t stop with executive leadership. We had to get everyone on board, at every level, if we were going to implement real change. Our senior and general management teams also retreated to West Point to learn those same core values and explore ideas for communicating our new message.
The immediate and long-term impact of true cultural change
Reinventing the culture at Kloeckner Metals led to countless benefits. We managed to break down all the silos keeping different departments from communicating with each other. This newfound synergy radiating throughout the company wouldn’t have been possible without diving in and re-inventing our company culture. The team’s collaborative spirit is driving the company forward, and we’re attracting new business because of it.
We’ve also made some structural changes to support our new cultural vision. Our incentive structure has been modified to encourage leaders to make decisions with the company’s best interests in mind rather than the individual’s. When everyone is working together toward a shared vision, you can achieve great financial results. The benefits of these changes will be felt far into the future.
For many companies in a legacy industry, the single biggest risk is your ability to attract and retain younger talent. If the culture is hard to understand, not accepting, or simply doesn’t exist, people probably won’t stay with the company. When you create a culture built on respect, trust, clear communication, and team support, people will want to stay and build a career. In turn, the brand grows.
Of course, this starts with the hiring process itself. We interview specifically to screen for our values, such as trustworthiness, commitment to safety, openness to change, and willingness to be a team player. These values are non-negotiable for us, so we prioritize candidates who embody them. If someone has the exact technical experience we’re looking for, but they don’t demonstrate any commitment to these core tenets, we won’t hire them. We’re still refining our interview processes, but we’ve already begun reaping the benefits of hiring the right people from the get-go.
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Company culture has no finish line
Make no mistake: We’re not finished. Culture is a living thing. You can’t just talk about it once and never question it again. It has to be a constant drumbeat of communication, something you consistently evaluate and assess to ensure it’s protected every step of the way.
There will likely be times when this is tough. One of the former colonels we worked with at West Point said something that really stuck with me: “Your culture is ultimately the behavior you are willing to accept.” If you see that someone isn’t living by the culture or abiding by your core values, you have to take action — even if they’re a higher performer. If you just sit back and make an exception, it undermines everything you do.
Thankfully, if you feel that your culture is slipping, you can do something about it. At Kloeckner, our operational managers are the ones who talk to the majority of our employee base every day. We go straight to them if something feels a little off, and they talk to the people on the floor. They can confirm, straight from the source, that the company culture is alive and well in every corner of the business. This also sends a message to your employees: When you’re checking in, you’re putting those values—trust, communication, collaboration—into practice. Live the culture yourself, and your employees will follow suit.
When leadership is willing to be sincere and show a little humility, you can create an environment where employees are eager to engage and be part of the process. With everyone on board, culture can drive forward momentum in every part of your business.