Climbing the mountain Featured

7:00pm EDT November 27, 2007
As his company’s annual revenue increased from $375 million in 2003 to nearly $700 million last year, Gary Rappeport, CEO of Donlen Corp., has made a determined effort to ensure the corporate culture of Donlen keeps pace with its outstanding financial performance.

“For the last three years, we’ve put a tremendous amount of effort and energy and resources into trying to change the culture here to be more akin to having the values that we thought would be important for our employees, the company owners and our customers,” Rappeport says. “We made a determination specifically to try to address employee satisfaction and try to have a variety of initiatives here that would create an improved work environment and work experience.”

Rappeport is a firm believer that in service companies such as Donlen, the fastest-growing fleet management company on the continent, there is a direct correlation between employee retention and customer retention. As the company began to grow, Rappeport says concerns arose that employee turnover would negatively affect customer satisfaction and, in turn, Donlen’s overall success. As such, Rappeport set out to make Donlen as attractive as possible to both current and potential employees.

While the costs of overhauling an organization’s culture, both monetary and otherwise, are great and the results are not always evident, Rappeport says the alternative can be even more costly.

“Employee satisfaction is, at times, a bit of an intangible,” Rappeport says. “I don’t know if there’s a science to looking at whether there is return on investment, but one of the ways we’ve justified that investment is that we look at employee turnover as being very costly.”

Creating and sustaining a positive workplace atmosphere is a task often overlooked, but Rappeport says it would be a mistake to make it anything less than a top priority.

“Some people think of it in a negative way, like a distraction,” Rappeport says. “We don’t think of it as a distraction. We think of it as one of the essential elements of having a successful and healthy organizational development initiative.”

Building a foundation

Despite your best intentions, employees won’t necessarily react as favorably to new culture-building efforts as you might hope. In Donlen’s case, Rappeport says because the company had made prior attempts to improve the work environment that were perhaps halfhearted, the staff wasn’t quick to jump on board with the initiative he introduced three years ago.

“To be honest with you, there was a lot of skepticism at first,” Rappeport says. “There was a bit of a credibility gap because we had pursued other initiatives in the past and didn’t always stay with those and the employees, to an extent, were justified in being a little skeptical and maybe even cynical.”

Evidenced by a failure to properly resource the initiatives, Rappeport says Donlen’s previous attempts to change the culture fell flat, due, at least partly, to a lack of commitment on the part of the company.

“Sometimes organizations get distracted with business requirements and these initiatives can end up sometimes getting reprioritized,” Rappeport says. “To be honest, we were a bit guilty of that.”

When Donlen embarked on its renewed mission to improve the work environment, the first step was finding out just how much work needed to be done. Adopting an analogy from Marcus Buckingham’s and Curt Coffman’s 1999 book, “First, Break All the Rules,” Rappeport compares the journey of developing a positive corporate culture to climbing a mountain. To ascertain where on the proverbial mountain Donlen stood, a confidential, company-wide survey was executed to gauge the current level of employee satisfaction. Rappeport says though he held certain expectations of what the assessment would tell him, he was surprised and disappointed to learn just how little effect the company’s prior efforts had — Donlen was at base camp.

“Having a very safe, secure, confidential survey performed by a third party on a regular basis is a very, very important start,” Rappeport says. “It was a benchmarking opportunity for us, but it was also an opportunity to send a message that getting employee input in a more formal way was something we were not only committed to going forward but was also something that was important for us to better understand how to improve the work environment.”

To reinforce management’s commitment to improving the work experience for employees, Rappeport says it is important that a company be forthcoming by sharing the feedback it received. Though they were certainly disappointing, by posting the survey results on the wall of the cafeteria, Rappeport says a message was sent to employees that the company had acknowledged any shortcomings and was dedicated to correcting them. Furthermore, by showing its commitment to the initiative, Donlen helped restore its credibility in the eyes of its employees.

Without first creating a solid base of trust and credibility with employees, any culture-building strategy is doomed. Therefore, though the results of the initial survey were a letdown, Rappeport says the knowledge gained through the process was invaluable.

“If we had started on this initiative without knowing [where we stood], we would have skipped over a lot of the very, very important foundations,” Rappeport says. “If you start to move up a mountain and you don’t have strong footing and you haven’t done the things early on, it’s going to be pretty hard for you to really get near the top.”

Developing relationships

When deciding how to best tackle the task of improving employee satisfaction levels, Rappeport says Donlen created two pillars on which to base its initiative. The first is what Rappeport refers to as being physical-workplace- or benefits-related. For example, the company constructed a new on-site exercise center, created companywide fitness programs, brought on a part-time masseuse and built an outdoor dining area. And while those things are helpful in creating an enjoyable workplace atmosphere, he says that as a company works to improve its culture, they are not the most critical element you must consider.

“In some ways, that’s the easy stuff because you throw money at it, and [it] just sort of happens to work, and people appreciate it, and it’s very visible in the work environment,” Rappeport says. “The second pillar, which is much more complex and much more difficult, is creating an improved experience for the employee.”

Keeping in mind Donlen’s mission of reducing employee turnover as a means of reducing customer turnover, Rappeport applied another major theme of “First, Break All the Rules”: Employees don’t leave companies, they leave managers.

“In buying off on that concept, what we needed to do was to find a way to improve the managers’ ability to provide guidance, direction and support for their employees,” Rappeport says.

In an effort to do just that, Donlen began a management development program whereby a random sampling of company managers are selected on a quarterly basis to participate in a 360-degree review process during which their strengths and weaknesses are evaluated by their employees, peers and other managers. With the resulting data, a targeted training program is then created for each manager focusing on areas that had been identified as those with room for improvement.

Rappeport says addressing the specific needs of each manager has been far more successful in improving the overall employee-manager relationship than Donlen’s previous attempts at manager development.

“We had tried some manager shotgun training over the years, and two years ago, we put all of our managers through a certification program for what we thought were certain things that everybody should need to know,” Rappeport says. “Although clearly it was helpful, we were finding it wasn’t addressing some of the weaknesses or growth areas that some of the managers had that had been identified through other processes.”

By treating each manager as an individual rather than a head in the crowd, Rappeport says a customized training program results in both employees and managers who appreciate the investment their company is making in their well-being. As importantly, at Donlen, it has helped reinforce the company’s dedication to its overall mission.

“It sends a very, very strong message to the employee about the commitment level that both we and the manager have to create a better experience for them as the staff,” Rappeport says. “No matter what we did on the physical work environment, if people didn’t like their bosses or felt like their bosses weren’t fair or the company wasn’t fair, we were going to continue to experience turnover that we thought, for us, would be unacceptable.”

Reassessing progress

As Rappeport has learned, the challenge of creating or improving a culture is not one that can be overcome quickly. Regardless, he says it is critical that you not be discouraged.

“When you embark on some things and they apparently aren’t working, you can’t throw the towel in,” Rappeport says. “While it’s very easy to say, ‘Oh my goodness, I just spent X million dollars and my employees are ingrates and nobody appreciates anything we’re doing,’ you can’t fall into that trap because many of these things do take awhile.”

In fact, Rappeport says it was two years before Donlen’s work environment initiative produced any meaningful improvement in its employees’ satisfaction level — and he has the data to prove it. Buying in to the process that Donlen used three years ago to determine where on the metaphorical corporate culture mountain the company was, Rappeport has monitored the ascent with annual and mid-year surveys. By doing so, and by sharing the results with the organization, Rappeport is able to illustrate for his employees the improvements that have been made — and areas where opportunity for development remain — on an ongoing basis.

“The great thing is you sort of get to look at movement,” Rappeport says. “‘Look how well your satisfaction and these things that are important to you have progressed. And, by the way, these are the things that haven’t progressed, and here are the things that we’re going to focus on.’ That benchmarking process is important to be able to compare year to year.”

Though the core principles and goals of Donlen’s initiative have not changed, Rappeport says the methods by which they are achieved necessarily must change. By gathering detailed information through a well-supported, periodic survey, management has the ability to monitor the effectiveness of certain programs or strategies.

“Clearly, we have a number of organizational development goals as a company,” Rappeport says. “So if those are our goals or where we’re trying to get to, we’re measuring those things along the way, and we’re continuing to modify and tweak the formulas.”

Rappeport says the company’s shift away from a one-size-fits-all management training program is just one example of the evolving nature of Donlen’s organizational development initiative.

“There have been a lot of other elements that have been similar, even on the benefits side, where we thought there were some things employees would value and they didn’t necessarily value those things,” Rappeport says. “Clearly when you try something, you implement, you learn and you adapt. Subject to what the feedback you get is, you say, ‘That worked really well, let’s do more of that,’ or you say, ‘That really didn’t work very well, let’s try something different.’”

In a company such as Donlen that lacks a large human resources department, Rappeport says the entire organization, including the CEO, must take an active role in addressing and supporting a healthy workplace environment, a fact that can be both a curse and a blessing.

“It’s a good thing because it allows us all to have a role in something as important as this,” Rappeport says. “The bad thing is it’s a time commitment, and it’s a big commitment from all the managers, but it’s one we think is ultimately worth it.”

HOW TO REACH: Donlen Corp., (847) 714-1400 or www.donlen.com