Man on a mission Featured

4:34am EDT March 1, 2006
In 2002, Alderwoods Group Inc. opened its doors and began operating on a single theory: Financial success is not only achievable, it is also sustainable, as long as there is a cohesive, ethical corporate culture in place.

This theory was based largely on the experiences of CEO and President Paul Houston, who helped create the funeral services company from the bankrupt remnants of Loewen Group International.

A self-professed student of the School of Hard Knocks, Houston says: “I’ve had the chance to work in Canada and the United States, England and Japan. Having looked at different organizations and companies, and knowing that every company has financial objectives and business objectives that have to get done to keep shareholders happy, I realized really early in the process that unless we create an environment where there’s a real team spirit and people are working professionally and acting ethically, whatever we get in results for our shareholders wouldn’t be sustained.”

And without sustained shareholder results, the company couldn’t survive in the long term — the fate of Loewen Group International proved that. But there were other considerations, as well. Houston wanted an environment that would foster employee growth and development, remain competitive in the marketplace and offer employees clear-cut criteria for evaluating the performance of both company executives and themselves.

Most important, Houston implemented a set of company values to ensure that Alderwoods’ customers received the empathy and respect that they needed and deserved.

“We want to make sure that when we’re dealing with a family that they’re treated with the same kind of compassion they would expect — we’re dealing with them at one of the worst times in their life,” says Houston. “We want our employees to act in a very ethical, professional way, with a lot of compassion. We don’t want (customers) to think for one second that Alderwoods cares more about the business plan or more about the financial objectives than serving that one family properly and showing them the compassion they deserve based on what’s going on in their lives.”

Houston’s challenge was to create an environment to support each of these goals. He found the answer by placing a defined mission statement, vision statement and set of core values — developed in partnership with employees — at the heart of company operations.

Vision and values
Early on, Houston and his management team traveled to some of Alderwoods’ 613 funeral homes, 72 cemeteries and 60 combination funeral home and cemetery locations across North America., holding meetings with employees to help define the company’s direction. During those meetings, company executives presented their ideas for the vision statement, mission statement and values, and asked for employee input.

“We told them that we really care about what they say, what they feel, and we’ve also got to understand the history of where they’ve been in order to set the set of values and go forward,” says Houston. “We asked them specific questions — ‘When you think about integrity, what specific things jump into your mind? What are the things that would make you feel comfortable about measuring (it)? What does it mean to you? What does it mean to the company?’”

While it was not easy to include employees — the company held about 50 meetings over nine months with more than 400 employees — Houston felt doing so was vital to the company’s success.

“(The values, vision and mission) are just as important as the financial measures of the company,” Houston says. “We had no choice but to say we’ve got to put the time and effort into making sure that all of our team members and all of our associates at Alderwoods know what we represent, what we stand for and where we want to be five, 10 years from now. And that was why we spent as much time and money as we did developing ... the values.”

After nearly a year of meetings, Houston and Alderwoods’ management team met to begin to define what would become the compass for conduct at Alderwoods. They poured over hundreds of pages of notes and boiled them down to five defined values (integrity, teamwork, communication, compassion and creativity), a vision statement (“Using imagination and leadership to exceed customer expectations”) and a mission statement (“We will create value for families, employees and shareholders by being the superior provider of seamless funeral service. We will attract outstanding people and nurture their development. We will be the leader in the communities where we operate.”) that would direct the company from that day forward.

Creating the culture
The next step was to position the vision, mission and values at the center of the company’s culture. Houston did that by inundating Alderwoods’ offices and employees with visual reminders of them.

First came the plaques — Houston commissioned plaques with the vision, mission and values engraved on them, to be hung in each of Alderwoods’ funeral homes. Then the company produced handbooks highlighting company policies and the vision, mission and values. When employees received their business cards, the three guiding principles were printed on the back.

And last but not least, Alderwoods’ management team embarked on another tour of meetings.

“We had a full push on trying to get (the values, vision and mission) integrated into the organization,” Houston says. “We had meetings where we rolled out and explained the values to employees, explained to them all of the meanings and explained to them, how did we take those pages of notes that they gave us and translated them down to that value.”

Being surrounded by the guiding principles didn’t guarantee that employees would accept them and live them. But Houston addressed this, as well.

“I like to live the values so that (employees) can measure myself and the management team on the way we act in the organization, to see whether we believe in them and if we’re practicing the values,” says Houston. “Those are times when the values will get credibility by osmosis. (It’s a matter of) practicing what you preach.”

Above and beyond management practicing the vision, mission and values, the guiding principles were also incorporated into human resources. Prospective employees are evaluated against the vision, mission and values — will these job candidates help reinforce this core part of Alderwoods culture?

And once employees are hired, living the values and mission is a requirement for staying with the company.

Houston says: “If you look at our employee valuation, it actually talks about, how well do you communicate? Are you a good team player? Do you act with compassion? We actually measure performance against these same values so there’s not a double standard and there isn’t confusion within the organization.

“We’ve found that it’s now easier to find someone who’s not following the values — they stand out pretty quickly. Now that we’ve defined the environment that we want, when we get somebody who doesn’t decide that they’re going to communicate, doesn’t decide that they’re going to be a team player, and starts to act with no integrity, they jump out at you.”

The company also implemented award programs that recognize employee contributions and highlight employees who exemplify Alderwoods’ guiding principles.

Value added
Establishing the company’s vision, mission and values has had enduring benefits within Alderwoods. After four years in operation, the company posted revenue exceeding $700 million in 2004, compared to a net loss of more than $217 million from continuing operations at the end of 2002.

By the end of 2003, it posted net income from continuing operations of more than $10 million, and through the first three fiscal quarters of 2005, that number was $33.8 million.

“If you can create an environment for continuous improvement and an environment where people think they’ve been respected, results will be sustainable because everybody’s looking to do better and better,” says Houston. “And I think that’s what’s helped sustain Alderwoods’ program over the last three or four years in terms of the actual progress we’ve made as a company, financially and operationally.”

In addition to the financial results, the guiding principles have helped the company establish and maintain the same level of care and service across each of its funeral homes and cemeteries.

“Because we’re really a geographically diverse business, it’s very important for us to say that we can have the same professional impact at that one location down in Florida or that new location in Vancouver, Canada,” says Houston. “Each believes in what we’re trying to accomplish as an organization and understands that even though they’re by themselves, there is a guiding light that helps them make the right decisions.”

“And I’ve always told (employees) in all my town-hall meetings, if you get lost on the path and you don’t know where you’re going, if you look to the values and make the decisions based on those, you will not make a mistake.”