Card shark Featured

8:00pm EDT July 28, 2006

Jeffrey Weiss stands in a darkened room looking up at a picture of a cartoon character on a screen. A group of 20 or so designers sits in a semi-circle around a table where the cartoon’s creator slowly reads the back story of his creation to his peers.

Weiss, president and COO of American Greetings, a $1.9 billion company best known for its greeting cards, listens for a few minutes, then heads back out into the hallway at the company’s sprawling headquarters building near the intersection of Tiedeman and Memphis roads in Cleveland. Outside the room are displays of more familiar characters: Holly Hobbie, Strawberry Shortcake and Care Bears.

Maybe the character he saw on the screen will go on to rival the success of those classics, or maybe it will die on the drawing board. Either way, Weiss is happy. His employees are exhibiting the types of behaviors he needs to make the cultural transformation at American Greetings a success, which, in turn, will help the company reach its strategic goals.

While the company has always been focused on creativity, about five years ago, the management team knew the company needed to change to reflect new realities in the marketplace, and the culture needed to change with it.

“For better or worse, the company five years ago was heavily a sales and distribution company,” says Weiss. “The strategy we had developed in the ’70s worked very well through the mid ’90s.”

But then the market started to change. Retail was growing rapidly, but it was at the expense of small, independent stores. In their place were the large mass market retailers who could dominate a category and did so much volume they could dictate prices and terms.

Consumers were changing, too. No longer was the interest of American Greetings’ primarily female customer base limited to just a few styles promoted by network television. Instead of one mass culture, there were now many niche cultures with different demands for styles of everything from clothing to greeting cards. And if American Greetings couldn’t change to meet the demands of those niche styles, it would risk losing its appeal to its customer.

“In the ’70s, we all watched the same three channels of television,” says Weiss. “In American culture, we all related to and had an affinity for a large mass culture that was influenced by large mass media. Today, the number of television channels is up to a few hundred. I’m still watching predominantly three to five channels, and you’re still watching three to five channels, but the three to five I’m watching are probably different than the three to five you’re watching and the three to five someone else is watching.

“The influences for creative development were starting to fragment. As an industry, we were focused on creative and development models that were aligned to large mass markets or large media markets. The consumer wasn’t there anymore.”

American Greetings had to change its strategy, and the culture needed to change to support it. The company was going to shift toward being focused on content creation centered on social expression products that help people express themselves. And regardless of whether it was in the form of a greeting card, gift wrap or a new cartoon character to be licensed to someone else, it was going to take the whole company to make the strategy work.

“The culture we had was representative of that model from the ’70s ,’80s and ’90s, so we started on a path of cultural change,” says Weiss.

By clearly articulating what the goals of the company are, creating behaviors to drive the results and holding people accountable to them, American Greetings has transformed its culture to better match the company’s strategy and a rapidly changing marketplace.

Clear communications

Before you can change a company culture, you have to have clarity around your vision, mission and values. You start there, then everything else will fall into place.

“You can’t get your strategy if you don’t know your vision, mission and values,” says Weiss. “The vision, mission and values will clarify what the business is about.”

For American Greetings, the new vision, mission and values focused on driving creative value rather than being an organization focused on manufacturing and sales.

“We are going to be good at a lot of things, but we have to be great on the creative side because that is what is really going to create our shareholder value,” says Weiss.

Once clear goals are established, they have to be communicated throughout the organization. Communication is perhaps most important at the top. All the managers have to be on the same page, because ultimately, they will be developing for their departments individual plans that are supposed to be in alignment with the overall corporate goals.

Once a year, American Greetings assembles its 100 top managers for a two-day meeting.

“It’s not that we create a strategy or a brilliance of ideas come out of the two days,” says Weiss. “The two days are principally about aligning communication so that as different groups are out implementing strategies, the whole organization is in-step and aligned with where we are going and why.

“Each person is involved in the pieces parts, but they don’t know how their parts fit together. This is a way for them to get the holistic view of where we are going and what we are doing and get that alignment. The alignment is very important, because they use that to start their planning process for their operating plan for this year and the year after.”

Everyone understands their overall role and makes individual plans off of the same master blueprint.

“It eliminates surprises,” says Weiss.

Once the management team had clarity around what direction the company was going to go, the changes had to be communicated to the employees.

“Getting the alignment through the organization, so that everyone is able to say the same things, move in the same direction and have that consistency and clarity of what we are doing and why we are doing this takes iterations and responding to things and staying very focused against it,” says Weiss.

Quarterly all-employee meetings were instituted to go over the changes and explain the reasons behind them. There were brown-bag lunches, where small groups of employees could sign up to have lunch with a senior executive to learn more. The changes were emphasized in newsletters, e-mails, drop-down meetings and other company communications.

“It was both a demonstrable element of signaling change, which is important to transition a culture, as well as helping the organization hear consistent messages and help the senior team hear a clear understanding of the issues from the associates,” he says.

Weiss says the ideas you are trying to drive through the organization are more easily communicated if there is jargon involved.

“Jargon becomes very important, because it becomes the shorthand to communicate the strategies, vision and behaviors,” he says. “The ability to keep referencing in a consistent way the shorthand and understand the depth behind it helps keep everyone stay focused and aligned.”

For example, the strategy, goals and behaviors associated with American Greetings greeting card business is called “Win at Cards.” It’s a simple way to reference all the elements of the strategy with one short phrase that everyone understands and makes further communication about the strategy easier.

And while jargon may make communicating some concepts easier, it doesn’t eliminate the need for constant reinforcement of the message.

“You can’t scale back your communication, but it does get easier,” says Weiss. “When you start, you have a very rough stone and you are not even sure what your message needs to be. You start to wrap some things around key messages and initiatives, then it starts to come into clearer focus.

“Once you get the mission, vision and values, which takes some time to gel, you get to the strategy.”

Behavior matters

One of the key points communicated to employees was not only the vision, mission and values of the new American Greetings, but also the types of behaviors that needed to be used to achieve results.

“Over the last five years, we put in place performance management that is far more robust than anything we had prior,” says Weiss. “Success really starts with good communication around your goals, clarity of where the organization is going, what are the behaviors you want me to have and what are the goals of contribution you want me to deliver on. When you lay that out up front and link it back to the performance appraisal, you start to sort out individuals and how they’re contributing. You are able to recognize high performers, draft those individuals and move them along appropriately and compensate them appropriately.

“It is an important part of reinforcing the culture we want to instill and, on the flip side, giving people messages on where they are falling short, either on behavior or contributions. This is important so that people know that we expect them to deliver on their goals and make them a part of that process. It’s not just delivering the results but how did you deliver the results.”

Employees are evaluated twice a year, not just on their results but also on the behaviors they used to get them. People who score high in both categories are the top performers. They are getting results using the methods the company wants people using.

“You want to know who they are and keep broadening them throughout the organization and moving them up,” says Weiss.

Employees who score high in one category but not the other require some development. People strong on behavior but not on results may just need more time or a slightly different role.

“They are still learning how to be good at delivering results and being dependable at it,” says Weiss. “I think they are people worth investing in.”

While some organizations may turn a blind eye to those individuals who are able to get results but do it their way rather than the company way, that isn’t true at American Greetings.

“There is a short-term horizon for them [to improve their behaviors] because in some ways, they are a poison to what the culture needs to be and they send the wrong signals through the organization,” says Weiss. “It’s really damaging to nurture someone who delivers results and recognize them, yet the behaviors aren’t right. That sends messages throughout the entire organization that how you do it and how you work together aren’t important.

“They might be hitting results, but they are not optimal. If you can take that individual and get the behaviors and the collaboration and the other things right, that individual can be a superstar. Otherwise, they won’t hit their potential and they’ll hold back the organization’s potential.”

People who struggle with both behaviors and results are detrimental to the organization.

“Those are the easy ones,” says Weiss. “You have to react.”

Early on in the process, management focused a significant amount of time on how people were adapting to the goals and behaviors of the new cultural plan, and managers had to be willing to make changes when necessary.

“If someone was in the wrong place and didn’t have the tools they need, then we had an obligation to help that,” says Weiss. “We would help by moving them to the right roles or getting them the training they need, the coaching they need or the mentoring they need. We were giving them the feedback they need. It’s a partnership. In the end, if we couldn’t get it to work, we would separate.

“Loyalty alone isn’t going to be enough anymore. Loyalty is important, but performance is important. Delivering results is important, and equally important is behavior. How did you deliver the results, not just did you deliver the results.”

Weiss says to jumpstart a cultural shift and get the behaviors you want to see, you have to bring in new people who will challenge the status quo.

“It’s not that inside people are bad or wrong, but you need to create more tension,” says Weiss. “If you think of a mechanical process that creates motion, there are a set of belts that are tension points. When the tension is applied right, the machine does wonderful things. If the tension is not right and it’s not touching, the machine does nothing. If the tension is too tight, it destroys the machine.

“Tension and friction in the right balance is very critical. Bringing in different points of view, outside perspectives and opening dialogue is all part of creating that tension. Otherwise, people get very comfortable and start living in silos and start doing things they’ve been asked to do without communicating, connecting or challenging across the organization.”

American Greetings used a combination of consultants, shifting people to new positions and bringing in new executives to generate the new ideas and tension points needed for change.

The role of the human resources department is also important to get the results you want.

“HR needs to be at the side of the CEO, COO and the president during the whole transition,” says Weiss. “They really have to push for the clarity in communication, manage the temperature of the organization and know exactly the kind of culture we are aspiring for to help provide for the right kind of lenses to sort out the inside skill sets and behaviors — and be clear about the behaviors we want.”

What American Greetings’ management team wanted were employees who could handle making decisions, regardless of whether they were new to the organization or had been with the company for 10 years.

“One of the things we wanted to do was push decision-making down the organization,” says Weiss. “You want to empower people, but if you don’t give them clarity on how to sort out the decisions and have a framework for aligning decisions, you will have a lot of tugging, pulling and tension.

“You can’t move fast if you are trying to make decisions on everything [at the senior level] that is coming up and people throughout the organization don’t have clarity of where you are going and why. I think the most important thing if you want to push decision-making down is to have clarity. Without that, there is no way it can be done.”

Tolerance of mistakes is also important when pushing decision-making down.

“You can’t take someone and publicly hang them,” says Weiss. “They’re following the right behaviors. It’s really about the behavior. There will be times where someone is following the behaviors and objectives, and the outcome isn’t right. What’s really important is providing an environment that helps them feel safe and comfortable solving problems moving forward.”

By not punishing people for making mistakes, you create an environment that encourages risk-taking, and when things aren’t going right, one in which someone will bring a problem to the table before it becomes too large.

“They’ll be open as to what is working, what isn’t working and sort out why,” says Weiss. “Over time, if you have an individual that makes decisions and can’t deliver results, it goes back to either the behaviors aren’t right or they don’t have the ability to do it.”

And that’s where the performance appraisals at both mid-year and year-end help identify those people. The person will be given help, and if that doesn’t work, he or she will be replaced so the organization as a whole doesn’t derail because of a few non-performers.

While there are some financial incentives tied to demonstrating the right behaviors, Weiss says money isn’t the only motivator.

“I don’t think money is the only thing that motivates people,” he says. “I think people are highly motivated around succeeding and winning. I think personally having some skin in the game is important, but having systems that differentiate people based on behaviors, performance and results is important. It’s not just about the cost component of it.”

Cultural change is a slow and constant process, and Weiss will be the first to tell you the transformation at American Greetings is not complete. The results of changing a culture are often hard to measure, but the company has gone from a net loss of $113 million in fiscal 2001 to net income of $84 million in fiscal 2006.

“It’s a journey,” says Weiss. “It would be great if it was as easy as waking up one morning, say this is our vision, our mission and our values, this is who we want to be and how we’re going to get there, take the flag, wave it once, then start running. But it’s not that easy.”

Shifting a culture may be a journey, but it’s one that needs to be undertaken with the right companions.

“Focus on the right people, that’s the first step,” says Weiss. “Even if you are not sure what your vision and mission is about, getting the right people will help make that process work.

“If you don’t have the right people, you won’t have fun and you’re not going to enjoy it. You have to feel you have the right partners around you to help do the hard work. You need people that can create these tensions, challenge each other, raise each other and bond together. The whole is better than the pieces parts. If you have a mix of the right people and the wrong people, they will be consumed with each other.”

HOW TO REACH: American Greetings, www.americangreetings.com