In 2006, everything should have fallen apart at the engineering and construction firm that provides services in transportation, environmental and civil engineering, and construction management. Three of the firm’s financial officers, including the chief financial officer, pleaded guilty to an elaborate embezzlement scheme of more than $35 million, rocking the firm’s core.
“It challenged every aspect of the firm, our culture, our character and our reputation in the marketplace,” Kenner, the company’s president and chief operating officer, says of the scandal.
Though it very well could have meant the end of any relationship between executives and employees, PBS&J had taken a preemptive strike in that matter, having switched over to a culture focused on employee happiness several years earlier. From that momentum change, there were avenues for segments of PBS&J’s nearly 11,000 employees to sit in on board meetings and have regular sessions with other senior leaders. That policy wasn’t enough to stop the embezzlement, but it certainly stopped the bleeding thereafter.
“I will tell you that if we didn’t have that cultural connection, we would have never survived,” Kenner says. “If we didn’t have those relationships, even though we challenged each other over the last two years, I don’t think we would have ever gotten through it. The adversity we faced as a result of that was the most difficult thing I’ve ever had to go through.”
But the benefit of the culture was that Kenner and the employees at the $573 million firm didn’t have to go it alone. With the avenues created by the company culture, employees were able to sit in front of senior leaders and see the steps being taken to fix the damage.
“If that wasn’t already present, it would have had a dramatically different impact,” Kenner says. “It’s easier to get together and deal with problems when there is a relationship connection. When there isn’t, the end result is, ‘Hey, I don’t want to deal with this, I feel somewhat alone, and I’m out of here.’”
The process behind that cultural change dated back nearly a decade. It started with convincing senior leaders to believe in the fact that a better culture would equal a better company and followed with figuring out ways to meet employee expectations of personal growth. From there, it was a matter of continuing to make culture a priority on a daily basis.
Change your cultural focus
If you tell someone a new product can make you more money, you can show them data projections. If you tell them that spending more time and energy on culture will create a better company, you better have a heck of a sales pitch. Kenner says that in the late ’90s the first conversations about culture at PBS&J were as much about faith as business.
“It took a leap of faith,” he says. “It’s difficult to draw some direct correlation between investing in people and bottom-line performance. You just have to believe that if you create an environment where people are inspired, and they feel recognized and like the company is investing in them to not only improve themselves but their work in the firm, that the end result will be the firm will do better. And for some of us, it’s not a major leap but for others it is.”
So in 1997, when PBS&J’s chairman decided to collapse the firm’s nine operating companies into one corporation, there was a focus on pushing a better culture for the first time. The firm was realizing more and more that there was a bigger fight for talent brewing the number of science and engineering positions has risen at four times the national rate since 1980 according to the National Science Foundation and they needed to make a push for retention in other areas beyond compensation. The main thing that helped leaders in the company make that leap of faith was to emphasize the forthcoming business imperative of the change.
“In our business, we’ve clearly recognized that people are our greatest asset,” Kenner says. “Our people provide our services and without them we have nothing to offer our clients. In our industry, there is a virtual talent war. So as the opportunities have increased, it’s simple supply and demand.”
Another of the strongest selling points in those top-end conversations about a culture focused on your people is to talk about how building relationships with employees will help build bridges in the company that will send messages both ways.
“It’s continuity and sustainability,” Kenner says. “Whenever you can build long-lasting relationships, and that builds trust and confidence, obviously that leads to greater performance, and we have seen a dramatic decrease in our turnover throughout this period.”
Though the initial sell was a little tough, soon enough there was even some of that hard data that board members like so much: PBS&J, which has had turnover numbers as high as 18 percent, has seen those figures drop to near 10 percent during its focus on culture.
Involve your employees
By 2002, the movement to change the culture at PBS&J was no longer just a small push, it was one of the company’s three strategic plans. As senior leaders realized they had to help make the strategy a success, they worked to increase communications from the top level to the rest of the employees to figure out what employees wanted in a new culture. One of the simple ways that Kenner has built on the process is by simply making meeting employees a must on his travel schedule.
“When I’m in one of our offices and traveling, I have a period of time with no agenda,” Kenner says. “I’m just walking around and saying hello to folks and talking and conveying to them what they mean to us. No matter what reason there is in my travel, I spend quality time with my employees.”
In conversations that Kenner and other senior leaders had, they realized that employees had expectations that the firm would provide them with growth opportunities
“There’s an expectation that our professionals have: They expect the firm to invest in them professionally and help develop their careers,” he says. “Not just provide them great projects and opportunities, but elevate their skills so they can take on more responsibilities as they grow and develop.”
In response to that, PBS&J worked to create avenues that allowed employees to take ownership of new projects and build up their skills. PBS&J University was created for employees who wanted more training and employees were given the opportunity to volunteer to head up initiative committees on the biggest issues and they could air those issues in front of the board.
“They report directly to the board, so they have a direct conduit and a voice with our board of directors,” Kenner says. “And they really kind of set out a work plan on an annual basis and focus on specific areas where they are going to review and make recommendations for and set forth actions that the board can implement to have a firmwide impact.”
For each major area of interest for employees areas like recruitment, retention, compensation, diversity and so on those who felt most passionate about the issue formed an employee committee. In turn, each of those committees is teamed up with one board member and has its chance to appear before the board with studies and recommendations on what can be done to improve the company. The benefit to the board is a wealth of inside knowledge.
“They do a lot better job than the board could ever do,” Kenner says of the committees. “They are closer to the issues, they understand the issues, and they live them every day, where the board has awareness but not that direct involvement.”
Moreover, the bridge from employee to top decision-makers fulfills the growth opportunities employees crave. They can see how company decisions are made and feel like a part of the process.
“We can talk all we want about opportunities,” Kenner says. “But when they see a real example, they see someone they can aspire to and know it’s possible, it’s going to be real.”
Make a daily commitment
Even when you start to see the positive change that an employee-friendly culture can bring, Kenner says you have to keep rein-vesting in it. Today, after pushing through the embezzlement fiasco, PBS&J still has company culture as one of its key strategic initiatives and focuses on updating its internal training programs and employee committees. The main thing is not to just call it a strategic focus but to give it the same attention you would your other key business plans.
“It’s just something you live with every day,” Kenner says. “Again, it comes back to understanding that without great people all the rest will never take place.”
That commitment can’t just be all about today, either. To keep PBS&J ready for the evolution of the business, Kenner makes sure that different ages are represented on the board and that new talent is given the opportunity to form culture committees that can bring forth new issues. The goal is to keep from letting one generation control the company’s way of thinking.
“It’s all about creating a sustainable future and a sustainable organization,” Kenner says. “And if we don’t feed in that young talent, you’re obviously not going to have much of a future. Furthermore, with our focus on our culture and that cultural connectivity, the only way that can live on is if we develop that and build an awareness and strength to that with young folks that eventually are going to lead the organization. You have to feed it and mature it and develop it and continually cycle it through.”
Another piece to keeping that daily commitment is an emphasis on the little things that drive communication at PBS&J. It’s very easy to make senior leaders seem as if they are some farand-away power that just sends e-mails and memos, so Kenner wants to put the face and personality of the leadership team in front of employees as much as possible. That means practices like no e-mail Friday, where instead of sending people in your same office an e-mail, you have to physically go talk to them or pick up the phone and have a conversation.
“Our conversations take on a whole different tone in e-mail than if we were face to face,” Kenner says. “I don’t think it’s doing any major thing, it’s doing a lot of small, simple things every day. All too often, we just don’t pick up the phone anymore. One of our greatest challenges with the cultural connectivity is our technology. E-mail and Blackberry have almost been contrary or worked against the relationship building. It’s a lot easier to just e-mail somebody than to walk down the hall, so it’s really not allowing technology to work against building relationships, and it takes a lot of focus.”
Of course, the other piece to that is a lot of energy spent on these daily communication tasks. Nonetheless, Kenner says that commitment will make or break your attempt to build a better culture.
“For some of us, it takes a lot of travel,” he says. “No matter how large we get, we do not want to lose that connection we have with our folks. We want to make sure they know we’re just human beings like they are, committed to building the organization, and we’re all working together. The only way you can do that is through face-to-face communication and working together on strategic issues.” <<
HOW TO REACH: PBS&J Corp., (813) 282-7275 or www.pbsj.com