Over the past decade, Reed Smith LLP has grown by mergers and acquisitions. Sure, that growth is great, but it can be a problem if the merging companies aren’t compatible culturally.
“We thought we did our homework in each transaction,” says Greg Jordan, global managing partner of the law firm, which saw 10 percent growth from 2007 to 2008 and posted more than $980 million in 2008 revenue.
“We did our due diligence. We thought we were merging with organizations that had compatible cultures. I think we got that right. But, when you grow so quickly through combinations, this seemed to be an important checkpoint to make sure that we had everybody understanding what we were trying to accomplish, what we were about and that we were roughly on the same page.”
So in early 2008, Jordan brought in a consultant to conduct group meetings with more than 400 of Reed Smith’s employees from all levels to find out what they thought were critical cultural values to continue the success of the firm.
“For any organization that’s undergone substantial change, whether it’s change through mergers, change through key personnel, change through divestitures, whatever it might be — if you’ve gone through substantial change, then that might be a good time to do a double-check on your core values.”
To Jordan, the keys to creating a solid culture for the 3,300 people that work at the firm revolve around understanding those core values, communicating and then reinforcing the importance of them.
“It’s making sure that’s not just something that gets dusted off once a year, but it’s something that becomes an everyday part of the company,” he says.
Those values and the company’s culture are directly linked to the company’s success.
“It’s like having a healthy atmosphere at home in your family, and it has a lot to do with how people are doing,” he says.
Here’s how Jordan refreshed the company’s culture and how he is energizing it for the future.
Identifying what is critical in your culture can’t be a mandate from the top, which is why the company had a consultant running focus groups with lawyers and staff.
Since the consultant played a major role in collecting information for the company, Jordan had to make sure he had one with the right characteristics.
“They have to be good listeners,” he says. “They have to be open-minded. They have to be good facilitators to have a good open robust discussion. They can’t give the sense that ‘Here’s what management wants to say, so will somebody please say it.’ They have to make sure that people feel like it’s a good meeting and they really are getting a chance to say what they think.”
One you hire a consultant, you have to inform the consultant about what you want out of the process. In Reed Smith’s case, the consultant had worked with the company before, so there was already an understanding of the global strategy. But if you are starting fresh with a consultant, bring him or her into your offices and explain the company’s history and how the company has evolved to its current state.
“All those things are important because they help explain in context why a comment might be made,” he says. “That allows people to actually understand what’s driving it and it allows the consulting group to perhaps not be taken down the wrong path accidentally by misunderstanding comments.
“You certainly want to make sure they’ve had a chance to get a pretty good and thorough briefing on the business, and your style and the kinds of issues that are probably out there. Because the last thing you want is for them to be going down a blind alley without knowing it.”
Once that is all set, you can begin working with the consultant on what questions you want answered and what information you want. Reed Smith stayed away from simply asking employees to list the core values, and instead, questions were designed to illicit information.
Employees were asked questions like, “What are the kinds of things people need to do to be successful in the firm? What are the kinds of things you need to do to be perceived as a quality Reed Smith colleague? What are the kinds of things that you know you shouldn’t do if you want to succeed at Reed Smith?
“The questions were more focused on behavioral elements and then the core values sort of were derived from that,” Jordan says.
In larger markets, there was a cross section of employees from different departments and seniority levels participating in the focus groups. In smaller markets, everyone was encouraged to participate in meetings.
“We really wanted the participants to not just be made up of partners or leaders or high-impact people,” he says. “It was really people in different job areas, different levels of seniority, different pay levels.”
Once the consultant collected the information, Jordan had a team within the senior management team break down the information into a message that they could communicate.
While Jordan was heavily involved in that team, he didn’t lead it. You want to make sure you have a quality team going through this information with you.
“For me, it was making sure we had somebody on that team who understood the breadth of the firm,” he says. “We have a senior partner who is in charge of our strategic planning and merger and acquisition activity. He’s been involved in a lot of the expansion around the world. He understands the culture of the firm and the internationalization of the firm. He was somebody I could be sure would understand that core values that played well in one market would also be core values that fit and played well in another market.”
Fortunately for Jordan, the information the team received from the focus groups mirrored what the top executives were thinking. But team members still had to discuss how to communicate the values in a way that would be digestible. To get the best core values to communicate, you need to keep a few things in mind.
“You have to be open-minded, you have to be good listeners, you have to be prepared to challenge preconceived notions you might have about what the values and culture of the firm really are,” he says. “Because if you end up with something that actually doesn’t match the firm, you’re not going to really advance the cause. You really have to be open-minded and listening and then creative about how you reinforce the end result.”
The whole process from start to finish took about four months.
“You can’t overcommunicate on something like this,” he says. “It’s critical that you think about how you weave these values and thoughts into all your communications — town-hall meetings, whatever written communications, blogs or intranet. All the new communication devices that we now have — how can you utilize each of them to reinforce what you think are these important core values. If they are done well, they are not new to the company.
“They are actually the things that have been keeping the firm successful for many years, but there is a sharper articulation of them and you want to make sure you are getting that out every way you can.”
Keep it positive
You might have the urge to take your eye off
culture-related activities and items with the current down economy, but now actually might be a perfect time to emphasize your culture. Reed Smith’s global customer service center will be relocating to another building, while the legal offices will be moving into a new building. Both moves will be into places that have a more open workspace to create a more collaborative culture.
“From a business standpoint, our determination was that we needed to make sure in the Pittsburgh market, that we had … the kind of modern, state-of-the-art, open space that would incentivize people to join the firm,” he says. “(And) to stay with the firm and to feel like they were with not just a firm that has been in Pittsburgh for 130 years, but a firm which has now become one of the 20 largest firms in the world.”
While the decision was made to move when the economy was doing better, the company has since had to lay off employees. But, Jordan says this is still a good time to make the change to strengthen the culture.
“We’ve had some relatively modest, compared to other businesses, layoffs and some belt tightening,” he says. “One of the questions is, ‘Is this a bad time to be moving into a new building?’ My view is exactly the opposite. This is a fantastic time to be moving into a new building because it will help reinvigorate and reinforce the energy level and the culture that is critical to the firm.”
While not everyone can just up and move to a new, open environment, the general lesson is to remember that some positive culture changes in a tough economy can go a long way.
Jordan says the move will communicate to people they have a bright future and are working for an organization that is planning to be a long-term survivor.
“One of the things we tried to do is think about the impact that a new open environment could have day to day on people — how they feel about coming to work and how they feel about the future,” he says. “We didn’t know when we set this in motion, of course, that late 2008 and 2009 were going to feel as stressful, generally, in the world as they do.”
Laying off people is detrimental enough to a culture’s morale, but with a big expense like a move, those two actions can be misinterpreted. Jordan isn’t going to avoid those questions or any other inquires about what is going on in the company.
“You have to be open and direct,” he says. “When we announced the layoffs, in addition to individual meetings that our managers had with people who were being let go, I had a note that went to all personnel around the world explaining what was happening and why.
“Then, the next day, I had a video that was sent to everybody and posted on the intranet that everybody could click on. Thousands of people watched the video, which explained in more personal and direct terms why this business unit was slow because of what is happening globally, and that, as a result, there is less work. We, therefore, needed fewer lawyers who did that kind of work, and we needed to have less staff.”
You can’t hide when there is an uncomfortable message to communicate if you want to develop an open and collaborative corporate culture.
“You’ve got to be right out front,” he says. “You’ve got to just say, ‘Look, this is hard. We feel really bad about it.’ It’s very true. But, we let 4 percent of our associates and staff go, but we have a responsibility to focus on the 96-plus percent that are still here and to make sure we are running this business in a way that we will be one of the winners and survivors in the shakeout.
“When you explain to people that, ‘We’re not doing this because we don’t care, we’re actually doing it because we do, and we’re going to try and do what’s right for the greater good.’ That helps reinforce what we’re about.”
How to reach: Reed Smith LLP, (412) 288-3131 or www.reedsmith.com