It took a committed team to change the culture of Korbond UK

Korbond was founded in Australia by Henry Korski and his wife in 1956. Their initial success was due to an innovative bonding process for clothing and shoes that Mrs. Korski, a chemist, created. Early on, the business focused on selling to the garment trade. Chinese competition in the 1970s influenced the company to pivot from selling to businesses to selling into the retail market. Korbond operated across Australia and New Zealand and commenced servicing the UK market in the 1980s. Initially, the UK business was serviced through 3rd party distributors, however, over time the strategic decision was made to establish and invest in a UK operation to ensure the high standards Korbond desired to maintain. This was further reinforced by the directors selling the Australia and New Zealand business to the management team in order to give 100% focus to the UK. Both companies kept the name Korbond, although they are independent. We will refer to the English company as Korbond UK to remove any confusion with its namesake in Australia.

Korbond UK’s business strategy is to design, create, source, and supply high-quality products to hobby and travel accessory retailers across Europe, although its products can be currently purchased in the United States through Amazon.com.

It was clear to the directors that it was critical to establish a strong management team within the UK, but this journey was not an easy one. Stuart Caller was hired in 2004 as a marketing specialist, and although the company experienced some good success in his early years, he experienced what could only be described as a toxic culture, where employee morale was low. What was confusing for Caller was the culture he experienced did not align with the cultural vision and values that he understood from the directors during their visits to the UK. There was a clear disconnect between the cultural objectives of the directors and that of the UK management team. 

On a visit to the UK office by company director and owner Peter Truda, Caller had a very open and honest discussion about the toxic culture of the company. As a result, there was firm commitment for change because the culture was neither the one Truda wanted within the organization nor one Caller wanted to work in. Truda encouraged Caller to become a central figure to change the culture. It was clear to Truda that what was required was to remove the old management team that had created the toxic culture. To support Caller, Truda enlisted the help of his daughter and son-in-law, Penny and David Vidilini, both experienced executives in Australian companies. Together with Caller, they created a new management team to run the company. The chemistry between the three was instant. David Vidilini focused his efforts on internal processes and information technology, while Penny Vidilini managed human resources and employee programs. Caller focused his energy on sales and external relations. They formed a strong bond of complementary skills, compatible teamwork, and trust.

One of the first steps the new team took was to identify a set of core values that reflected their own beliefs and the principles that were dear to them. It was believed that these values were essential to support employees and deliver results for the company. The core values they identified were as follows:   integrity and respect, humility, grit or commitment to succeed, pace and energy to get things done, and an ever-evolving push and challenge to make tomorrow even better. Once agreed to by the team, these values were implemented and reinforced with programs to support and drive employee engagement, including one-on-one feedback sessions, coaching, personal development and training programs, enhancements to benefits, improved working conditions, and programs to encourage work/life balance.

Korbond continually measures the success of this culture change and demonstrates it in two ways: first, by the commercial success of the company and, second, by the positive contribution made to the lives of employees and their families. In addition, there has been external recognition, with Korbond UK winning several industry awards,  including Best Wholesaler, Most Innovative Product, and Best New Product. In 2019, the company was awarded Employer of Choice in the city of Grantham, where the company is located.

Caller, who was promoted to managing director in 2018, is most proud of the opportunities that Korbond has provided for its employees. He offered examples of an operations manager who progressed from a temporary worker to her current leadership position. He noted his own rise from marketing executive to managing director. And most noteworthy is that half the workforce has been employed by Korbond UK for over 10 years.  

Not everyone fits in the Korbond culture. Once employed, the expectation is that each employee will live the culture. If employees at any level veer from the culture, they will receive coaching and support. But in the end, they must live the company’s values or leave.

We would like to identify some lessons learned from this case. The first is that companies owned remotely and operated locally can easily drift from the culture that their owners or shareholders desire or expect without the commitment of the management team. Without this commitment, change may never take place. Second, it takes a team to change a culture; one individual, as committed as he or she might be, cannot do it alone. Lastly, to be effective, core values need to be lived by all employees. In the Korbond UK case, the core values are calls to action; they capture the spirit of what we have identified as the five essential components of a healthy culture.

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