Changing Ownership Leads to a Change in Culture at a South American Company

On a recent flight to Brazil, I had the good fortune to sit next to a gentleman who turned out to be the general manager of the South American division of a multinational company. Being curious, I asked him about his company, listening intently to how he described its culture. What I learned was simply amazing and quite unexpected. His company not only had a healthy culture, but it viewed its culture as a strategic advantage. Before we deplaned, I asked him if he would be interested in being interviewed as part of our initiative to tell the stories of how great cultures lead to great outcomes, including financial success. He agreed if we were willing to keep the identity of the company anonymous. Here is what we learned.

First, some background. The company is a manufacturer and distributor of electronic components for several industries, including aerospace and automotive. When the general manager joined the parent company as an engineer over 20 years ago, the culture was toxic. As he described the culture, it was financially driven and had little respect for employees. Bullying employees was common. It was also common to hear comments and jokes made about employees who were different from the majority. Leaders were poorly trained to lead, and there was little emphasis on talent development of employees. If you were lucky, you might get to work for a good manager, but most employees were subjected not to corporate values but to whatever the personal values were of their manager. 

After a change of ownership, the toxic culture was addressed. In contrast to the leadership under the old culture, the new leadership had a different vision for the company. They were no longer just financially driven. Equal attention was given to how employees were treated. The chaos of the old culture’s “everyone for themselves” mindset shifted to a core set of values and processes that supported clarity of expectations and respect for all employees. There was a clear change from a company that viewed employees as tools of a production system to a recognition that employees were partners who deserved to be treated with respect and dignity.

While the corporate culture was changing, the South American division had fallen behind in adopting the new culture. The general manager of the South American operations committed himself to bring the corporate culture changes to his operation. When asked what drove this decision, he attributed it to his parents, who had always emphasized tolerance and acceptance of all people. He also believed that his travel to different countries and cultures during his early career taught him that no matter what individual differences might exist, people were willing to work for leaders who treated them with respect and dignity. These values formed the core beliefs that guided the changes that his team made in the South American division.

The South American headquarters is in a midsized city outside of metropolitan Sao Paulo, Brazil.  This community relies heavily on the company to provide employment and economic stability.  The general manager and his executive team made a commitment not only to its employees but to the community. Here are some of the internal and external programs they developed.

Internally, the company clearly defined its purpose and business strategy, communicating these to all employees. The company also identified its core values, which included work-life balance, talent development at all levels, open communication and transparency, inclusion and diversity in employment, corporate responsibility, and trust. Where the old culture was based on financial results, rules, and discipline to keep workers in line, the new culture assumed that workers were valued partners deserving of investment and inclusion. The company believed financial results would follow.

One area that sets this Brazilian division apart from its other global divisions is its dedication to social responsibility. One program started by the company selects 12 local high school students per year and helps them develop employable technical skills. Students are chosen from communities that are poor and exposed to drugs and crime. They attend afternoon classes for 10 months at the company. Classes are taught by volunteer employees. This program is so popular that there is a waiting list of 150 students. More than a learning experience, this program offers these young students a bridge to a different future life from the one they are living now in their community.

Another initiative of social responsibility is inclusion. The company created task forces to reach out to working mothers, the LBGT community, and minority groups to identify challenges faced by these groups. Using knowledge gained from these groups, they designed programs within the company to address their needs. The company took on the challenges of flexible work schedules and paid time off for parenting, integrating a diverse workforce, and creating an atmosphere of tolerance and acceptance within its culture.

The company has engaged several strategies to address job security. It has insourced jobs that are sustainable, outsourced jobs that are subject to economic volatility, used seasonal temporary workers, modified shifts, and initiated a host of other programs designed to add to job stability for its main workforce. If there is a downturn in business, the company has a program of flextime that reduces hours worked rather than laying off permanent workers. The company sees layoffs as a last, not first, resort to deal with business downturns.

The company prides itself in communicating its cultural norms. Employees are clear on what is expected of them. When employees act in a manner counter to the culture, they are given feedback, coached, and observed to ensure they are in line with the culture. Continued violation of cultural norms will lead to termination, but, again, this is seen as a last resort and is rarely needed.

Overall, the company has created a strong and healthy culture, reinforced by programs that not only support but go the extra mile in accommodating worker and community needs. The company has been recognized as a great place to work and as one of the most ethical companies in the world. On a recent annual survey to assess its culture, employees rated the South American division with a grade of 97 percent, a full 10 points higher than the company as a whole. As for the company belief that a healthy culture drives performance, the division and the entire company has shown solid revenue and profitability growth.

Purchase Unleashing Human Energy through Culture Change, here: https://www.amazon.com/Unleashing-Human-Energy-Performance-Organization-ebook/dp/B07FH7NBL1