Lyle Heidemann knew exactly what he needed to do when he took over as CEO of True Value Hardware in 2005: shift the organization’s focus from wholesale excellence to retail expertise.
In an effort to save money, the organization spent the three years before Heidemann took over as CEO tightly managing costs, which included headcount reductions. Despite these actions, the company did not achieve its sales or profit forecasts. As Heidemann recently explained to me, it was time to help its retailers accelerate growth:
We are a wholesale company owned by our retailers…We needed to change our focus from figuring how to get (our retailers) to buy something from us to helping them sell to the ultimate customer…from a wholesale focus to a retail focus. Our vision, our strategy and our mission all follow.
The challenge was changing the organization’s culture so that its behaviors, relationships, attitudes, values and environment all helped every True Value be the best hardware store in town. Heidemann knew in advance that this was going to be a five-year effort. And he knew he would have to do it in stages. Six years in, we know he was right. Now the “vast majority” of True Value’s associates buy-in to the strategy and are focused on helping its retailers grow.
The key steps Heidemann deployed included:
– Preparing management and associates by getting them aligned around the end game;
– Implementing the changes through the co-op’s retail members;
– Following through with ongoing, consistent communication.
(Note these are steps that could have helped Time Inc.’s Jack Griffin keep from failing in a similar situation as described in this article on “When a Shock Fails“.)
Heidemann first concentrated on getting his eight direct reports to commit to the vision and the need to change the culture. There were individuals who felt uncomfortable with changing the focus, and recognized this would require personal risk-taking on their part and a number of years of dedicated commitment. As a result, all did not make the journey.
Defining the end game is always the hardest part.
Then Heidemann and his management team turned their attention to the top 75 leaders in the organization, getting them to buy-in to the change and the approach. These first two steps took several months. Even with a great sense of urgency and a clear platform for change, no leader can change the culture on his or her own. It’s always worth the time to build the team up front.
These were the people that manage the people.
Heidemann and his leadership team then enrolled everyone else. They conducted monthly “forums” to share the big picture (not the detail) and engage the associates in ongoing conversations. The turning point came when he bussed the headquarter associates out to a warehouse they’d set up with the new retail store format. He and his leadership team said, “We could be this. This is what retail is. This is our point of view.”
Now they were listening.
This had to be an evolution, not a revolution. In a co-op, the central group can’t tell the members what to do. But it can give them new tools and show them how much better their business could be if they adopted the tools. This is what Heidemann and his ever-growing band of supporters did and continue to do in their “markets,” round-tables and weekly communication.
We’re dependent on helping our retailers grow.
3) Follow through
It’s ongoing. Heidemann continues to spend time with retailers at the store level. He’s visited over 1,000 stores. He knows their issues. He knows their results. He’s conducted 14 roundtables with retailers in just the last three months. Heidemann and his team continue to drive change at every level, from the back room to the shelf, from the headquarters to the mom and pop hardware store that is the hub of the community.
The messaging has been consistent…If you get the people that manage the people committed to change, the people that work for them over time will change with you.
This is a good example of step 5 of The New Leader’s Playbook: Drive Action by Activating and Directing an Ongoing Communication Network (Including Social Media)
Everything communicates. You can either make choices in advance about what and how you’re going to communicate or react to what others do. It is important to discover your own message and be clear on your platform for change, vision, and call to action before you start trying to inspire others. It will evolve as you learn, but you can’t lead unless you have a starting point to help focus those learning plans. Identify your target audiences. Craft and leverage your core message and master narrative. Monitor and adjust as appropriate on an ongoing basis.
(Follow this link for more on a new model for communicating in today’s world.)
The lesson to learn from True Value’s transformation is the power of a consistent message and the importance of driving that message all the way through the organization over and over again over time. Six years in, Lyle Heidemann is still treating every day like the first day of the rest of his career.
Click here to read about each step in the playbook.