How We Fixed Our Toxic Culture: The ‘Culture Fix Playbook’
The well-worn quote that “culture eats strategy for breakfast” has been proven time and again. And in highly challenged businesses, a positive culture is the breakfast of champions — the high-octane fuel that makes success possible and, without it, failure is almost inevitable. But why do very few business turnaround plans include culture as a defined strategy?
When I took on the challenge of turning around Cumulus Media in October 2015, it was a company in free fall: four straight years of declines in radio listenership, four straight years of revenue declines, three straight years of EBITDA declines, and underperforming acquisitions which had saddled the company with an untenable debt load. We also had lousy systems, crumbling infrastructure and unhappy employees who told us in surveys that the ‘dysfunctional,’ ‘toxic’ and ‘lousy’ culture was the primary reason for the company’s poor performance.
It was clear from the start that Cumulus would not be saved by any of the traditional turnaround quick fixes. The company had already made meaningful cost reductions. With our heavy debt, any transformational M&A was also off the table. The market was not going to help — we started the turnaround just as headwinds in the radio industry started to pick up speed. Fixing Cumulus meant significantly improving basic business performance. The big unknown was whether our demoralized employees would step up to the plate.
With almost 6,000 employees spread across radio stations in 90 markets, there had been almost no investment in rank-and-file employees, and turnover hovered around 50%. The company hadn’t given raises in over 10 years and some working conditions were almost unbelievable. I got a call a few days into my tenure complaining about the snakes that had fallen through the rotting ceiling in one of our offices. In contrast, top management received large and highly visible perks — travel on a private plane, hefty expense accounts and lavish offices.
I knew that a disengaged workforce and high employee turnover made reversing the company’s downward spiral extremely difficult. So, I turned to a Culture Fix Playbook I had honed over time, and began to implement six must-do strategies.
1. Define it. You can’t improve your culture without first doing a brutally honest assessment of who you are and then defining who you want to be. Culture change starts at the top, so the leadership team agreed on the few words that described the culture we needed to build to execute our ambitious operational turnaround. FORCE (FOcused, Responsible, Collaborative, and Empowered) became the underpinning of our cultural values framework.
2. Plan it. Your culture plan should be in writing, with key initiatives spelled out and accompanied by targets, deliverables, milestones and key performance indicators. At Cumulus, we live the plan, and measuring cultural progress is a weekly leadership team agenda item.
3. Communicate it. Every employee needs to know five things: where we are, where we are going, why it matters, what’s my role, and what’s in it for me. Every leader needs a direct pipeline to employees. Nothing beats showing up. I have visited almost all of our 90 markets, meeting every employee in small group meetings during which I asked for feedback about our company, the local market and our culture agenda. After each trip, I summarized the themes for follow-up with our leadership team. Word quickly spread that, yes, your feedback is being heard.
4. Amplify it. You must continually take visible actions that amplify your culture change agenda. The more you amplify the faster you will change your culture. To show that every employee’s contribution is critical, we gave out the first merit increase in over a decade — funded in part by selling the corporate plane. All senior leaders and I email or call employees on their service anniversary dates to personally thank them for their contributions. We created the 48-hour rule to address the “pervasive, frustrating and time-sucking black-hole of unresponsiveness from corporate”.
5. Live it. Every employee should be held responsible for walking the talk of cultural values, but it won’t happen unless every leader leads by example. Those who don’t must be shown the door. Any exceptions — even for culture-crusher leaders who are otherwise performing — sends a message that your words about culture are hollow. Employees are given the opportunity to grade each member of the management team and me on our performance in leading the culture change.
6. Refresh it. Cultural change plans must be continually refreshed. Seeing what a positive impact our service anniversary “thank you” notes and calls had, we now welcome new employees with a personal call from a senior leader.
We have been at this for less than two years, but by all measures, our culture has made a 180-degree turn. Employee turnover is down to 24%. Ninety-two percent of our employees say they are proud to work at Cumulus and 91% believe that Cumulus is changing for the better.
Additionally, last month, we announced to shareholders that we had unambiguously turned a corner. Having delivered seven straight quarters of ratings share growth, and six months of across-the-board revenue share gains, Cumulus Media grew both revenue and EBITDA for the first time in three years.
What hasn’t changed is that we are still a resource-starved, over-leveraged company operating in a difficult market. However, as a direct result of our culture fix we showed our employees that we support and value them and they, in turn, are giving us their best effort.
Now, we have a cultural competitive edge sharpened by engaged employees who fiercely believe they are a FORCE to be reckoned with.