Crafting a Culture of Innovation and Adaptability with Schwan's Company

The Next Practices Weekly call series has become a well-attended and wide-ranging discussion for HR leaders each Thursday at 11am ET / 8am PT. On this week's call, i4cp VP of Advisory Services Marshall Bergmann and i4cp Senior Research Analyst Tom Stone were joined by special guests Dimitrios Smyrnios, former Chief Executive Officer; Scott Peterson, former EVP & CHRO; and Kari Ziemer, Chief Talent Officer and Vice President of Human Resources at Schwan’s Company. Here are some highlights from the call:

• Schwan's as a company was started in the early 1950s by an entrepreneur and is headquartered in Minnesota. Privately held, today Schwan's is a multibillion-dollar company with around 10,000 employees and specializing in fine frozen foods (e.g., pizza, desserts, Asian foods, etc.) in grocery-store freezers and in the food-service industry. Last year, for companies between $2-8 billion in size, Schwan's was the fastest growing, regardless of category/industry.
• What was the context for the need for a culture renovation? About 10 years ago the company faced the need for a turnaround after the founder passed away unexpectedly and the company suffered a decline in its culture. As the new CEO, Smyrnios spent 90 days on a listening tour to learn what exactly needed to change. What he found was an organization that was very complex, a culture based around silos with employees focused on their own role only. Essentially, every process in every function needed changing.
• Smyrnios noted that they needed to get clarity both on the what -- the key business outcomes and strategy they were going to pursue -- as well as the how -- the culture and talent processes that would meet those goals. In short, "Culture is the only way that you can have sustainable results," Smyrnios said. The "whats" needed a turnaround because the culture, the "how", had fallen apart over time.
• Smyrnios shared his view on culture that: "Culture is hard. Culture never ends. There is no month-end to culture. There is no KPI that says you're perfect, because as soon as you think you're really good on culture… it can go south." He further said you must have patient when working on an organization's culture, as long as everyone involved is working towards improving the culture.
• Every year for ten years Schwan's had their roughly 150 most senior leaders gather for two-day meetings, and they would spend equal minutes on the "what," the sales results, business strategy, etc., with the second day focused on the "how," the culture. This focus has been critical to the improvement in their organization's culture.
• Smyrnios said that the focus on culture had to start with him as CEO. And they did lose some leaders over time, as some were less inclined to focus as much on culture.
• Peterson stressed what i4cp's culture research has also found: the CEO driving the change is critical to its long-term success. They need to model and lead the changes, not just support them.
• Peterson also stressed the importance of transparency and trust: leaders can't hold back information, often a hallmark of prior unhealthy cultures in many organizations.
• That said, Peterson noted that another issue they previously had was a little too much "Minnesota nice," and not enough debate, constructive criticism, etc. The key was all leaders had to be aligned on the outcomes and that culture improvement was going to be the "how" they get there.
• Ziemer noted that the culture change process included a lot of research into what great organizational cultures look like--but they did not use an external consulting firm, because they wanted to make sure what they landed on was fully their own. They went through many iterations of their culture framework, and they also spent time on what good leadership needed to look like at Schwan's.
• Schwan's Culture Journey had made key moments, as shown in the timeline below:

• As shown in the image below, Schwan's culture framework has four key components.

• Regarding leadership, Smyrnios shared that a reflective exercise that he has found helpful over the years is to ask himself "Would you want to be led by YOU today? [While most days the answer is yes]… sometimes the answer is no, and then the key question is why not? What will you do differently tomorrow?"
• Peterson shared that when you are a leader, people watch--sometimes even more closely than you'd expect them to. So being aware of your impact on others is very important. If you are driver, focused only on results, that can have a negative impact--especially on more junior employees.
• Ziemer said that a key learning for her from this journey is the critical importance of feedback. What are the things she can do better as a leader? Taking constructive criticism and improving from it, e.g., being more fearless, break a few eggs, etc., has been a great gift.
• Ziemer said that a key aspect of the implementation of the culture change at Schwan's has been embedding it everywhere. This has included dedicated culture sessions; talking about culture in broader town halls and team meetings; culture embedded in the talent performance processes; culture embedded in their recruiting and interviewing approach; and then various reinforcement mechanisms. For more on this, see the slide titled "Continuous Investment in Culture" in the PPT deck or recording above.
• Smyrnios gave an example of how culture shows up in talent acquisition. You can't be a hypocrite and hire people who are only smart, or only have the skills required. Yes, they need those attributes, but they also need to be willing to further the organizational culture they will be joining. Peterson added that they take the same intentional, culture-centric approach when reviewing their talent as part of succession planning.
• Peterson concluded by noting that as he and Smyrnios are retiring, they have confidence that the new leaders will be able to sustain and continue to evolve the culture that is now in place--and therefore continue to reap the benefits that it has brought to business results.

Links to resources shared on the call:

• Upcoming i4cp virtual events
• i4cp's Next Practices Now conference
• 2024 Conference Recordings (members only)
• Information on i4cp Membership
• i4cp’s new Team Network Effect report (full report for members only, non-members should download the executive brief)

To ensure open discussion, this event is exclusively for HR practitioners. Vendors and consultants are not permitted to attend.