Culture Secrets
Culture is what causes things to happen inside an organization - both good and bad. It's the heart and guts of a company and it is what determines is they are successful or not. Join interntional best-selling author, speaker and culture expert Chellie Phillips as she delves into what makes people-centered cultures in the workplace unique. She packs each episode with ideas, strategies and real-world learning to help you build workplaces where both employees and companies thrive.
Culture Secrets
Episode 23: The Culture Compass: How Panasonic Built a People-First Model That Transformed Everything
What really changes a workplace culture—and what’s just surface-level noise? In this powerful conversation, Chellie Phillips sits down with Stephen Childs, Chief HR Officer at Panasonic, to uncover the real strategies that transformed Panasonic from a single-location operation into a multi-billion-dollar, award-winning Best Place to Work.
Stephen takes us behind the scenes of their culture journey—from visiting top innovation companies to implementing behaviors-based leadership, enforcing a “no asshole policy,” and aligning every executive around a shared culture model. He shares why ping-pong tables and casual dress codes don’t move the needle, how accountability truly works, and why transparency during crises (including COVID shutdowns) earned Panasonic its best employee opinion scores in the toughest year on record.
We explore:
- Why culture must be treated as a business process—not an HR initiative
- How to get executive buy-in for real, lasting change
- What accountability looks like at every level
- How to align a growing organization around shared values and behaviors
- Why leaders must hear the truth—even when it’s uncomfortable
- How Panasonic cut turnover in half and built deep leadership trust
If you're leading a team, building a culture, or trying to create meaningful organizational change, this episode is packed with practical insights you can apply today.
Thanks for listening. Grab the book the podcast is based on at https://mybook.to/culturesecrets . Check out my website www.chelliephillips.com for more great content. Follow me on LinkedIn.
And a zero tolerance plan on toxic leadership. You'll hear how aligning executives first, hiring to behaviors, and over-communicating turned trust scores around and cut turnover. Here's Shelly with Steven.
SPEAKER_02:Tell me a little bit about your background and how you got interested in a workplace culture.
SPEAKER_00:I've been in uh HR space, I've been here for 24 years, and we've grown dramatically. We went from a very small$400 million organization to over a$3 billion organization. We went from one location to 12, 13 locations and about 400 people to now, about 6,500 people, 7,000 people on any given day. It just changed so much over that time frame. And when we originally started this conversation about culture, it really wasn't about true culture. It was about change management or transformation. We were planning on going through an ERP transformation. And they said, Hey, Steven, you want to be part of this figuring out how we do this change management. And I said, Yeah, I'm all in. So I started having conversations with companies, just like you're doing now on culture and everything else, and said, How did you go through your transformation, your digital transformation? And they said, Before we get through that, talk a little bit about your culture. I go, it's dumping me here. We're people before products. Well, what makes you people before products? Oh, you got me again. We're heavy into innovation. And we were at the time. So I really explained some of the things we did to create an innovation organization. He goes, So you built that into a culture model? I go, we don't have a culture model. So this was back in 2015. So every time I went and had a conversation, somebody asked me about our culture. So I came back and had a conversation with the executive team and said, Here's the problem. Nobody will share their transformation process with me because it really depends on your culture. And they're asking about my culture, and we don't have so then I started this journey of going out and having conversations with some of the best place to work companies in the US. And I just call them up. I'm gonna be in your area. Can I come see you? I wasn't, of course, but I would if they said yes. And so all these companies just started saying yes. So whether it was box.com or HB or WWT, whoever it was, they just said, Yeah, come out, meet with them, and went on a tour, this culture tour. And the original tour was the wrong thing because they basically were trying to tell me or show me here's what we do. We have these bingbag chairs, we're very flexible on our workspace, we do happy hours. This is what our happy hour looks like. They started really just telling me about things. Here's what we do to subsidize our cafe, and so I took all of this back and met with my team, and we did all those things. Ping pong tables, we had ping pong tournaments, we did window Wednesdays, we did we relaxed our dress code and went to t-shirts, branded t-shirts only. But that didn't change anything. It didn't change glass door score or turnover. It basically just made work a little more fun, but it really didn't change the guts of the problem. So we went back, my president and I had a number of different conversations with some of the people we talked to before, and they really said, so what are the behaviors and values? That at the end of the day, basically the behaviors and values you put into your organization, it's what you do and don't tolerate that make your culture. So we went back and regrouped. This was 2016. We went offside as an executive team. We talked about what we had these set of Panasonic principles that had been on a wall for many, many years that nobody could contextualize. And then we said, we're gonna come up with some behaviors. One of the things that we were told, whatever you do, don't come up with the behaviors as an executive team. You got to do that as a company. So we came up with our set first, then we had meetings with all of our leaders and asked them the question: what do you think are the most important behaviors that we should focus on as an organization? And then we went out and did a survey to every employee and got their input. And we took the consolidated version of what we heard, and we came up with our seven behaviors. So that's how we came up with these seven principles that Panasonic is really values that Panasonic has put on the walls for years, and then we matched it with seven key behaviors, and then we brought all of our leaders together and said, here's the deal. We don't care what we told you when we hired you, whether it was one week ago or five years ago or 15 years ago, here's what we're gonna do. Moving forward, this is what we're gonna care about the most. So we put our culture model up and we created a new leadership model that reflects the new culture. And we said, here's what we're gonna ask you to do moving forward. We're gonna ask you to have a relationship with your team. We're gonna ask you to really be responsible for the people in your charge, not be in charge, right? We've explained the accountability model that we're gonna hold them accountable to this new model. They have to think through, it's all about the conversation, is one of our taglines. And we basically said, look, you're gonna, a lot of you are really gonna suck at this at first. And that's okay, right? We're doing a bait and switch. So all we're asking you is if you want to stay in this leadership job, that you go into it knowing this is what we want you to get better at. And we'll help you get better. We'll train you. We did. We brought in a lot of training and support. We had a lot of meetings, we just overkilled it. We brought in the Neuro Leadership Institute to kind of help launch it for us. And we basically said, now you're responsible for latching onto. If you're going to be successful in this organization, you've got to care about your employees, think about high potential development, their succession plan, their role clarity, organizational design and development, and talking to them and getting to know them at a personal level. And we built that all into their performance management process. And then we said, we'll give you grace, right? Again, we're all gonna have to figure out how to do this better. About six months later, we said, now we'll still keep training you on these new leadership competencies, but if there's anybody who's not meeting these behavior requirements, you're not gonna be here. You've had plenty of time to get accustomed to what we're saying from a behavior standpoint. We care 51% how you do it and 49% what you do. So your job's important and your technical expertise is important, but we care 51% how you do it. And we said, if you're not gonna do it to these behaviors and values, you're not gonna be here. And so the next six months, we terminated about 26 people. And we said, look, it got real easy. So we took the first one we did was that we branded the termination. So we had to go to legal and say, look, we're gonna have to terminate this person for being a butthole, basically, for not following these behaviors and principles. And we're gonna tell them we're firing him because he's a butthole. And we did. We actually used stronger words than that because we basically said we're gonna have a no asshole policy. That's what we're gonna create. We're not gonna tolerate it. If we have if we can corroborate, that's the way you're leading, you're gonna be out here. We basically terminated him, and we went and told the company that we terminated this individual as a very high-level individual. And we said, look, we terminated this person, we have sort of zero tolerance related to our behavior. And then we did that 26 more times over the next six months at every level in the organization, DP level down to uh person who just started fresh out. And after we did that, man, the people got on board with this thing. They knew we were not just rolling out some flavor of the day culture model that we really meant it. Because we were some of our best engineers, one of our VPs, right? And then everybody we brought in, we really matched their whole interview up to this culture model. And we spent more than 50% of the time on interviews with the culture, the other part of the time we spent on your technical capabilities, and that dramatically changed everything for us, to be honest. It changed our employee opinion survey where leadership trust went from almost last to first. We were very transparent and everything moving forward. We took all of our people processes, we turned them into playbooks, so everybody knew exactly how we did, what we did, why we did it. And then we went on tour and went to every facility and let people just ask questions about our processes, why we're going through this, the culture. And from then on, we just kept supporting it more and more with all those people processes. Whatever we did, we would basically pull out the culture model and say, how is how are we going to do this as a leadership team and match up to this culture model? During COVID time frame, when COVID hit in March of 2020, basically they shut down our plants in Mexico. So they almost shut down our operations uh for the part of April and almost all of May. May we had 5% of sales. It was pretty dismal. We said, look, we're gonna have to do something. They literally won't even let us build anything. So we're probably gonna figure out for the next six months or so, we're gonna have to look at some furloughs and some pay cuts along with a lot of other companies. And we said, All right, how are we gonna do? So we pulled out our culture model and said, here's what we're gonna do. We're gonna over-communicate with all employees about what we're doing, why we're doing it, why we need to do this, what our business looks like, what we're thinking. And then we're gonna, for pay cuts, we're gonna take almost all the pay cuts at the top and then work down a few levels. And then at some levels, we're not gonna do any pay cuts. The ones that it's gonna hurt the most, we're not gonna do any pay cuts. Versus this 10% pay cut across the board for everybody, it hurts people differently, and we recognize that. So we took them more at the top. Then for furloughs, we were just highly community with how we did these furloughs. So we went through that whole process. We cut people's pay, we did the furloughs, and then October came, and we were gonna put everything back the way it was, but at the same time, we had our EOS survey that was due to come up. And we said, man, we're just gonna get hammered on this employee opinion survey because it's been such a bad year. We had to furlough people, not lay off anybody. We had to do a cafe, but we said, look, some of the companies were gonna just skip the year and say it's an anomaly. We're not gonna do employee opinion survey, even some panasonic companies. We said, we're gonna do it. We wanted to hear it how we still want to hear how we did during this time. So we went through the EOS survey, and when we got it back, it was the best EOS survey that we ever had in the worst possible year that we've ever had as a company, which told us very, very clearly it's not about how well you're doing, it's how well you're managing that culture model with your employees that matter because that was our best EOS survey. But to us, I was telling we did something right. The last four or five years that we worked on this thing wasn't in vain. It made a huge difference. We already saw a difference in our turnover. We're half of what our industry is in turnover. We saw this EOS survey that said this is the best EOS survey we had, and one of the better ones, Panasonic globally. It was a really good validation for a lot of the work that we've been doing. And still today we've double down on it. No matter what comes up, we look at that culture model. We talk about it first at all of our meetings. So even if you're in a quarterly operation meeting, you're gonna hear about the culture first. We're gonna have our all hands meeting here at one o'clock, and the first slide is our culture model. So we lead to it, we manage the business to it, and it's it's now at the core who we are as a company. And it's allowed us to become a best place to work company since 2016. The last two years, we've on top of being 101 best place to work, been the number one 100 best place to work two times out of the last five years. And then the last two years, we've become uh great place to work, certainly.
SPEAKER_02:I think the trust and transparency is huge because people needed to know and be able to believe what they were hearing. And it's not surprising that if you're doing all that right on the back end that it's going to show up on the survey. I think that's really the key when you put your people first in what you're doing, then everything else seems to fall in place. Yeah. One of the things that was having some of these conversations was that there's not a line on the budget for culture. Like so when people are making plans, how do I put this into the work plan and all this other kind of sense? So when you were taking it back to the executive leadership team, or however you go through the process to be able to budget for initiatives and do these kind of things, what are some of the things that you took back to point out and say, okay, well, culture itself is not very tangible. Here's some tangible results that we can get from that you can actually try to put towards a budget item that makes us something that we should actually invest in.
SPEAKER_00:Yeah, the interesting thing was is I came back with a list of things to budget on cafe, subsidizing cafe, and window Wednesdays and changing the environment, all the things that we spent a good bit of money on that didn't work. The funny thing is, most of the things that really have a dramatic impact don't cost that much. We increased our communication team. So that was one of the best things that we could have done was increase our communication team. So we had a communication plan for all of our big, all the big things that we were going to roll out. If you don't have a good organizational change communication plan, then tell people what you're doing, why you're doing it, how you're doing it. We stuck around those three. That was a little bit costly. The other thing that we stuck with is the development. We said, look, we're not taking away our development money. And even during our worst times, we didn't mess with our training budget. We said, now we're gonna take the time to upskill you. You tell us what's important to you. We helped you train. We're gonna disproportionately train some of our accelerated leaders, and we're gonna leave this budget open for you to come back with your leader to say, what do you need to close the gap on? And to this date, we haven't spent our training budget fully, and we're not taking it away. We're leaving that space open for people to go, this is what I need, and this is how I need to really close this gap. And that's been very hard because it's been a tough two years for people to get this concept of allocating my time, working with my boss to allocate the right amount of time for this training. So we still have people who go, hey, hey, I still not getting all the training. Well, it's there. You just got to work with your boss to figure out, and you've got to disproportionately carve out the time to get it done. And people who do that time block and everything else, figure out a way to build the training, but not everybody's good at that. So that's kind of ongoing for us, is really teaching people how to put that on the forefront of their daily activities instead of waiting until some time free up to get training, because that never happens.
SPEAKER_02:Yeah, there is no free time. And I think that's important. The book is based around value culture, and V is vision, A is accountability, L is leadership, U is the uniqueness of the people, and E is engagement. And I think one of the things that I've seen when I've been talking to everybody is the accountability piece is huge, that it cannot be just on the leadership team to be accountable for the success of this, that you have to be able to pull that accountability down to awareness on an individual basis. That each one is accountable for the success. So, how do you get that message out there that this is just not something that is a leadership initiative? This is something that we want you to take hold of in individual cubicles and individual workspaces as individuals to be able to make the impact that you want to see.
SPEAKER_00:Yeah, so part of our messaging around this and in our playbooks, do we have a message for leaders and we have a message for everybody else? And both basically have accountability built in. Performance management is the same way. The leaders have uh training and development is the same way. Leaders have a space in there that they're accountable for, but the employee, we say the employee, the number one advocate for your training and development is you, not your boss and not HR, and not the executive team, it's you. We'll create a space for you to get it done. You've got to make sure you get it done. Same thing on our culture model. Accountability is one of the behaviors, and we focus on that. So we'll focus on these accountabilities. I don't know if you ever heard of Jocko Willett. So, Jocko Willett, we actually played a video and we had let everybody have a copy of his book who wanted a copy of his book, it's on accountability, extreme ownership. And that was a little harsh for some because it's pretty intense. But the whole point is it can't be the executives, it can't be HR. It has to be everybody holding each other accountable for what we say this culture model is. And most of what's going to improve it is not the leadership team. It's employees basically saying, this is broke, this needs to be fixed, this is what I see, this is what it feels like. Same thing with DEI. If you don't have employees telling you what's broke, telling you how it feels, then it's really hard for the leadership team to prioritize and make those changes. So that's the way we do it and the way we talk about it. And we have what we call real talks, where we bring our employees together, they can get on the call with the executives, freeform, tell us what you're thinking, tell us what's broke, tell us what's working, so we can continuously prioritize our level of repair to the gaps.
SPEAKER_02:So I know you're getting close to having to go. One last thing that I'll ask before that is what's the best piece of advice that you would give a team that was looking to make a change?
SPEAKER_00:Yeah, the hardest piece is getting the executives to agree. The number one change thing, if you spend any time on change, it's just getting the executive team to agree that they're gonna do this together, that they're all in. They don't all have to agree on every part of the culture model. They have to agree that this at the end of the day is gonna be the culture model, and they have to own it, right, as an executive team. It can't be launched from HR. You gotta all your processes, and they need to become business process. Culture is a business process. If they see it's important to the president, and if they see it's important to all the executives, and they talk about it in their meetings first, everybody will be in. So, number one is just getting that executive leadership team, not a communication team, to go do it, not to go brand it. The executive team becomes the branding mechanism for which this culture model has to be infused into your business. And then you get all your employees involved. But most people try to run their culture, and I get called by companies all the time to go, it's not working for us. Because they ask HR or their communication team to go launch this thing, they ask HR to talk about the training, they have HR talking about performance management, when every bit of that should be talked about, those functional leaders in the business. And when you do that, the priorities just change for the employees. The huge buying-in, those all those things become business processes.
SPEAKER_02:Yeah, I think there's a lot of truth to that. Everybody assumes that if the communications is launching it, this is just another something, and then there'll be something else that replaces it six months down the road. It's just another initiative. What you're wanting to do is really kind of something that's going to be long-term, really deep soon. I think the interesting thing you said there about the leadership team getting them involved. I think one of the things that's come up through some of the conversations that I've been having is that leaders get clouded. Their vision gets clouded because of the people that surround them. A lot of times, people surrounding a leadership team don't want to say there's something that's not right or there's something that's not great. So if the conversation happens, it's like, oh, everything's great. How can a leader make sure that they're keeping their vision in focus instead of letting it be clouded by maybe what they're hearing from the people around them?
SPEAKER_00:Yeah, the key to that is having that strong core model, because we did the same thing, right? I would go off on my tangent based off my team and who I was exposed to. We didn't have that compass, right? So the model itself, these behaviors and values, and not only that, is we prioritize the most important things that we work on as a company. So every year we launch it again with these are the three most important things, and this is how we're gonna do it, right? So this is the behaviors and values that we're gonna do these three things with. So we're all pulling on the same rope with the same cultural narrative for every group. So you can't get lost. So they can send me on my way and talk with my team, but on the way with the same message they're telling everybody else. Here's the three things, all my goals and objectives are tied to these three things, all of my people's goals and objectives are tied to these three things, and everybody's tied to those behaviors and values on their performance. So it's really hard to get steered away from that culture bomb. And when somebody does, because maybe they're not fully bought in, then it becomes really apparent and it gets escalated back up through the chain of command really, really quick. So we can go either get on board or we'll help you find a place, hopefully, one of our competitors that you can go ruin their culture, and we'll be glad to help you transition out. It's really hard to get off track if everybody has the same company.
SPEAKER_04:You can learn more from the culture.
