Influencing Culture at Hallmark Cards and the LDS Church December, 2008

INFORMAL SYSTEMS DESIRED CULTURE SUPPORTING STRATEGIC INTENT STORIES HISTORY CUSTOMS HEROINES RABBI/BISHOPS LANGUAGE PARADIGMS UNWRITTEN RULES STRATEGIC/TACTICAL PLANNING WORK FLOW STRUCTURE CONTROL INFORMATION FLOW DECISION POLICY FORMAL SYSTEMS ACTUAL CULTURE

Hallmark Cards We need a culture that is focused on: – The Customer – Performance – Accountability

Planning Performance and Hallmark’s Financial Cycle

Managing Cultural Dilemmas at Hallmark What’s a dilemma? – A situation where the co-existence of two or more ideas creates significant tension and is automatically “framed” in people’s minds as an apparent contradiction. – 1: an argument presenting two or more equally conclusive alternatives – 2 a: a usually undesirable or unpleasant choice – 3 a: a problem involving a difficult choice <the dilemma of “liberty versus order”

Why do dilemmas matter? Everyday issues often take the form of dilemmas. Change is not just about letting go of the bad — it also includes holding on to perceived good. Efforts to change organization culture require changing how these dilemmas get resolved or mediated.

Resolving/mediating dilemmas Determining how to manage a dilemma: – a clear choice from among desirable or undesirable alternatives; OR – a willingness to live with the tension and inconsistency; OR – a solution that reinvents the relationship among the ideas: from contradictory to complementary. from contradictory to independent. from contradictory to dependent. from contradictory to interdependent.

Dilemma example Performance-based people management practices AND/OR Human resource practices based primarily on performance rather than seniority seriously disrupt sense of fairness. Extremely low termination rate is something to feel good about. Extremely low termination rate is something to feel bad about. “Fairness” at Hallmark is incompatible with demanding high performance and results from people. Performance is about results, not efforts or activities. Focusing solely on results will threaten our great culture and create unproductive internal competition. Seniority/longevity-based people management practices

“Hallmarkers who are performance- and results-driven are rewarded” What this means: – Hallmark recognizes and rewards individuals based on results against clearly stated objectives. – Clear objectives allow direct, fair and honest feedback and performance evaluations. – Job security is based on meeting individual objectives, producing successful results for the business and strong performance in 10 competency areas. – Seniority is valued and is the result of consistently meeting increasingly challenging performance objectives.

Dilemma example Sharing Information: To enable employees to be business partners, they must have information about the business Competitive Secrecy: Our key competitors are reputed to have moles in the building. They are rumored to meet once a week to review what they know about the company. Family Owners’ Privacy: The family that owns the company values its privacy, and that must be protected

“Hallmarkers communicate openly, directly and honestly” What this means: – The nature of our business demands that we hold ourselves to high standards of honesty and compassion in our communication. – Hallmarkers share their opinions boldly and candidly, while thoughtfully listening to others’ ideas. – Hallmarkers recognize that a diversity of opinions, openly discussed and debated, is a prerequisite to good decision-making.

Dilemma example Accountability beyond direct control Line-of-sight accountability* AND/OR People can’t be fairly held accountable for results when their performance is greatly dependent on the efforts of other people or departments over which they have little or no direct control. In a performance-driven company, there should be a direct correlation between how people perform and the rewards and recognition they receive. Working in teams diffuses accountability and covers weaknesses in performance. In an interdependent environment working in teams heightens and strengthens performance. * scope of accountability aligned with scope of control.

“The amount of responsibility for organizational results increases in proportion to one’s level within the organization” What this means: – All managers, and especially senior managers, assume responsibility beyond what they can directly control through their own and their group’s actions. – All Hallmarkers are accountable for their individual job performance and its impact within their own organization.

Managing Cultural Dilemmas at the Church Can I disagree on an issue and: – still maintain a spirit of obedience? – not invite contention into the work? How can I balance the command to be “anxiously engaged…and do many things of [my] own free will” with the direction to follow our leaders? How can we balance a “high performance” work culture with family and Church responsibilities? How do I balance gospel principles such as mercy, forgiveness, the spirit and love with business practices such as rewarding performance, punishing failure, and compliance to policies? How can my past work be valued in times of change? How can I avoid worldly preoccupation with self and seeking the praise of men while focusing on my career and competing with others for positions?

Guiding Employee Performance Gospel PrinciplesCommon WorldlyPractices 1We set the highest of standards expecting eventually to meet them…. The world often defines standards in terms of safe, proven or likely performance. 2We are more interested in being good than in looking good…. The world emphasizes looking good. 3We actively look for performance gaps in ourselves as a crucial step in the process of perfection…. The world is inclined to hideperformance gaps. 4We identify performance gaps in ourselves and others in the spirit of mercy,forgiveness and love which develops a feeling of hope for improvement…. The world is inclined to identify performance gaps as a personal failure which can develop a spirit of self doubt and discouragement. 5We humbly acknowledge the need for personal improvement without feeling personally devastated…. The world is inclined to become defensive and angry when performancegaps or the need for improvement is identified.

1Matthew 5:48 Be ye therefore perfect, even as your Father which is in heaven is perfect. 2Matthew 23:5 But all their works they do for to be seen of men: they make broad their phylacteries, and enlarge the borders of their garments, 31 John 1:8 If we say that we have no sin, we deceive ourselves, and the truth is not in us. 4D&C 95:1 Verily, thus saith the Lord unto you whom I love, and whom I love I also chasten that their sins may be forgiven, for with the chastisement I Prepare a way for their deliverance in all things out of temptation, and I have loved you. Galatians 4:16 Am I therefore become your enemy, because I tell you the truth? 52 Corinthians 7:9-10 Now I rejoice, not that ye were made sorry, but that ye sorrowed to repentance: for ye were made sorry after a godly manner… For godly sorrow worketh repentance to salvation … but the sorrow of the world worketh death. Supporting Scriptures