Merging Cultures at Macy’s

Leadership training events at Macy's often start with an acknowledgment of something that would otherwise be an elephant in the room.

We say, 'We know some of you feel like hostages here' -- and hostage is the word we use,” says Sherry Hollock, the company’s vice president of talent and organization development. “'You're here because you have to be, and you are doubtful that the time you spend here will be helpful to you.'

In the end, Hollock says, most participants walk away with information they know will be useful. And Macy's has received -- especially through sessions conducted in 2007 -- additional opportunities to unite its leaders on the same page.

That has been the challenge since Federated Department Stores acquired May Co. in 2005. (Federated changed its name to Macy’s last year.) In September 2006, more than 400 former May Co. stores, operated under nearly a dozen nameplates, converted to Macy's.

The company that is now Macy's has a long history of investing in training designed to groom its leaders. But specific priorities for last year's training had to be tweaked. We designed the ’07 [leadership] programs knowing that we were going to have every [legacy May Co.] executive coming through, from the store manager level and above, Hollock says. “Moving from role to role inside the same organization is one thing: it's quite different moving from one organization to another.

Robert Goldberg knew from the moment he learned of the Federated-May deal that leadership training would have to play a key role in bringing the two cultures together. Goldberg is a Greensboro, N.C.-based partner in Organization Insight, a firm that specializes in strategic consulting, training, executive team development and executive coaching. It is one of a small number of outside partners that Federated/Macy's has worked with for years in developing and executing its leadership training programs.

My premise going into this was that their cultures would be quite similar, Goldberg says. After all, both were large retailers with long histories and plenty of experience with past acquisitions. I thought this would be a cakewalk.

But Goldberg was surprised by how differently the leaders from the two companies approached their roles. Many of the core values were the same but those core values manifested themselves in somewhat different ways, he says.

For example, managers who came from the May side were much more accustomed to tracking performance on paper, whereas the original Macy's crew had more experience with computerized, company-wide data.

Shift in mindset
Then there was the issue of centralization. At May, direction came from the top down and people executed -- and, I will tell you, executed very well -- that direction, Hollock says. Macy's veterans were used to an environment in which managers weren't looking for a higher-up to tell them what to do and were more likely to approach them to present their own plans for meeting goals. Looking beyond a prescribed course of action was -- and is -- not only accepted, but expected, Hollock says.

Learning to make a shift in mindset was a major theme of communication and training throughout 2007. Our role is to help them make the transition, to understand what is expected of them personally and in relation to the business, Hollock says. They become better leaders in the business and they get the results that we expect to see from them.

Hollock says an impact study showed that 96 percent of respondents said they learned something new through their leadership training and had used it in their work. About 70 percent said they’d already seen results, with many others fully expecting to see them soon.

Simulations and plenty of opportunities for frank discussion were woven into the training curriculum. I think that's one of the reasons that it had such a big impact, Hollock says. People walked away with a much better understanding of how they needed to be successful and how they could leverage what they brought with them in terms of experience and skills.

Goldberg applauds Macy's for keeping its four priorities (differentiating assortments, simplifying pricing, creative marketing and making the shopping experience better than shoppers will find anywhere else) front and center during its leadership training and communication. There was ‘true north’, which really helped, he says. This was like the keel of the sailboat. Even if there's a storm, it helps keep it upright.”

Coping with extra employees
From his vantage point, Goldberg noticed a different theme of interest among those who participated in Macy's Leadership Choice sessions in 2007 compared with years past. Many of the recent questions related to how individuals can best fit within the organization; he suspects focus will soon return to what individuals can do to best advance the company's mission.

And there are some things the learning and development team at Macy's would do differently if the company were to go through something similar again.

For instance, Hollock says, more emphasis would be placed on making sure legacy leaders are equipped to handle a sudden influx of new team members. Additional focus in this area would have been helpful, particularly in situations where, due to the merger, a mall went from having two stores to just one.

You can never do enough communicating, listening and helping people through a transition, she says. Whenever you think you've done enough, you haven't.

A merger of this magnitude “doesn't just happen, and six months later it's over, Hollock says. It takes a much longer period. It takes tremendous care and feeding. And it takes lots and lots of patience.