Forwarding Organizational DNA: Sustaining Culture Amidst Rapid Growth
Scan Global Logistics (SGL) has successfully preserved its organizational DNA and fostered a culture of meaningfulness even amidst substantial growth.
But it takes continued priority, consistency, and processes to keep forwarding the organization’s unique DNA to new recruits, new acquisitions, new leaders, and the organization at large.
From a wrinkled piece of paper to reality: Making culture a little less complicated
It’s been almost five years since the executive management team sat around a table, each taking turns expressing why they work at SGL and what makes the culture unique.
It was the first of many discussions, trying to grasp the essence of the rapidly growing forwarder. They knew that what they were part of was special. But they did not know exactly how to express it. More colleagues from across the globe joined the conversation. Customers and suppliers were invited to give their honest feedback. And then, during a leadership workshop in rural parts of Denmark, a wrinkled piece of paper was circulated. “We make the world a little less complicated,” it read. That is why SGL exists. But how? By always bringing a human approach to everyone, everywhere. An approach that, in the weeks and months that followed, was captured in Fun, Integrity, Respect, and, not least, Entrepreneurship.
Easier said than done, of course. But fast forward to 2023, and SGL has expanded its workforce by almost 200 percent, achieved an annual average revenue growth of 33 percent to reach USD 3,506 billion, with a presence in more than 45 countries across all inhabited continents. What was an anticipated future became reality – and then some! Adding the impact of a global pandemic and the integration of 5-7 acquisitions per year, you would think that the organizational culture would suffer.
USDb 3,506 (2022)
Making the world a little less complicated
“We don’t expect our leaders to be perfect, but they need to be motivated to create a meaningful workplace”
Global COO & CCO
Globally, as documented by Voluntās, work in the world outside SGL became significantly less meaningful. The logistics industry, in particular, had a hard time with disrupted supply chains trying to catch up with inflated demand. But in SGL, something different happened.
During 2020 and 2021, SGL not only improved their MWQ score from 75 to 77 but also stayed an impressive 15 percent above the global logistics benchmark. While that seemed almost too good to be true, 2022 resulted in the highest Meaningful Work Quotient (MWQ) ever documented for a company of its size, with SGL further improving by 3 percent, reaching a total score of 80.
“But being clear on our DNA has enabled us to be even better at promoting the right behavior, attracting the right people, and anchoring who we strive to be in all corners and processes of the company. This is a continuous journey that never ends, and while we remain our biggest skeptics, we will try our best to create a meaningful culture and constantly develop the right tools and structures to remind us about who we want to become.”
Cultural Due Diligence: Scrutinizing every step of the employee journey
According to Mads Drejer, structure and tools are essential in scaling a culture during extreme growth. Getting data-driven insights into how meaningful it is to work for SGL is one thing.
But SGL went further to look at every single step of the employee journey and examine how each step, each process, could be tweaked to amplify the right culture. Starting with the leaders, SGL’s DNA was translated into tangible behavior for all leaders to get recurring feedback on their performance according to the company’s four virtues. The results were clear. The leaders performing well in their 360-degree leadership assessments also had a 53 percent higher MWQ-score in their teams and a 23 percent better performance on retention.
SGL then focused on their recruitment process and started assessing all potential candidates for leadership positions on their self-awareness and cultural fit to SGL. Finally, SGL has installed a strong focus on culture into the due diligence process for all potential M&A targets.
“SGL runs on the energy of good people. When they grow, we grow. This is where our organic growth comes from, and it is what unlocks the synergies and multiplier effect in our acquired growth. We don’t expect our leaders to be perfect, but they need to be motivated to create a meaningful workplace. This starts already before we let people in through our doors. Whether through recruitment or acquisition, we have invested in a rigorous process, conducting a cultural due diligence on every individual and M&A target to qualify how they fit into our DNA and culture. Culture might have an appetite for strategy, but nothing eats culture like poor leadership, and we will never realize our commercial potential without the right leaders who share our visions and virtues,” Mads Drejer, Global COO & CCO.
Cultural Preference Assessment Tool
The purpose of the Cultural Preference Assessment (CPA) is to uncover differences and overlaps between the company culture and potential candidates
Compares the candidate’s cultural preferences with the organizations’
Focuses on different cultural alignments, incl. strengths and weaknesses
Asks the candidate to explain the organizations’ virtues of the organization from their perspective
Higher MWQ-score in their teams
Better performance on retention
Vision 1-3-5: Towards 2027
Last year, SGL launched its Vision 2027. 170 leaders from across the globe were gathered in the middle of a forest for a three-day festival to kick it off. Labeled 1-3-5, it aims to unite SGL’s cultural DNA with its commercial ambitions. ‘1’ points to the aspiration of becoming the most purpose-driven and meaningful company in the logistics industry. For SGL, culture and business are fundamentally viewed as one and the same from the core belief that by growing its people, it grows its business. ‘3’ points to the aspiration of reaching the best 3rd in the logistics industry on earnings.
For SGL to realize its potential, earnings function as financial oxygen to ensure a strong and sustainable business with the appropriate attention and discipline to maximize value. ‘5’ points to the aspiration of achieving a total USD +5 billion in revenue. The rationale, according to SGL, is that the more it grows in size and footprint, the bigger an impact it can have on the world to uncomplicate logistics. In the spring of 2023, SGL welcomed CVC Capital Partners as new majority owners as part of entering the next phase of the company’s growth.
“As much as we enjoy the prospect of making SGL a success in financial terms, that would be worth absolutely nothing to us if it was not achieved while having fun along the way,
paying respect to the people who work hard every day, being entrepreneurial in the market and having the integrity
with us to be able to look ourselves in the mirror and be proud of what we do. We are now a USD 3bn company,
but without continuously mastering our DNA and human approach, our ‘1’, we will never achieve ‘3’ or ‘5’. With new
owners on board and armed with humbleness, we remain committed to becoming the most purpose-driven and meaningful company in the logistics industry.
One shipment at a time,” Mads Drejer, Global COO
Interested in more?
Nicolai E. E. Iversen
Chief Philosophy Officer & Ass. Partner