Forging a common culture

When Brian Callaghan joined Mittal Steel in 2006, he could not have predicted the rollercoaster ride he would face. Just two months in, Mittal launched a hostile takeover bid for steelmaker Arcelor. When the bid succeeded, he was appointed head of leadership development for ArcelorMittal.

With more than a quarter of a million employees in 60 countries and in two leading industries – mining and steel – his challenge was to try to build a common culture across the company by developing programmes that could be implemented globally. Yet one of the biggest problems he faced was the sheer diversity.

There are 20 nationalities working in the London office alone, Mr Callaghan points out, not to mention differences in job function and the different business culture in the two former organisations.

“My team’s role is to design and develop global processes that are deployable across the group,” he says.

His first decision was to partner with a select number of training companies and business schools to teach traditional face-to-face programmes and deliver online courses – including English language courses, on which thousands of employees are enrolled.

Duke Corporate Education, the customised education arm of Duke University in North Carolina, was chosen out of 40 business schools to run three “talent pipeline” programmes for managers at different levels – in charge of individual teams, multiple teams and senior managers destined for the board.

At the time, Duke CE put the programmes together, they were big business, accounting for 8 per cent of the organisation’s [Duke’s] global revenues. Indeed, ArcelorMittal was Duke CE’s largest global client, says Todd Warner, the education arm’s executive director.

But then came an even bigger challenge: the global economic crisis and recession. ArcelorMittal’s net income dropped from $9.4bn in 2008 to $100m the following year. As personnel and training budgets were slashed, so were the programmes. The eight weeks of programmes that Duke CE taught for ArcelorMittal were reduced to three: one week for each of the three courses. “Post-crisis, they said we need to do this – but on a different budget,” says Mr Warner.

In redesigning the three programmes, Duke CE faced one central question, says Penny Ascher, project director in Duke CE’s London office: “If you’re going to bring people together, what is critical? What do you need to do in the same room?”

Having determined that, the Duke team set about building online and group work to be experienced before and after the programme. Junior level participants, for example, have to contact another ArcelorMittal participant on the programme and find out everything about them before the face-to face programme begins. “One of the aspects of the junior level is communications and culture,” explains Ms Asher. At the most senior level, the managers must work in teams to develop strategies before the course.

The redesign process was cathartic for both steelmaker and educator. Although ArcelorMittal now accounts for about only 2 per cent of Duke CE’s global business, there are still between 300 and 400 managers attending the three programmes this year and feedback from participants is excellent, says Mr Callaghan. One reason for the success, he believes, is the close relationship between business school and client.

“Duke has made it their business to understand our business and understand our culture. All their simulations, for example, are grounded in what is important to ArcelorMittal. The fact that they understand the vision and the strategy of the organisation means they are able to help the individuals to understand it.”

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As a result, Mr Callaghan has recently asked Duke CE to run a programme for chief financial officers across the ArcelorMittal companies, a programme proposed by Wharton graduate Aditya Mittal, chief finance officer of the group. Mr Callaghan envisages there will be other such programmes, which will be taught at the company’s multi-campus corporate university, now under development, with the first centres in Luxembourg and South Africa.

Mr Warner is positive about the relationship. “As a result of going through the crisis, I think the relationship is stronger.”