Building a healthier future for Lucet through… | Gagen MacDonald

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Building a healthier future for Lucet through culture transformation

Apr 24, 2023

One of the most rewarding aspects of any long-term client engagement is the opportunity to watch an organization evolve and grow stronger over time. Transformation, particularly a cultural one, is seldom a straight line and never an overnight phenomenon. In this interview with Senior Director Greg Voeller, we discuss the multi-year engagement with Lucet, formerly New Directions. Specifically, how the partnership with Gagen – and a focus on culture – enabled the organization to move and gain ongoing momentum through a significant evolution, skillfully navigate a critical merger and launch a new brand in a highly-competitive category.

HB: Greg, perhaps we can start with who Lucet is and how long Gagen has been working with their executive group.

GV: Lucet, which officially launched in the market January 2023, is the evolution of a company formerly known as New Directions. In practical terms, Lucet is a provider of behavioral health services that works with a number of health plans across the U.S., and also acts as the Employee Assistance Program (EAP) provider for a number of organizations. Overall, Lucet serves more than 15 million members across the U.S. I’m proud to say we’ve been involved with the organization for more than three years while they’ve tackled some critical milestones in their evolution from New Directions to Lucet.

HB: Can you give some context to that evolution? Specifically, what challenges were New Directions facing and why did they call on Gagen to assist them?

GV: In many ways, New Directions was facing a perfect storm. The category they operate in is highly competitive with a number of significantly larger organizations actively participating. Secondly, they – and their competitors – were seeing tremendous growth in the category and everyone was looking for a distinct way they could capture that growth. Thirdly, while New Directions could genuinely claim that they had a very strong culture, it was very clear the organization would need to significantly enhance their business model, and their culture, if they were to succeed in this new market. Not surprising, a key element of that business model evolution was going to require a technology enhancement or digital transformation.

Gagen was approached early in this transformation for a number of key reasons ­– reasons that the Lucet leadership team have acknowledged over the course of our engagement were crucial as the organization adapted to these new market realities.

First, we employ a holistic approach to transformation. This approach is grounded in a framework in which we look at Strategy>Culture>Structure as critical and deeply interwoven aspects of any change.

Second, we place humans at the very center of any effort and have used this human-centric approach throughout our 25-year history. There were several times where the Lucet team would acknowledge that their domain expertise in operations and process engineering did not give them the orientation or expertise to understand the deeply human component of culture.

Third, we operate from a foundational understanding that “our cause is our client’s success.” From the beginning, our Founder Maril MacDonald has always put emphasis on relationships and how the Gagen team deeply partners with our clients. Truth be told, I believe that’s a primary reason why so many of our engagements are from former clients who have enjoyed working with us as much as they have appreciated the impact of our work.

HB: Great context Greg. Over the course of an engagement like this, there must have been several important milestones that informed the nature of the work that Gagen did. Was this a case in which the approach had a clear path and sequence?

GV: Not exactly, because change occurs at different speeds and in different ways depending on the organization. The go-forward path is always heavily influenced by the leadership team and the existing culture of the organization. The commitment of the Lucet leadership team, in particular President & CEO Shana Hoffman, was a clear advantage from the outset. Shana and her team have a universal belief that culture change was necessary and that it needed to be deep, inclusive and genuinely transformative. Those were three critical components of success. Deep because a superficial effort would not garner the behavioral changes needed. Inclusive because this couldn’t be a top-down mandate but rather an ongoing iterative process in which the voices of employees at the frontline and in the back office were constantly being incorporated into the process and the decisions being made. Transformative because there was an acknowledgement that the current culture, for all its strengths, was not the type of agile, start-up mentality needed to sustain the new organization moving forward.

For anyone working in this space, you know this isn’t simple or quick. For example, as New Directions was merging with Tridiuum (the technology accelerant of the company’s transformation), we facilitated a session with leaders from both respective teams. Not surprisingly, cohesion within this group wasn’t immediate because they all came from different backgrounds, cultures and had varying histories of how decisions were made.

One key learning – particularly when working with newly merged teams – is striking a fine balance between being directive and being collaborative. If you’re too directive, you run the risk of marginalizing colleagues, assuming everybody’s aligned and fostering resentment. But if you’re too collaborative, you can find yourself endlessly swirling and struggling to move initiatives forward. Finding that balance is crucial human element that requires time, commitment and expertise of knowing when one approach ends and the other approach should become the norm.

Our role was to help them find a common and compelling narrative that would galvanize the organization and create a clear roadmap for the future. At Gagen, we call that The Three Things that Change Everything™. We did a lot of work around those three things but, as we see time and time again, it fundamentally begins with how committed the leadership team is to set the future direction in clear and unambiguous terms – and then actively and visibly start modeling those new actions and behaviors.

HB: You mentioned inclusivity earlier as a component of success. Can you expand on that?

GV: Absolutely. We know that culture is a shared experience across an organization and how it is felt in different corners of an organization can accelerate or impede any strategy an executive team creates. Developing the strategy is one thing. Executing it successfully is another thing entirely. And, it’s in the execution that the strengths or challenges of a culture typically appear. With the Lucet executives having articulated the need to have a more start-up mentality across the organization, getting to grips with the human component was more important than ever.

Fortunately, the Lucet team continued to recognize how important the culture element was. As I mentioned, when we began this work, the preference was to look to process and system re-engineering as the path forward. Through a series of planned activities, we were able to highlight the critical human element (the culture) and find explicit and actionable ways to start refining the current culture to create an environment in which the “new” culture could begin to grow and be nurtured.

Our approach was deeply informed by another key tenet of Gagen’s worldview. We believe, and our numerous engagements have borne this out, that there are Six Levers that an organization has to reinforce or refine the environment or culture they have. Those levers are deeply interwoven and symbiotic and, as any reader of this piece will know from their own experience, the significance of each lever is unique to every organization.

Six Levers that Shape the Employee Experience

Key to determining how, and where, the Lucet culture needed to move required understanding how the Six Levers were showing up across the organization. By leveraging this proprietary diagnostic tool across Lucet, Gagen was able to create a richly insightful and informative map of the current culture and was then able to begin exercising these levers to enable the change that was required.

HB: Fascinating. Can you tell me more about the diagnostic as a means of informing this culture transformation?

GV: Again, I must credit the Lucet leaders and their commitment to this work. We all know, though seldom acknowledge, that culture is experienced in very different ways across an organization. There is never one uniform culture, and a myriad of micro-dimensions can have a significant impact on your experience of a culture. Your direct boss, your tenure, the business unit you’re in, how that unit is perceived and funded, your title, your own lived experience and your perceptions (not always accurate) of how decisions get made. Now multiply that by all the individuals across your organization and you can understand why we always refer to our engagements as tackling the human struggle of change.

The diagnostic highlighted several opportunities, but perhaps the most illuminating for the Executive Leadership team was around the Lever we call “Energy.” It showed a deep level of change fatigue across the enterprise and, when coupled with other levers highlighting that comprehension of the business strategy was low, was creating an environment where employee commitment and adaptability were sluggish. This dimension of “Energy” would not have been uncovered without the diagnostic, but once it surfaced, we could see the Lucet team nodding along, because it affirmed some of their own personal experiences with the change. In fact, the Energy dimension was deemed so important that it’s actually been written into the business objectives for Lucet for 2023-2024.

It also became a springboard for a series of iterative engagements with employees in which their opinions and inputs were explicitly sought. We needed to gauge their opinions on just how ready, capable and competent the organization was to make the leaps the business strategy would require. Their candid feedback was a vital contribution because it enabled the organization to be more honest about where more work was required, but also acknowledge where they had more momentum and strength than they may have thought. This iterative approach served to reinforce one of the most important, and often most overlooked, mechanisms in any transformation which is the multiplier effect of adoption.

In very simple terms, the success of many change initiatives comes down to a basic mathematical equation: Change results and outcomes = quality of the solution developed x the acceptance of and adoption by the people impacted. Many of the world’s smartest organizations bake this into their efforts.

But, time and again, most organizations focus energy, efforts and resources against the solution quality and ignore or neglect the acceptance and adoption piece. And as we learned in grammar school, the lower the number you’re multiplying by, the lower your final answer will be.

I recognize it’s a very reductive way of looking at the dimensions of change, but we find it incredibly useful as a stark reminder that even the most elegantly designed solutions achieve little if they’re not accepted or adopted by the humans.

HB: I love that equation and it absolutely rings true. Can you give an update on where this culture transformation sits today and, most importantly, what business outcomes Lucet is achieving?

GV: Well, the biggest piece of news is that the newly rebranded Lucet officially launched into the market in January 2023. This was an enormous milestone for Shana and her team. The work that we’ve been talking about is very much embedded in the fabric of this new organization, and Shana has shared several times that everyone is very much ‘docking into’ how the organization is evolving.

For example, the new set of organizational values and their associated behaviors were significantly informed and validated by the iterative process we discussed earlier. I’m proud to say that the explicit inclusion of a corporate goal around energy/change fatigue is another part of this transformation too. Finally, in credit to the commitment of Lucet leaders, there is a significant focus on leadership visibility and accountability for the new Lucet culture and how that comes to life. We talk often about how critical it is for leaders in particular to model the desired behaviors of the new organization. I’m delighted to say they’ve taken the challenge to heart and have built that into their leadership practices already.

Of course, the business impacts of these initiatives will take time to come to fruition, but I’m very confident that the Lucet team will achieve the lofty goals they’ve set for themselves. As exemplars of “The Three Things” model we advocate so strongly, they definitely have done the hard work to get the culture building blocks in place.

Lucet CEO Shana Hoffman and Greg will be discussing the Lucet story at The Conference Board event “Change, Transformation & Organization Design” in New York on May 18th. More Conference details can be found here.
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