Case Study: Data Drives Bottom-line Results

May 1, 2018

Case Study: Data Drives Bottom-line Results

Turning around a company that is struggling financially is a complicated process that requires the cooperation of finance, HR, operations, and other departments. KinderCare was able to harness that synergy to recover from 14 quarters of decline and launch into 23 quarters of growth. At the foundation of this corporate change was data.

In 2012, KinderCare was in dire need of a turnaround with many consecutive quarters of decline and rumors of bankruptcy. KinderCare operates about 1,350 locations nationwide serving about 170,000 families, so adjusting course would be no small task. With much in need of change, Tom Wyatt was brought on as CEO in 2012, and Wyatt’s first executive hire was Wei-Li Chong as Executive Vice President of People and Operations.

Chong had more than 20 years of experience in HR, beginning as a generalist and growing through years at retailers like Macy’s and Ann Taylor. He knew how to create good experiences with customers. He also knew the power of talent. At a retail company with stores selling the same product, how can one store become more successful? Chong found the answer was a high-performing team.

“I have always been a proponent of the power of talent,” said Chong. “High achievers deliver an outsized result to the bottom line.”

Asking Questions

Wyatt and Chong began to ask hard questions: How do we build a culture where people want to come to work? What makes a good teacher? How do we build relationships with parents? To find the answer to those questions, KinderCare partnered with Gallup to gather the data needed to solve those problems. Gallup began interviewing teachers—teachers who love to come to work, teachers that have an impact, teachers that were failing, and so on.

“Many companies use a top-down approach to action planning, but we do the opposite,” said Chong. “We conduct extensive research among our employees and families.”

Once Chong had that data, he was able to see clear distinctions in who succeeded and who failed as a teacher. This led to the development of a selection tool for centers to choose teacher applicants. Now the challenge was to get centers to use this new selection tool. With 1,400 centers and a culture that hadn’t changed in decades, Chong encountered strong push-back to this new technology.

To overcome this fear of change, he honed in on those who were curious, those centers that were more interested in the new tool than in holding on to old ideas. Using those pioneers, he was able to build buy-in. KinderCare brought center leaders together in conferences and allowed the peer influence to solidify the new best practices across the country.

Those best practices paid off. With this first in the industry tool, using recommended teachers resulted in concrete advantages for the children. A 2018 survey showed that children enrolled at KinderCare were four months ahead of kindergarten students nationally.

Building Engagement

Next was building engagement with families and parents. Using data from asking families what made certain centers special, Chong was able to bring science to this process. “When it feels great for both groups, it’s a positive result in almost any business measurement: revenue, safety, and so on,” said Chong.

KinderCare also invested in its employees, dedicating more than 100 million dollars in additional pay and benefits for teachers and employees. Chong listened to the employees, making decisions such as allowing employees to wear jeans to work and an employee discount program. These changes culminated in KinderCare winning a Gallup Great Workplace Award in 2017. KinderCare Education is the first in the early childhood education industry to be recognized by Gallup for this award, and one of only 37 companies in the world to receive the distinction.

A new teacher selection tool, increased engagement from families, and a rejuvenated corporate culture set KinderCare on a path of 23 quarters of consecutive growth. Chong was named Brand President to ensure that corporate decisions are filtered through the lens of “people.”

“There is a strong link between culture and business results,” said Chong. “This is the next frontier to take something soft like culture and apply science and analytics.” These business results have drawn interest from other companies about HR best practices and how to lead a brand with a people-first attitude.

“The conversation has moved past whether HR has a seat at the table,” said Chong. “It’s do you know what to do when you are there? How can you influence the executives and the business decisions?”

The Authors: 

Deborah Stadtler is Managing Editor + Communications Lead at HR People + Strategy.