Gerry Imhoff, CIO and Senior VP of IT Services at Maritz shares part 3 of his team’s transformation from an internally-focused, captive IT shared service to a trusted business partner.
If you’re just tuning in, here are quick links to Gerry’s first two installations in this series: We have to do WHAT? and Finding the OFF switch. Gerry’s story about embracing technology business management (TBM), including his realization about what it takes for his team to deliver amazing customer experiences, continues here.
Organizations are faced with years-old, if not decades-old, challenges that simply can’t be swept under the rug any longer.
Why? An example is playing out before our very eyes. It may seem to have come out of nowhere, but Amazon’s acquisition of Whole Foods has been years in the making. Even before the deal was approved, the damage had been done. In a matter of hours following the announcement, Wal-Mart, Costco, Target, SuperValu and Kroger lost a combined $27 billion in market cap. SuperValu alone fell 20% that day, and hasn’t recovered since.
Your competition is out there, preparing to make you irrelevant. I’m not only referring to your company; individual departments can become irrelevant, too. What tangible actions are you taking to address the things that hinder innovation in your organization? You know the types of challenges I’m referring to. The big, hairy ones that leader after leader knows are there but chooses to defer to a future date because they’re hard—digging a deeper hole and possibly even sealing the organization’s fate.
Yes, change is hard. But waiting for someone else to figure it out, or fooling yourself into thinking tweaks, trimming around the edges, and “start, stop, continue” exercises will bring about necessary transformation isn’t cutting it and you know it. I know it. I was that “defer” leader who finally realized, mostly out of fear of everyone quitting because no one was happy, the most likely scenario was our customer quitting us.
The reality is this: innovation is fueled by culture. If we’re going to beat back the competition, we have to make those hard decisions. Now.
Job 1: your management team
If you’ve been following this story, you know that our first plan to transform our culture involved the proverbial boiling of the ocean. It was all over the place, with consultants, posters, training sessions, carrot & stick incentives, process revamps, contests, catch phrases, town hall meetings, and dozens of other parallel activities.
While most of those actions contributed in some manner to our ultimate shift, I implore you to learn from my mistake. It took way too long to realize that Job 1, without exception, is to transform the management team.
Culture is an area where you can easily fool yourself into thinking your management team “gets it,” and is therefore capable of leading the change you need. Their intentions may be completely sincere and their verbal expression of the culture you’re seeking may be perfect, but action and results are what matters.
One of the most powerful mindset changes for me, the managers, and individual contributors on my team was to stop thinking of our organization (or ourselves) as the victim. It’s very easy to blame others for your challenges:
- “Our customer just doesn’t understand how hard it is to keep all these plates spinning.”
- “Sales keeps selling things we can’t deliver.”
- “How are we supposed to change the tires on the plane when it’s already hurtling down the runway?”
- “There’s no way that can be done without downtime unless we spend big bucks.”
- [Insert your favorite whine here].
Our change in mindset wasn’t instantaneous, but today, the starting point is not focused on what others could be doing differently. It’s on what WE can do differently.
- “Wow, that process we put in place really does suck. I can see why our customers don’t like it.”
- “My experience as a consumer is WAY better than our customer’s experience as our consumer. We need to figure out how to remove that friction.”
- “I noticed the customer’s body language changed when I made that statement. I will say that differently next time to make the experience better.”
When that mindset becomes the norm, positive change snowballs and customers notice. A lot.
The leaders your organization needs
Within Maritz IT Services, I can tell a manager is firing on all cylinders when one particular characteristic is observed: the team they lead creates amazing experiences—for everyone. This isn’t documented at Maritz; it’s my gut summary after several years of seeing the results great leaders create. These leaders and their teams are able to:
- establish great relationships
- communicate beyond expectations
- proactively provide options
- remove friction from services and interactions
- deliver the occasional sub-par experience and have the customer respond “how can we help?” rather than “you guys suck”
- embody the critical blend of empowerment and accountability
- give and receive omni-directional, outcome-focused feedback
That last one is a key ingredient to our success. By omni-directional, outcome-focused feedback, I mean that we’ve gotten better and better at understanding feedback needs to focus not upon whether or not a task was successfully completed; rather, upon these four things:
- the behavior you exhibited when performing the task
- the perception that a particular behavior creates
- the importance of owning that perception even if you don’t agree
- the approach or behavior adjustment you will employ to create a better perception going forward
It’s also vitally important for all managers and non-managers alike to have the courage to provide timely feedback to ANYONE regarding improvement opportunities, whether manager, employee, peer, or someone in another group. A rising tide lifts all boats.
You picked your managers for the wrong reasons
Notice what I left out of the above description of a leader’s characteristics? Nowhere did I say a manager gets involved in the technical aspects of the employee’s job.
When we started this journey, 100% of our managers were promoted to management because they were the best technical people in their group. It’s tough to get someone with that background out of the weeds. For technical people, dealing with the technology is fun.
Learning to talk to your former peers about behavior and perception is tough, especially initially. Because most people have never been coached about the perception their behavior creates, they tend to get angry, deny, make excuses, or have other reactions that don’t equate to ownership.
To be effective, we had to stay true to our expectation of omni-directional feedback and reinforce, with complete sincerity, the sole purpose of that feedback: to enable professional and personal growth.
Using a sports analogy, which team gets better? One whose players think they have nothing to learn and patronize the coach’s attempts to point out improvement opportunities? Or one whose players internalize feedback on their performance and figure out how to improve? You know the answer.
Jerks and big egos are diseases that prevent the development of a healthy, winning culture. They have to be cured or cut out. Everyone knows the symptoms. Eye rolling and meeting avoidance are key indicators. If 10 people have a problem with someone’s behavior, it’s unlikely all 10 are wrong. I’m sure you can justify their ongoing presence because of their institutional knowledge or because they represent a single point of failure, but I promise you, they are a significant net negative.
By allowing jerks to exist, your culture is nothing more than a poster on the wall. Are you going to be the leader who finally addresses your organization’s big challenges? Nah, just “defer.” I’m sure status quo with some trimming around the edges will keep your Amazon-like competitor at bay.
How being accountable went from scary to awesome
The Machine, as defined in Finding the OFF switch, looms large in every organization. The Machine at Maritz conditioned people to be risk-averse and perpetuate a “good news only” culture. Being accountable? That was akin to saying the name of He Who Must Not Be Named out loud. (Voldemort. Sorry Harry Potter fans.)
Being held accountable was just not in our nature, and even when someone dared speak of it, there was always a punitive connotation related to something gone wrong. “Someone should be held accountable!”
So, when we first introduced the notion of accountability as part of our culture transformation, people naturally bristled. “Oh crap, you mean I’m going to be held accountable?” The assumption was that you were going to get in trouble for something you did wrong. My, how we misunderstood the power and value of feedback!
Intentionally exaggerated before and after scenarios of the empowerment/ accountability relationship
Scenario 1: Manager approaches, possibly with arms crossed: “I need you to do X, priority 1.” Congratulates self on “empowering” Employee to do the task by him or herself. The word “accountability” is not spoken (re: Voldemort).
Since Manager isn’t known for creativity or communication skills and is overly-focused on standards, Employee thinks, “I’ll just stay within my box and not make waves. Hopefully I won’t do something to irritate the customer and get myself in trouble, but if so, I’ve got a list of excuses a mile long I can use.”
Scenario 2: Employee observes something that could be improved and doesn’t feel the need to ask permission because they’ve been encouraged and coached to use good judgement (empowered). Discusses options with impacted parties (NOT with the manager). Chooses best option and goes for it.
If successful, Employee receives kudos and is self-motivated to repeat. If unsuccessful, Employee proactively informs Manager, who asks probing questions to lead Employee to self-conclude improvements that have a higher likelihood of success in the future.
I’m not trying to be Pollyanna-ish. Of course, there are steps where the employee above is coached differently if their judgement is poor or there are other negative tangents.
But sometimes, after more than adequate coaching, you have to make a tough decision as to whether additional coaching will result in the necessary progress or if more direct conversation regarding their future is necessary. Only you can define “more than adequate.” Over time, I’ve learned that the tighter you define “adequate,” the faster your organization improves.
Fifty percent of my organization has been at Maritz less than 3 years, and bringing in those new people (whom we painstakingly interview to ensure they are culturally compatible) has paid amazing dividends.
One of my favorite moments now is when an employee approaches seeking permission for something. I love asking, 'What do you think we should do?', listening to their response, and replying 'I trust you, go for it.' If there’s a mischievous grin on my face, it’s because the employee has inevitably learned there’s no need to ask permission next time. Gerry Imhoff, CIO, Maritz
It’s taken 3 years to develop an organization where the scenario above is a regular occurrence, but it’s a simple formula. And honestly? This is the only way you can create a culture that transforms barely-tolerant customers into outspoken fans.
Examples of ridiculous stuff to stop doing
Looking back as the leader of my organization, I allowed some ridiculous stuff to happen. (Remember our stupid 2/4/6/8-button phone charges? See the chapter titled “TBM before TBM was a thing” in this We have to do WHAT? post) Here’s another one that had the exact opposite of the intended effect. Today, 99% of our service fees (chargebacks) to our customers are FIXED (re-calculated annually based on the then-current total cost divided by consumption). Until last year, we still had one particular set of variable charges that I’d (lightly) question each year. Every year, I got talked into allowing them to remain.
Essentially, when this particular service was requested, it required a 15 minute system administration task to fulfill. According to the manager, if we did not impose a small charge (literally $5) for each transaction, customer demand for those transactions would skyrocket, service levels would suffer, and we’d have to increase staff. Expecting the other party, within the same company, to be reasonable? Completely irrational.
A new manager brought new thinking to the equation. His approach was—get this —to eliminate the charge and actually talk with the customer to ensure they understood the situation and the concern. Should demand increase after the charge was eliminated—again, this is crazy talk—we’d sit down with the customer again and discuss as partners.
We’re six months into that change, and despite not charging for those transactions, demand has not increased one iota. In fact, after eliminating the charge, the person who used to spend 75% of their time tracking and billing those transactions immediately had 75% free capacity.
Challenging people to think differently and not remaining comfortable because “that’s the way it’s always been” has resulted in dozens of similar opportunities over the past few years— all of which have given us options to improve existing service levels, add new services, or reduce expenses. We’ve done all three in our ongoing journey to improve the experience for our customers.
Another example of a far-from-brilliant decision I made was setting the expectation that “100% of a manager’s job is people management—0% technical or functional activity.” When managers questioned the feasibility of 100%, my brilliance was apparent. “OK, then it’s at least 50% of the time…no, wait, it has to be at least 51% to demonstrate we mean a majority of their time.” Then it was pointed out that some of our managers had 15 direct reports and others had 2. So, I added that it was OK for a manager to do non-manager things once they had adequately coached all their people that day.
I was treating people like they were 6 year olds who needed to put a line of tape down the middle of the bedroom to establish boundaries. How about expecting people to apply adult-appropriate common sense and holding them accountable for outcomes, instead of tactics?
These are the things you do when you’re serious about changing your culture. It doesn’t matter how many bad decisions you’ve made in the past. Just stop deferring and start tackling the hard ones from this point forward.
Why a bar may be the best place for your next meeting
The simple fact is, managers (and all employees) need to be all in. You’re not going to measure that in words. The only measure that matters is results. If a team is not exhibiting the “amazing experience” characteristics I described above, their manager is not spending enough time coaching them and holding them accountable for changing behaviors that improve perception. Period. And sorry to be the bad guy, but if that manager or person reports to you, YOU are not coaching them enough and not holding them accountable.
This might seem silly, but one thing we did was take some of our meetings out of the office. The idea was to have the leadership team meet one next-level-down manager in a casual setting—in this case, a bar. Inevitably, they’d show up all nervous, like it was an interview. We’d walk through a series of discussion points, seeking to understand their point of view and sharing what we were trying to accomplish.
This worked pretty well until we got fancy in an attempt to accelerate progress. We expanded to multiple managers at a time, which pretty much turned the bar meeting into happy hour, since it’s tough for 10 people to have a single conversation in that setting.
But the point is this: the way we gelled as a team was by spending time together in a casual environment that promoted the generation of new ideas and open discussion. We were teaching ourselves how to give and receive (and own) feedback, so that we could expand that behavior to the entire team.
Cultural empowerment + Apptio visibility = an awesome combination
The year following our 4-year, 35% cost reduction journey, Maritz had a business requirement surface that resulted in a $2 million hit to the IT organization’s budget. So much for our track record of reducing expenses 16 out of 17 years, right? Not so fast!
The visibility into IT costs provided through Apptio, coupled with the skills our team developed due to our culture focus, enabled us to reduce expenses in other areas, such that our year-over-year budget remained flat.
We’ve gotten good at this stuff. It’s now second nature for our empowered and accountable team to come up with better ways to do things without being asked. Could I have simply sought and received approval to spend the incremental $2 million and not offset it? In a New York minute. This expense was a totally legitimate and universally-required business imperative, and in fact, I did receive approval to go over budget to address it.
But how cool is it to have your organization, without being tasked to save, be recognized for not only successfully delivering that critical $2 million requirement, but completely funding it via savings in other areas while maintaining or improving the associated service levels? (Pretty damn cool.)
Practicing TBM and exploiting Apptio, our managers now have real, consumable, actionable visibility into the cost and consumption of the services they deliver. “Why is this business unit able to run their platform with 70% of the servers and storage used by this other business unit, when the platforms are similar?” Try getting that insight out of spreadsheets or enterprise financial systems.
It’s a game-changing conversation when you approach the second business unit with an opportunity to save 30% of their server and storage expense. Your relevance to their business skyrockets, and you help them keep their Amazon at bay.
Witnessing the transformation from barely-tolerated and largely-mandated internal shared service four years ago to an option-providing, customer-centric, communicative, friction-reducing, great experience generating, valued service provider has resulted in several of our CUSTOMERS reaching out to us, asking “How’d you do it? We need to change; can you help us transform as well?” Several of our managers have even been asked to help on-board new managers in our customer’s organizations.
That’s crazy. Crazy cool, and very humbling for a guy who was “this close” to deferring and continuing to take the trim-around-the-edges road. It’s been an amazing journey, and in many ways it feels like we’re just getting started.
So there you have it
Thanks for letting me share the Maritz IT Services story. It’s been a cathartic experience to relive our journey from a pretty tough place to where we are today. I’ve thoroughly enjoyed writing this series, and would like to sincerely thank those who’ve shared comments both electronically and in person. Your generous feedback motivated me to complete the series and satisfy my obsessive compulsion to deliver what I hope you found to be a quality end product.
Most importantly, I’ll close with the only thing that really matters: Thanks to the Maritz IT Services team for believing in the vision and opening yourself to owning self-improvement—you truly have control of your future.
To learn more about how leaders like Gerry are transforming IT services, register for the TBM Conference in November. Congratulations to the Maritz team, a 2017 TBM Council Awards finalist for IT services transformation!