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Brendler Associates

The first lesson in aligning an organization is to enroll a critical mass of employees behind thewidespread change.

The promised payoffs are high. Many companies have made large investment in information technology only to see the promised payoffs disappear into a black hole of organizational conflict.

What’s missing? Organizational alignment – the ability to link people practices to business performance. It is a fact: Aligned organizations outperform their competitors by every major financial measure. It is the way you operate with your existing customers that has the most effect upon your ability to improve loyalty. The following case study illustrates the challenge.

A Real Case

When the new CEO was hired, he announced that the functional silos were coming down and everyone would work on teams focused on resolving serious customer problems because the company was losing customers at an alarming rate.

On the CEO’s arrival, I was asked to help him and his direct reports find out why the company was losing customers and why they were having so many problems implementing the new CRM technology. I spoke with one of his direct reports who summed up the mindset of the top management group well when he said, “Some organizations like to embrace change to maintain market leadership, and others, like us, resist change until their customers drag them into it.”

Lost In A Tangle Of Blame, Resentment and Resistance

It became very obvious to me that the new CRM technology was not working. They were losing customers for the same reasons their CRM technology wasn’t working. As I began to interview people in the organization – the culture was clearly the roadblock. The salespeople were complaining that few knew how to use the new CRM system. The customer service people felt it wasn’t doing what they were told it would do by the vendor. Many were continually running to the IT group for help. A number of meetings ensued between the IT professionals, the vendor, and the management to discuss misunderstandings. The management thought that buying the new CRM technology would solve many of their customer problems.

As they began to implement the new CRM technology, everyone was annoyed with everyone else. The CRM solution got lost in a tangle of blame, resentment and resistance. One customer service professional said, “It is not hard to see why we are losing customers.”

In one example, the company was having customer problems due to poor cooperation between the customer service and the logistics departments. Both departments reported through senior management in another city and had little direct communication between the two groups. They thought they could mediate the relationship electronically but quickly found that “there are no technical solutions for people problems.” They learned that technology couldn’t compensate for the lack of people interaction and participation when that interaction is needed for the success of a new technology.

What happened was mostly a people problem. The customer service people hadn’t been brought into the initial CRM project development phase and had to deal with the new system that was dropped in their laps. The technical people were given the technology and told to make it work, without any established strategy for resolving issues that might arise. The salespeople were told to figure out how to use it quickly to save customers they hadn’t lost yet. The top management team saw the CRM technology as another IT project that should be managed by the IT department.

‘I Never Realized The Extent Of The Change We Have To Make’

When I talked to the management team, they were very frustrated about the amount of resistance they encountered. They did not think that adopting a new CRM technology would require them to ask their employees to change. One top manager said, “I never realized the extent of the change we have to make.” Another remarked, “People are strongly resisting because they have no way of knowing if they’d like the new way better than the old or if their status would remain the same. They think they’re going to lose their comfortable work systems.”

What they all found out late into the implementation was that not only did they have to deal with significant elements of the change process – they also had to shift their understanding of what their work would be. The changes now required that they had to work across functional silos to successfully implement the new CRM technology. Even though the CEO said the silos were coming down, there was much resistance and it caused a great deal of difficulty communicating with other departments. A sales professional summed up the challenge, “How do they expect us to deal with this mess when the management team doesn’t know how to resolve conflicts? The whole company lacks a common method to work together to reform our customer problems.”

The new CEO realized that he had to align the culture and the strategic direction if he was going to change customer defections. He believed he had limited time to accomplish this feat. As a new approach, he turned to a series of workshops that focus on aligning the organization in real time rather than in 12 to 24 months.

The workshops were short, intense collective efforts to telescope time frames and promote new behaviors – necessary for the company to solve their customer retention problems. For instance, the first workshop was charged with reversing the erosion of market share by changing the culture. The second workshop was charged with improving customer retention. But instead of two years to analyze the plan, the new CEO gave the workshop groups 60 days to produce results.

Composed of cross-functional and multilevel participants reflecting the stakeholders groups that would implement the solutions, the workshops were headed by informal leaders. Facilitators helped clarify the workshops charge to break through ingrained mindsets and assumptions that would hinder change. No one had the answer – the workshop groups were told they must generate it.

The CEO said, “For our people to thrive in this workshop environment, we must first give them a chance to air their concerns and get their input regarding what needs to change. Our people need to be encouraged to discuss their personal issues, fears, annoyances, and hopes, such as:

• How will my job change?
• Will we work together in teams?
• How will the teams be formed?
• What will my job be once the new CRM process is a part of our daily work system?
• How will I address issues about my job if I’m uncomfortable with the new changes?
• What if we have problems working together – how do we resolve them?

The main objective of a leadership team is to incorporate people’s personal issues with their professional issues into a dialogue about improving our customer problems. The workshops fostered a team environment that diffused dysfunctional conflict and created a cross-functional environment that could be transferred to their real organization.

Everyone has heard the old truth about human nature. People are more likely to cooperate with a plan they help to develop. For this organization to succeed, they needed to learn how to change. They needed to experience real collaboration. The workshops fostered a team environment that diffused dysfunctional conflict and created a cross-functional environment that could be transferred to their real organization. This process enabled a large group to develop a set of strategies that they would themselves implement. It is a fact that an organization that effectively collaborates is aligned.

Participants needed coaching to get through the eye of this emotional needle and gain the confidence to pursue bold and original ideas. The first workshop began to build strength by gathering a base of facts that strengthened cohesion. Regular debriefings fostered a daily mixture of hardships and insights. Developing an initial team point of view was the jumping- off point for action. It is a fact – the faster the participant’s get into action, the faster they learn.

While the CEO saw these workshops as a “safe haven” for participants, in the beginning, it was a pretty uncomfortable place to be. They usually felt they were walking on a tightrope between results that were too timid or overly bold. This group followed the same pattern as other workshop groups did – nine times out of 10 the workshop participants take the courageous route.

They suddenly hit on an idea. They proposed acting out a strategy in cooperation with two of their best customers and inviting senior management to take part. The workshop group spent an exhausting and exhilarating week packaging its menu for services, notifying parties of the offering, and setting up a simulated facility, complete with business services and refreshments. Senior managers were kept in the loop and were invited to see the idea put to the test. On the appointed day, the group sold double the normal amount of services and products at premium prices.

Once the customers had tasted their VIP service, they wanted more, prompting the company to roll out the services to their most profitable customers. This now contributes 10 times more to the total net income – and the delivery team is known for its innovation and responsiveness.

The final result came last year where they had a net gain of customers. They finally got the CRM technology running only to find out it wasn’t what they needed to improve customer loyalty. The CEO said to the group, “What else is possible if we put this kind of effort into everything we do?”

From this experience, both the workshop participants and senior management learned a crucial lesson: Enrolling a critical mass of employees behind the widespread change is the first lesson in aligning an organization. Each took full responsibility for changing the culture by grounding its work in the reality of action.

Increasingly, corporate leaders are realizing they need something that will help them create breakthroughs, not just in the current ways of doing business, but also in rethinking what their businesses could become. That is, companies that want to internalize the disciplines of the workshops will become not simply more successful but more capable to respond to new opportunities. The workshops proved to be an essential means of breaking the gridlock that prevents organization alignment and significant business results.