When Tom O'Dea took over the customer relationship management systems at Sprint Corp., things were rough. Calling with questions or complaints about bills, customers were often either kept on hold for too long, or they had their calls ended without their problems being solved. The company issued major software releases designed to fix these issues, but they were an embarrassment: They were typically released late and also commonly crashed. Meanwhile, customers kept complaining vociferously and defecting to competitors. O'Dea's department's credibility was at an all-time low. And all the while, corporate kept announcing regular, morale-lowering downsizings.
O'Dea, rallying his 700 troops, acknowledged the organization's massive problems. He then committed to two things: one, candid dialogue about anything that was preventing improvement; and two, holding the senior team accountable to change.
Within a year, things improved remarkably. Release quality was up more than 50% and almost every release went out on time. Costs were reduced by nearly 30%." And most amazingly, while downsizing continued, morale jumped significantly.
How did O'Dea accomplish this? Certainly his experience is not the norm. So often, companies lose billions of dollars betting large parts of their organizations' budgets on ventures that have less of a chance of paying out than a roulette wheel. In fact, Joseph Grenny cofounder of VitalSmarts LC, a corporate training company, David Maxfield, VitalSmart's research director, and Andrew Shimberg, president of advisory services for BSG Concours Group, have done research that shows that collectively, companies fail to execute product releases, Information technology projects, organizational restructurings or downsizings some 66% to 91% of the time.
These researchers also discovered that with surprising reliability people can predict which projects will fail, but that -- overall -- they tend to avoid precisely the conversations that would illuminate the projects' problems. For instance: Are our plans within budget? Can we meet our deadlines? Do we have the resources we need? Do we have enough corporate support to complete our project? Have we assessed the project's risks? Are all the team members pulling their weight?
When people converse about these issues, their chances of success improve remarkably. But speaking up or challenging others won't happen by accident.
Take O'Dea. He published a dashboard that tracked projects' timeliness, costs and quality. In addition, he had senior managers commit to improve how they executed projects and to tie half their incentive pay to achieving those goals.
But -- crucially -- O'Dea went further. Since he was betting that the quality of dialogue about issues would affect managers' ability to improve, he measured behavioral change as well. O'Dea and his colleagues used a brief survey to track how frequently people raised and resolved certain "crucial" conversations. This data was captured once every four months. Typically, leaders track behavioral or attitudinal data only yearly -- if that often. O'Dea reasoned that, in order to sustain leadership's attention, it needed to be done more frequently.
Also, to make it easier for project managers to raise issues, O'Dea delegated his technical leadership and focused instead on enabling others' successes. For instance, he sat in on release reviews, not to review technical decisions, but to encourage and facilitate conversations. O'Dea and his senior team also tried to make sure that people were comfortable speaking honestly, even to those higher in the company.
Here's the type of thing he was trying to avoid: Previously, one of their new releases -- one O'Dea had been assured would succeed -- was flawed with dozens of glitches that shut down their system. Front-line software engineers had predicted right up to the release date that the project was doomed. Unfortunately, this information was filtered on its way five levels up the chain of command.
O'Dea never wanted that to happen again. Not only did he capitalize on the disaster to draw greater attention to its costs, but he also started holding sessions in which influential and respected people -- those who had their fingers on the pulse of the systems and organization -- were invited periodically to speak freely with senior leaders. The result? Greater success all around, a much more rapid response to issues and a far more realistic understanding of decisions.
For more information on this topic is available at http://sloanreview.mit.edu/smr/issue/2007/summer/14/