The Creative Challenge of Changing Culture at IBM

Excerpted from the book: Idea Stormers, How to Lead and Inspire Creative Breakthroughs (Wiley Jossey-Bass) by Bryan Mattimore

Facilitating Genuine Employee Involvement at IBM

There is no tougher organizational challenge than changing a culture. Just ask any CEO or company president. Even the most powerful executive can feel surprisingly powerless when it comes to changing a well-entrenched corporate culture.

Nevertheless, my coworkers and I are occasionally called on to design and facilitate events to either launch a culture change initiative or help operationalize an initiative that is already underway. For the facilitating leader tasked with creating organization-wide change, the following example might provide some inspiration and encouragement as you travel down the challenging culture change road. As you’ll see, the key insight or guiding principle in all the culture change work we do is this: involve those who are being asked to change to be a creative partner in the process of creating their own futures.

How IBM improves Supply Chain Efficiency

To increase the responsiveness, flexibility, efficiency, and effectiveness of its supply chain, IBM made the difficult decision to abandon its siloed approach to supply chain management, where each division oversaw the production and delivery of its own products and services. In its place, it sought to create an integrated supply chain that cut across all the product divisions. The result of this daring reorganization, initiated by IBM’s then CEO, Sam Palmisano, was that literally overnight, an IBM division, dubbed the Integrated Supply Chain (ISC) with $40 billion in annual spending with suppliers and nineteen thousand people, from clerks to senior managers, to Ph.D. logistics experts, was formed in 2003. The immediate cultural challenge was how to move people out of their siloed thinking and identification with their previous IBM division and adopt a shared vision for the new cross company ISC division.

It was only after mixed success with traditional culture change initiatives within IBM’s supply chain group that we got the call from Tara Sexton, vice president of communications for the Integrated Supply Chain Division, saying that the team had decided it needed a more radical and creative approach. The challenge presented to us was, “Could we invent a program or approach that would help all of ISC’s nineteen thousand employees achieve both a better understanding and, more important, a greater commitment to delivering on ISC’s vision and its four strategic pillars?” As we later reframed and redefined the creative challenge, it became, “Could we help all their employees creatively operationalize ISC’s new four-pillar strategy in their day-to-day jobs?”

Of course, this was a wonderful wish, but how could we possibly make this wish a reality, especially given the daunting numbers of employees? The solution my partner, Gary Fraser, our lead client, Tara, and I eventually came up with, after many joint creative strategy sessions, was to create a community of cross-functional evangelists to explain and, more important, facilitate every employee, directly or with the help of their coworkers, in a creative process to reinvent and redefine their roles and responsibilities within the new division.

After we did the math, the tactics of reaching everyone in the company were not that daunting. We built a train-the-trainer, trickle-down, creativity-training pyramid. At the top of the pyramid were our twenty five creative evangelists. Each of them was responsible for conducting three or four four-hour workshops, with twenty-five to fifty senior managers and leaders in each workshop in various IBM locations around the world. In total, our twenty-five creative evangelists were able to personally train ISC’s top twenty-two hundred senior leaders and managers.

How IBM engaged the >2000 leaders around the organization

Each of these twenty-two hundred leaders and senior managers in turn was tasked with conducting a two-hour workshop with his or her direct reports and coworkers. Ultimately, this meant that all of ISC’s nineteen thousand employees took part in our four-hour or two-hour creative training workshop.

So why did IBM’s supply chain leadership agree to this approach to launch its strategy rollout program, especially since it required such a significant commitment in terms of both employee time and company resources to implement? The key insight and driving principle behind Growth Engine’s recommended approach was that to truly win the hearts and minds of all the employees at ISC, all employees should have the opportunity to reinvent, reimagine, and revision their jobs within the context of the new ISC vision and its strategic platforms. Gary, Tara, and I knew from IBM’s internal pulse surveys that this was the missing ingredient in the culture change initiative. It wasn’t that the employees weren’t necessarily willing to change. It’s just that they didn’t know specifically how they were expected to change. The three of us felt strongly that it would be only after they had done this reinventing and reframing of their own jobs, and what they did on daily basis, that they would be sufficiently equipped to both commit and make significant strategic contributions to the future success of the division.

Our proposed approach was somewhat of a culture shock for IBM’s supply chain division, as it would be for any other well-run hierarchical, top-down, command-and-control organization. As Tara wrote to me in an e-mail,

“It was a bold step to even present this idea to the executive leadership team. Some of them would have been happy just to say we were going to make a set of charts and send them out to managers to take employees through. And hard as I tried to avoid this perception, some thought I was suggesting these workshops would be to get people’s opinion on the strategy. Finally, at the end of the meeting they realized, no, this is (as you said) to help create an environment that would allow us to execute the strategy!”

We knew that the success of our proposed approach would be contingent on getting the right creative evangelists. These were the ideal criteria we set for these leaders:
• Comfortable leading large teams and speaking in public
• Previously identified as a high-potential, top talent manager
• Willingness and ability to commit ten days over a six-week period
• Geographically diverse group of facilitators for worldwide coverage
• Experience or expertise in more than one ISC functional area
• Conversant in ISC fundamentals, terminology, and strategy
• A willingness to team with local senior business managers to deliver workshops.

Once we had identified these creative evangelists, we brought them to IBM’s headquarters in Somers, New York, for a two and a half-day train-the-trainer program. Our agenda included speeches by ISC’s senior leaders to inspire our evangelists and help them understand how critically important their role would be in helping to build ISC’s culture. Even more critical was teaching them how to facilitate their coworkers in reframing and rethinking their jobs within the context of ISC’s strategic priorities. Because we knew that whatever we had the creative evangelists facilitate in their four-hour session would also have to be repeated in a simpler and shorter two-hour session for all the remaining ISC employees, we tried to keep our process simple. Ultimately, we decided on a straightforward three-step process: envisioning the ISC future, barriers to this new future state, and cross-functional problem solving.

As workshop participants began envisioning the ISC future, we said to them, “Given the four strategic imperatives, imagine what ISC’s ideal future might look like.” And then to begin the process of helping each employee personalize this vision, we asked “How would your world be different based on this new, ideal way of looking at the ISC?’

Next, we had the workshop participants work in table teams to identify some of the barriers to achieving this future state. And finally, we asked them to generate some cross-functional initiatives to overcome these barriers. Table teams were asked to be specific about these topics:
• How the functional groups could work better together to solve problems more efficiently.
• How they as a team would get buy-in for their ideas.
• What each member of the team could do to start to make this work.

So what did IBM achieve?

By every measure, this culture change and culture creation initiative was a huge success. Internal employee satisfaction measures (IBM’s pulse survey) improved dramatically. Within two years, ISC achieved its cost-cutting, efficiency, time-to-market, and flexibility goals. And for the first time ever, more people wanted to work in supply chain than leave it because they could see how their day-to-day work translated to quarterly business results. The best indicator, though, was probably where people sat in meetings. At the beginning of the integration initiative, ISC’s three hundred top managers sat with those from their own silo. At the end, they were sitting in cross functional, process-oriented groups.

A great deal of credit for this outcome has to be given to both Tara Sexton and the supply chain division’s senior management. For a company that specializes in technological solutions, to be willing to look beyond a technological fix (Webcasts, e-mails, video blogs, and so on) and commit to the time and expense of a very humanistic, person-to-person approach is impressive indeed.

This story also demonstrates the impact that involving employees in a way that encourages their creative contributions, especially when it affects them directly, can have on improving performance. Finally, it also highlights how critical it is to have dedicated and innovative facilitating leaders like Tara Sexton at a company, large or small.