On April Fool's Day in 1993, IBM stunned its employees, the tech community and the business world with the announcement that their new CEO was going to be Louis V. Gerstner, an industry outsider with not one day's worth of technology experience. And it wasn't a joke. Gerstner, though, did have impressive credentials. He was a McKinsey alum who led RJR Nabisco and American Express to impressive market and financial comebacks. Gerstner was a turn-around specialist, a term not frequently used much anymore. IBM was losing its place as a market leader, and careening dangerously close to insolvency. It posted an $8B loss that year. Oracle's Larry Ellison referred to IBM as "irrelevant." A plan was underway to break the company into pieces. Chaos. Despite being a non-techie, IBM's Board pursued Gerstner aggressively. Why? They wanted Gerstner to make the bold and brash decisions required to exact real change and tangible results. They also wanted a fresh perspective on resolving the challenges Big Blue was facing.
Upon taking over, Gerstner slammed the breaks on the plan to split up the company, deciding that an intact IBM was greater than the sum of its parts. There were massive layoffs to cut the fat (sound familiar?) So how did Gerstner eventually turn IBM around? How did he get buy-in? How did he make the elephant dance? Upon his assessment of IBM's issues, Gerstner found that IBM's culture was toxic-focused internally on the company and not enough on its customers. Divisions competed against each other rather than collaborating. He sought to take on the long established culture of managers that "presided" instead of taking action. Culture change became the backbone of Gerstner's plan to save IBM. “Culture isn’t just one aspect of the game,” he said. “It is the game. What does the culture reward and punish – individual achievement or team play, risk taking or consensus building?”
Fast forward to 2015. Why is Lou Gerstner important to today's C-Suite? Well for one, IBM is going through another shakeup. And in many ways, it is representative that the business climate today is evolving fast. Marketing and sales continue to struggle to work together to shepherd new prospects through a fragmented journey that stops and starts, changes players, requirements, and channels. Technology is taking the lead; the creatives are taking a back seat to the scientists. Social Selling is rapidly becoming more effective than traditional tactics. Customer Experience is bubbling up to the top of the charts of competitive differentiation. Sounds like a revolution.
Like Gerstner in 1993, today's leaders need to envision, create and nurture a new culture in order for their companies to flourish. A corporate facelift, if you will. The companies that get out ahead and lead in the social-digital-mobile economy will sail into shore, while those that cling to the past and present will find themselves tumbling around under water, clinging to life.
With this as the backdrop, here is a plan for driving culture change in your organization:
1. Cross-Functional Teams Redux: Create "Customer Experience Teams" consisting of marketing, sales, tech and customer service which work together on targeted segments of the business (i.e. industry, geography, solution). They are compensated most heavily on (1) customer sat (2) company success (3) team success. The customer is the center of the new universe. Customer satisfaction means more revenue and higher pay for the teams.
2) Revitalize Your Value Prop: Take a fresh look at your offering. If it doesn't add value to customers, shut it down. Gerstner backed away from relying solely on IBM's Mainframe business and instead positioned the company as an 'integrator.' Re- swizzle your messaging away from a solutions and product focus to a value-centric approach. Personalized messaging and content gains more attention and converts at a higher rate to revenue.
3). The Turn-Around Generalist: While subject matter experts are important, the senior leaders will have experience and knowledge of many of the components of the modern day business. For example, marketing now consists of many different moving parts. Those who have an understanding of how all of the puzzle pieces fit together will be most valuable.
4). Top Down Meets Bottom Up: Organizations can’t change their culture unless individual employees change their behavior—and changing behavior is hard (HBR). Senior leadership needs to have the vision, sell it in, select leaders who will carry the ball, and engage with the rest of the organization and give them the freedom to contribute, challenge, reject, cry, laugh, share, pout and eventually(hopefully) embrace. Not everyone will stay on board and that's ok. Teams will succeed and Narcissists need not apply.
The sweeping changes developing today around buyer and consumer behavior, the expanded role of marketing, the advanced methods of selling and the way organizations work together to effectively manage these changes present a great opportunity. The old way of doing things is definitely not what it takes to succeed in the present and future. Leaders who possess the vision to deliver success in the social-digital-mobile economy will be able to evaluate the issues, deliver the vision, and boldly work toward changing the culture of their organizations.
Dan Sixsmith is a VP at Alinean, Inc.
He is Founder and CMO at Trammel Marketing Group and Chief Content Officer at "The Digital Advantage by Dan Sixsmith."
He is also co host of the weekly Podcast, This Week In Digital Marketing subscribe here: http://t.co/H6wqFueAB2
Twitter:@DigitalAdvantg
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