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Growth Ahead of Schedule and an Increase in Total Revenues of 58%
Client: TJ Maxx
To leapfrog the competition, TJ Maxx’s European leadership decided that the organization needed a total overhaul – and fast. This included a redesign of company structure; new leadership competencies; partnership-based relationships between merchandising and buying; quicker processing of goods from manufacturing to market; and improved development and support for oversees market associates.
A group of senior leaders and a select subgroup of staff planned the 18-month growth effort. The core of the work was four 200-person meetings. The first two meetings raised the organization’s awareness of the new strategy. In the third meeting, people translated the strategy from plans into specific actions with timelines, accountabilities and success measures. In the fourth meeting, participants were educated on all strategy-related initiatives, made needed course corrections, implemented the accelerated strategy and introduced a management system to win share in new marketplaces. A competency model was created to define the needed leadership skills for the enterprise to succeed. In addition, a European Learning Centre was launched to support the strategies and plans developed as part of the effort.
Things changed quickly. Some specific wins included:
Over a five-year period, the results were also significant. The organization’s apparel stores increased by 41% and its Home Goods stores doubled. Over this same period, total revenues for the enterprise increased by 58%. While the competition’s same-store growth was less than 1% over this period of time, TJ Maxx’s growth was up by 10%.
Business Unit Pulls Out of “Death Spiral”
I had just given a keynote address at a large-scale change conference when an unusual thing happened. I was relaxing in the bar when two gentlemen introduced themselves as front line oil rig workers – not your typical change-event participants. These were two of 25 employees sent from Mobil’s Gulf of Mexico business unit. The group included a wide variety of job roles such as accountants, project managers and geoscientists. Mobil was trying to create a high-involvement culture where employees would have a say in which changes the company would make. These two oil rig workers, along with the other team members, would decide on the organization-wide change approach. This kind of mass involvement in choosing a change approach was unheard of.
What prompted Mobil to take such drastic action? They had a big problem. The unit hadn’t made money for five years. To make matters worse, they were trapped in a vicious cycle. Corporate was refusing to invest in the underperforming business. No cash from corporate meant they had no money for growth opportunities. This led to even worse performance…which resulted in even less investment. People in the business unit called it a “death spiral.”
An additional problem for the unit’s 1,200 employees was a lack of teamwork. Mistrust and close-mindedness were winning out over efficiency and effectiveness. To stay in business, things had to change – and fast.
The chosen approach would have to meet three criteria:
- The change effort plans had to be developed by a cross-functional team
- All 1,200 employees needed to be involved in saving the business directly; and
- Substantive changes had to be made right away.
After speaking with me for two hours, the oil rig workers met in a breakout room with their colleagues. They shared what they had learned, took a vote, and awarded my company the job. (I had never won work through such an unusual decision-making process.)
We began by creating a leadership team that included the expected senior executives as well as the union and informal leaders. At first there were uncomfortable silences and misunderstandings. Then the new culture began taking shape before their eyes. The leadership team clarified goals and agreed to support one another. A larger planning team of 37 distilled the effort’s purpose into a single statement and created a roadmap to achieve it. People acted in one another’s best interest. Enemies put aside their differences and became partners.
“High involvement” didn’t just describe the organization’s desired culture. The phrase became the guiding philosophy of the change effort itself. Rather than the top-of-house making all the important decisions, 300 formal and informal leaders aligned around the change approach, hoped-for results, and behaviors needed to turn the business around.
Then something unbelievable happened -- 1,000 people from across the enterprise met for three days and reached consensus on ten future-saving actions. When it came time to implement, there was no confusion or conflict.
Dedicated teams involving all employees led the implementation of these better ways of doing business, deeply embedding the high-involvement culture into daily operations.
Within 15 months of launching the change effort, the $750 million business unit achieved the following:
Transit Provider Wins with Growth Strategy
Client: Ann Arbor Transportation Authority
The Ann Arbor Transportation Authority (AATA) was famous for its excellent on-time, customer-friendly services. However, the AATA board saw big changes coming. For example, the University of Michigan needed a coordinated transportation system for students and faculty outside the campus. The suburbs around Ann Arbor were growing and needed commuter service. Travelers wanted direct service to the airport. The AATA board decided to get ahead of the curve by bringing their planning people together with representatives from the community.
It was decided the effort would be guided by a Core Team. This team included a board member, senior executive, marketing director, financial analyst, route coordinator, driver, and mechanic.
The early work was done by small cross-functional task teams and in large group meetings. Internal and external stakeholders built a shared understanding of the organization’s future direction and desired culture. This common picture became the foundation for a vision all employees shared.
Defining the best future for AATA and its customers was not simple. The questions were clear:
- Who would be the business’s customers?
- Where would service be provided?
- How would riders’ needs be met?
Things got more difficult, however, because each of these questions had several possible answers. The simple decision to make youth a key customer required stops be made at parks and rec facilities. But that would add time to already tight schedules for getting business people home on time for dinner. Continuing to use vans at retirement communities meant they would not be available to provide services to outlying areas. The answer to one question had cascading implications for the others. Professional strategic planners would have had a tough time sorting through these complicated permutations.
AATA asked drivers, mechanics and other employees to wrestle with these dilemmas. We used a scenario-based planning approach that enabled people to identify tradeoffs among various futures…and finally select a path forward. Once these critical decisions were made, it was time to dig into the details. What specific strategies needed to be implemented to make the future a reality? How would the business and the people in it need to change to implement these plans?
People learned to think more broadly about their own mission as well as the organization’s. They developed new skills, knowledge and behaviors required for the effort to succeed. Cross-functional teams designed structures, processes and systems which supported all employees in making these needed changes.
This high energy change effort delivered substantial results. Some immediately, others over time.
In the first year AATA:
Long-term results included: