Any complex organization has multiple initiatives and StorageTek was no
exception. Incorporated into the model of high-performance culture were the
components that must be in alignment with the definition to avoid conflicting
messages to employees, customers, and shareholders. For StorageTek, these
components included strategic planning, customer and shareholder relationship
management, market-driven product and services development, leadership
development, quality, employee communications, and human resource
practices.
The equation, “Effective Leadership ϭ Results ϫ Competencies” was adopted
from Results-Based Leadership (Ulrich, Zenger, and Smallwood, 1999). Work
began with the executive team in June 2001 to define the leadership blueprint
for StorageTek. Work focused on strategic clarity and leadership alignment,
including defining the customer value proposition, business focus, and growth
strategy.
Create a Sense of Urgency
Defining a successful future for StorageTek was just one part of defining the
challenge. There was also a need to create a sense of urgency among all
employees. In August 2001, 170 leaders representing the worldwide scope of
the company were invited to participate in a three-day leadership conference.
With the theme of “Navigating to New Horizons,” Martin, the StorageTek CEO,
discussed the state of the business and the competitive environment. While
creating a sense of urgency, he also expressed confidence in the future if
the company, its leaders, and employees changed.
To further create a sense of urgency, a researcher reported on information
from customers who bought from StorageTek as well as those who chose to do
business elsewhere, making the voice of the customer real to all attendees.
Partnering with RootLearning, a company specializing in transforming strate-
gic direction to employee dialogue, a learning map called “Current Reality: The
Flood of Information” engaged all leadership conference attendees in an inter-
active, cross-functional dialogue about StorageTek’s competitive environment.
Information on the history of the storage industry, customer business prob-
lems, and competitor characteristics and market share were included in
the map.
A motivational speaker at the leadership conference delivered the message
that “for you to change, I must change,” and a group of StorageTek manufac-
turing employees described how they were tired of waiting for management to
make the necessary changes and took action for themselves. Upon arriving at
the conference, each attendee received a musical instrument made by indige-
nous peoples from around the world. Each portion of the conference had a
musical piece representing that particular content. For example, executives
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beat a Navajo ceremonial tom-tom to represent strategy; at the end of the con-
ference, all the pieces were combined to create a symphony of change.
The ceremonial tom-tom also represented the “cadence of change” required
to deliver a high-performance culture. The resolve to change and implement
changes must be stronger than the resistance to change in order for the changes
to be real and permanent.
Late in the fall 2001, Current Reality: The Flood of Information learning map
was rolled out worldwide to all employees. Groups of eight to twelve employ-
ees gathered at a time to learn about the competitive environment in which
StorageTek operates. In January 2002, follow-up by executive team members for
all employees in the form of geographical kick-offs continued teaching and rein-
forcing the key messages begun at the leadership conference. An employee
communications newsletter again described the high-performance culture that
was our goal and how the many initiatives throughout the company were
connected to that goal.
Lessons Learned
There were three lessons learned from the initial phase of transformational
change:
1. Define where the company is going—provide the result of the program
with measurement that translates into business objectives.
2. Use as much as possible of what already exists in the organization.
This provides a sense of stability for many employees, avoids the
temptation to label work done previously as a waste or poor quality,
and lessens the “flavor of the month” cynicism.
3. Develop a cadence of change—similar to the base beat of the drum—to
maintain employee awareness of the needed changes and provide link-
ages to various programs and initiatives.
WORK THROUGH CHANGE
In reality, the first stage of change never ends. However, little progress is achieved
if the organization focuses only on defining the challenges. For StorageTek,
the second stage, working through change, included the following goals:
• Create a focus on results.
• Define individual expectations.
• Improve management competency.
• Grow organization capabilities.
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Focus on Results and Defining Expectations
Not everything worked perfectly the first time. At the August 2001 leadership
conference, a second RootLearning map, “Strategy: Navigating to New
Horizons,” was introduced to define the StorageTek strategy. It was clear from
the feedback that this map did not yet convey a clear message about StorageTek’s
strategy ready for consumption by all employees. To provide the strategic clarity
required for every employee to “buy into” the transformation plan, the map
needed to clearly state the StorageTek strategy and provide the bridge for
employees to link their individual work to the strategy.
In reworking the learning map, the executive management team members
took special care to review the content of the map and clarify key points. The
map was piloted with groups of employees in Colorado and France to be cer-
tain the strategy was clear before it was translated into eight languages. Again,
facilitators worldwide led groups of eight to twelve employees in dialogues
about the strategy and the link to employees’ own work. As with the first map,
the more cross-functional the make-up of these employee groups, the more
powerful the learning.
Despite changes to the performance management tools in the three previous
years, focus groups of employees and managers told us they believed the per-
formance management system at StorageTek was an optional one. Numerous
employees reported having no goals or performance reviews. Managers reported
confusion about expectations and offered that they suffered no consequences
for taking short-cuts in performance management. Unfortunately, many man-
agers applied the “peanut butter” approach and gave all employees a similar
rating and merit increase rather than differentiate high performers from low. It
was no wonder that there was a lack of clarity around expectations and results
to be achieved! Three efforts began in the fall of 2001 for implementation
January 1, 2002, to solve these problems.
The first effort was to align goals worldwide and assure that every employee
knew what was expected and how he or she would be measured. The
StorageTek Quality department developed a Web-based tool that provided every
employee visibility to all goals through department level. The Quality depart-
ment audited goals, providing feedback on improvement. Goals were then tied
to individual performance goals in the StorageTek performance management
system. Each month, there is a thorough reporting of goal achievement to the
executive team. Resources and priorities are discussed as necessary to meet
goals.
The second effort was the redesign of the performance management system
to support the StorageTek definition of a high-performance culture. The tool is
Web-based and provides for employee assessment in three parts. The underlying
philosophy implies each employee must perform to or exceed expectations in
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all three areas to enable StorageTek to achieve a high-performance culture. First
is the focus on results through assessment of achievement of performance goals.
The second is an assessment of how well the employee is keeping skills and
knowledge levels current and achieving set development goals. The third is a
360-degree assessment of twenty-six behaviors that indicate an individual is
acting in accordance with the core values and organizational capabilities. The
manager and employee jointly select those asked to provide the feedback; feed-
back can come from peers, subordinates, customers, partners, and vendors.
(Subsequent analyses of data led to limiting the number of behaviors to sixteen
that statistically correlated to performance.)
The performance review discussion takes place between the employee and
manager, and is an open and honest discussion of performance in all three areas
based on self and manager assessment, along with feedback from others. The
performance review is completed early in the first quarter of each year for
the previous calendar year, with a midyear performance checkpoint conducted
in summer to assure that an employee is on track to achieve annual goals. Man-
agers are required to meet a distribution curve of ratings at the functional or
business unit head level at each review.
Employees who do not receive a “meets expectations” or higher rating are
counseled on how to improve their performance through a plan of action. An
employee who continues to fall below a “meets expectations” rating leaves the
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12345
5% 10% 60% 15% 10%
0.8%
Rating
% Number of Employees
Expected distribution
Actual 10.1% 49.8% 30.8% 6.8%
Table 17.1. Performance Measurement (Spring 2002)
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company. Likewise, employees who exceed expectations receive larger merit
increases and receive special development attention.
The expected distribution curve was not met the first time (spring 2002) and
managers were sent back to revise their ratings. Although not a popular move,
requiring managers to meet the distribution curve sent the message that
StorageTek was serious about performance. The expected distribution curve was
met with many fewer adjustments for the midyear performance check (summer
2002). Subsequently, few adjustments were needed to meet the curve.
The third effort was a review and electronic sign-off of StorageTek’s code of
business conduct. Months before the media began reporting on various corpo-
rate misstatements of earnings, StorageTek translated its code of business con-
duct into eight languages and asked each employee to read and sign that he or
she understood what was expected in terms of lawful and ethical business con-
duct. Working together, the Office of Corporate Counsel and human resources
followed up with employees on questions and concerns. Every employee is
expected to act in accordance with this code of conduct.
Improve Management Competency
At the August 2001 leadership conference, work began on creating a leadership
brand. The intent of a leadership brand is to succinctly communicate to lead-
ers what is expected of them and how these expectations relate to achieving the
strategic objectives of the company. Following the conference, agreement was
reached on the following leadership brand:
StorageTek leaders act with speed, simplicity and accountability so that we bring
value to every customer interaction. We will become the number one total
storage solution provider by effectively delivering high-quality products and
services, resulting in sustainable shareholder value.
StorageTek’s leadership brand stated a common set of expectations for all
managers, which was introduced and reinforced through a leadership and man-
agement curriculum with required courses. The curriculum is built to address
the needs of various levels of management—new manager, program or project
manager, first level manager, and executive.
“What gets measured, gets results” applies to leadership development, too.
Historically, there appeared to be little opportunity for employees to grow their
career through the management levels. For every external hire at director and
above levels during 2002, there was just one internal promotion into those same
levels. StorageTek set a goal of achieving a 3:1 ratio of internal promotions to
external hires at the director level and above by 2006. Development is a long-
term investment in talent. Succession planning has placed attention on internal
candidates for these positions, which include vice presidents, directors, and
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