Great Turnarounds Begin with Culture, Not Strategy
Verizon CEO Dan Schulman shares how he reshaped the company's culture.
1The Need for Transformation
Verizon had been losing market share for five years, with declining stock prices and low employee morale. Customer satisfaction was dropping, and churn rates were rising. The company had relied on its engineering prowess but neglected to put customers at the center. This situation highlighted the need for a radical change.
2Dan Schulman's Arrival
Dan Schulman came out of retirement to take on the role of Verizon's CEO. As a board member, Schulman saw the company's potential and took on the challenging task. Over nine months, he focused on transforming the company's culture and took significant steps in this direction.
3The Importance of Cultural Change
Schulman recognized that Verizon had a risk-averse and inward-looking culture. The company's hierarchical structure and process-heavy approach slowed down the pace of change. Schulman initiated a cultural shift to make employees more outcome-focused and forward-thinking.
4Customer-Centric Approach
Verizon adopted a customer-centric approach with the initiative 'Every customer has a name.' Customers began to be treated as individuals rather than accounts. This led to tangible changes, from improving service times in stores to making plans more understandable.
5Preparing for the AI Era
Schulman invested in reskilling employees to prepare Verizon for the AI age. He emphasized the importance of being honest about the disruption AI would bring. The company focused on playing a larger role in technology and AI.
6Leadership Approach
Schulman advocates for leaders to embrace change and trust their employees. He adopted a leadership style focused on outcomes rather than processes. This approach enabled Verizon to make decisions more quickly.
7Becoming Competitive
Verizon adopted a more aggressive strategy against competitors. Schulman stated that the company needed to shift from being 'prey' to 'playing to win.' This mindset change laid the foundation for regaining market share.
8Employee Engagement
Employee engagement was critical during the transformation. Schulman listened to employees' ideas and involved them in the process. This helped boost morale and increase belief in the change.
9The Impact of Past Success
Verizon resisted change by focusing on past successes. Schulman emphasized the need to imagine future successes. This shift in mindset encouraged the company to become more innovative.
10Pace of Change
Schulman noted that the pace of change inside the company was slower than external changes, leading to falling behind. He stressed the need for Verizon to move faster and be more open to taking risks.
11Outcome-Oriented Approach
Schulman adopted a management style focused on outcomes rather than processes. He trusted employees to do good work but wanted to see results and timelines. This made the company more efficient.
12The Significance of Transformation
Verizon's story shows that without cultural transformation, strategic changes in large companies may fall short. Schulman's leadership highlights the critical role of culture in a company's success. This transformation serves as an example for other companies.
Original article: HBR IdeaCast — Büyük Dönüşümler Stratejiden Önce Kültürle Başlar