Building a non-wimpy, transparent, performance-based culture
CIO and SVP
Of course, saving 40 percent and delivering better services at the same time is important. But one of the most rewarding things for CIO Gerry Imhoff has been changing the culture at Maritz. Here, Gerry talks EQ, evolution, and pulling back from the “barely tolerated internal IT supplier spiraling towards irrelevancy” edge.
What are you most proud of? What is the one thing you would point to and say, "Hey, I made a difference as an IT leader."
One of the accomplishments I’m most proud of is that we (as a team) were able to figure out how to get an organization on board with what was essentially a 180-degree culture turn. This turn transformed us from a barely tolerated internal supplier spiraling towards irrelevancy to a valued partner. Today, it's really difficult to distinguish where the organizational boundaries even exist anymore between the IT organization and our internal customers or the business partners. So that's one.
Secondly, I would say that the culture I just described, which I consider to be our secret sauce in running technology like a business, delivered a 40% cost reduction over a 4-year period. Simultaneously, we dramatically improved service levels and added new services, and we took IT employee morale from what was effectively in the toilet to one that's now characterized by incredible engagement and passion.
And then the last thing I would say is a source of pride, which to me feels really bizarre for the leader of an IT organization to say, is seeing the people who stuck with us and embraced the change. Coupled with the new people we brought on, this team really understood the value of receiving feedback and owning it and using that to grow. That may be the achievement I’m most proud of, seeing people grow.
The savings we're generating are fuel for growing the business.
Of course, saving 40 percent and delivering better services at the same time has been great. But one of the most rewarding things to me is that what we're teaching, through our values and culture, are things that help everyone become a better spouse, partner, parent, child, neighbor, community member, what have you. The way we talk about the importance of open and honest feedback and those types of things—that kind of coaching really helps people grow. If I localize that to myself, it's helping me become a better husband, father, neighbor, and friend. And other people have told me the same thing’s occurring in their lives.
You can apply it to so many aspects of life. I get to see people grow on a daily basis and hear stories of how it's not only made them better employees but better humans. I did not anticipate that when this whole culture thing started.
So much of that is about loving what you do, right? People (in any profession) feel they're better human beings when they know they're adding value, and they’re pursuing their passions in the name of working, right?
Yeah, I agree 100 percent. I am so thankful that this opportunity came around. Let's just say in the latter third of my career, I'm having the time of my life.
How do you translate that passion and those accomplishments into actions and initiatives that satisfy your CEO? How do you align with executive priorities to keep them engaged as a supporter and a fan?
We're a privately owned company and our CEO, Steve Maritz, is a fourth or fifth generation owner. And I probably don’t have to tell you that he is a raving fan of our 40 percent cost reduction. Clearly, any CEO is going to like that. I actually found it funny that the other day when I was cleaning out files, I ran across a printed page from a presentation that I gave in 2006. And 12 years ago, we were reporting that over a 3-year period, we accomplished a 17 percent IT cost reduction. Frankly, I’d kind of forgotten about that.
Steve Maritz had ripped that page out of the presentation and sent it to me with a handwritten note that said, "This is a beautiful slide. Well done." So when I think back on it, what he's gotten used to is that our corporate IT organization has reduced IT expenses 17 of the last 18 years. The only year we didn't was the year that we replaced our fully depreciated 20-year-old PBX.
So figuring out how to reduce cost isn't new to us. And Steve is definitely a fan of being able to shift those funds from run-the-business to grow-the-business initiatives. He has told me on more than one occasion that the savings we're generating are fuel for growing the business. So that's really cool, to be able to go back to my organization and draw straight lines between our efforts and company growth. It's a lot of fun.
Not everyone gets that feedback. And without it, cost reduction requests can feel very arbitrary.
Out of 18 years, I can only recall 2 or 3 times that reductions were mandated or requested. We feel compelled to be fiscally responsible. But I do remember, we had a couple of painful ones. Everyone has them.
I remember at one point, my predecessor said to Steve, "Hey, wait a minute...how come you keep coming to IT to reduce?" And Steve's response was, "Because you deliver every time I ask, so I'm gonna keep asking until you don't."
I've kind of learned to roll with it. When the big one hit in 2013, a 35 percent reduction mandate, I had no freaking clue how we were going to do that. But ultimately, you just start and you figure it out. And we always do.
That formal cost reduction effort ended two and a half years ago, but we've continued to improve on that, removing an extra 5 percent which was not requested. We did it because we have become good at questioning every dollar of our spend and challenging ourselves as to whether it’s necessary, or finding a smarter or cheaper way to deliver the service.
So, what makes your CEO a fan of IT?
Well, after a decade of hearing complaints from the businesses about how corporate IT is an impediment to their growth and those type of things, he's now hearing that the approach we use to partner with our business customers is exactly what they've been looking for.
The business units used to express a ton of frustration about their lack of control, lack of choice, the inflexibility of my group, and just a litany of other things that frankly I'm embarrassed to admit were an accurate description of the IT organization I was responsible for five, ten, fifteen years ago. Our approach to our business at the time was among the key reasons that Steve shifted the corporate strategy towards decentralization five years ago.
Now our CEO very much appreciates the fact that our intense focus on culture the past few years has completely altered the approach we use to engage with our business.
And that resulted in a correct mix of determining where it's appropriate to keep things centralized and where business specific decentralization makes sense. We kind of landed in the middle. I think he appreciates that because rarely does “all or nothing” makes sense. The answer's usually somewhere in the middle. We were able to do that by establishing really good relationships with our customers and doing so collaboratively without having some consultant come in and say, "Do this. Do that." I know he appreciates that very much.
You have another secret sauce, in terms of how you provide transparency today. What was it and how did you use it to open up the black box and build those better relationships?
When we had a much more dysfunctional relationship between IT and the business, some of their complaints were lack of control, visibility, and options. And, in many cases, they just received a bill showing lumps of money that they had no control over. Even when they felt they had control, we had such poor definition of the cost drivers that they would pull the lever on a cost driver, thinking they were saving money, only to have my group not be able to reduce expenses based on that same cost driver.
By embracing technology business management (TBM), both by changing the culture and by implementing Apptio, we were able to bring a level of transparency to our businesses that completely changed the conversation. It went from “You are an expensive glob of money that we have no control over,” to, “Hey, we now can really see and have a direct line of sight between our consumption and our cost. And, by the way, you have now put in place accurate cost drivers so that we can pull levers and reduce consumption to make our costs go down.” Conversely, they also recognized that if they pushed the lever the other way and consumed more, we may not be able to absorb that and it's going to cost more. So that was a big component of transforming our credibility with the business.
What would you say to those who aren’t convinced this could work for them?
I would say, I've been where you are. I understand what it feels like to think, "Oh my God, how are we gonna do it?" We had a decade and a half of just relentless cost reduction activity and constantly hearing from our customers that our services were mediocre at best, sometimes flat-out despised. The trigger for us was this 35 percent cost reduction mandate coupled with the strategy to decentralize.
At that time, I wondered if it was time to update my resume and head for the hills. And probably for the first year, that's where we were. I would not be so bold as to tell you that we had this grand plan from day one or even had a grand plan from year one, right? We figured this out as we went along. But history teaches you a lot, and I think what I would say now is, "Will it work in your organization? If you don't fix the culture, it won't.” Maybe you can get some cost out but I don't think it will be sustainable.
When I say fix the culture, I believe that at Maritz, and I think really probably anywhere else, culture has to start with the management team, period. The management team has to completely buy into true employee performance management.
We use the phrase performance management a lot. I guess that's reasonably universal. But what I mean by that is real-time coaching, honest and transparent feedback, and holding people accountable to change their behavior and to change their approach to improve others' perceptions of them—whether that's a coworker, customer, subordinate, or manager perception. Your behavior drives perceptions in every direction.
And many legacy managers, myself included, wimp out and provide very little feedback and very little interaction. You give the once-a-year performance appraisals, and most people walk on water, and you have your token thing or two that they can improve on. And it's just a sham. But once you understand that you have to get past that, and coach frequently, hold people accountable for delivering amazing interactions and get out of their way, that's when it really starts to work.
So for us, it was ridiculously hard to get managers to truly do performance management as we’d defined it. But since that was our foundation, what we ended up having to do was change a lot of managers. And actually, we had to change a lot of non-managers too. It’s hard but the fact is, when you really practice effective performance management, you're being very transparent in the conversation with the employee. You're ensuring that they understand your expectations and what's required of them to grow and improve. Everything that happens after that is their decision.
And again, from the hard part perspective, if your management team doesn't get serious about doing that performance management and making sure that every single person improves, you won't succeed. The transition point for the employee is when they understand that the feedback they receive is not criticism, it's actually an opportunity for them to grow and improve. That's when the magic happens.
Is it time for you to throw in an analogy?
I do love them, as you know. If you read a book by Wayne Gretzky or Michael Jordan, or somebody like that, you know that until the day they stopped playing, they were working on improving themselves, and they craved feedback—whether from their coaches, or watching video replays, or whatever else. But even the two greatest players of all time in their sports worked on improving themselves every single day. So there's always some feedback you can give somebody regarding the way they can improve.
My biggest warning for people who undertake this path is to understand that initially, the message is going to be soft-pedaled. And even when you soft-pedal the message, employees are going to get irritated at the message. But stay the course. If you commit to frequent feedback, every single subsequent piece of feedback can get more transparent and more direct because the employee is going to get used to hearing it, and there will be a transition to when they internalize it and own it. And that just initiates a wonderful manager-employee relationship that will ultimately result in tremendous employee growth.
For me, it was cool that it benefits Maritz, but it's really amazing to me that it benefits them, and makes them a better person. So if I summarized it in one phrase, I would say the key is establishing a non-wimpy performance management-based culture.
How are you using technology to stay competitive? How are you positioning yourself for the future?
Perhaps you wouldn’t expect a CIO to answer this way. But my role, as I see it, and the role of my leadership team and managers, is to hire incredibly talented, collaborative, relationship-building technical resources and coach them to get better. And we empower them, and we hold them accountable to learn our business and to work with our business to employ whatever technologies are gonna help our businesses win.
The point is, when you hire the right people and you get out of their way, they do amazing things.
When you hire the right people and you get out of their way, they do amazing things.
So do we exploit cloud, and AI, and machine learning, and big data, and containerization, and all that other stuff that helps us stay ahead of the competition? Absolutely. But will I, personally, or will any of my managers, tell our team to pursue any of those technologies? No way.
What do I know? I haven't written a line of code since the '90s. I'm no longer knowledgeable about the details of technology, but I have employees who are. So who am I to tell them that AI is the way to go? My point is this: if your technical employees aren't investigating those things, and doing that on their own, and figuring how to use them to your company's advantage, maybe you have the wrong technical employees. Or the other possibility is that you haven't empowered them. Either way, it's your fault as a leader.
We used to over-prescribe and under-empower like crazy, but once we got the formula right— empowering technically capable employees who own feedback they receive, and managers who don’t wimp out in providing feedback about behavior and approach and then get out of the way and let the technical people spread their wings —it’s crazy how high they fly and how much your organization improves.
»Read next on Emerge:
We have to do WHAT? How Maritz transformed IT services to become a trusted business partner