Previous to VOCE, there was not a unified method to cohesively collect hundreds of employee insights on any key topic.  The Company had a solid foundation for implementing change based on customer insights and financials, but there was never an integrated frame inclusive of the employee perspective.   If anything, there was anecdotal feedback from usually sample size of less than 10 employees on any given issue.  

 

VOCE has been woven into the fabric of customer insights as a way to further validate and provide a unique perspective on the customer experience that allows leadership to make better informed decisions to benefit our customers and shareholders.  Measurement is based on the number of employee submissions, customer satisfaction, and financial outcomes.

 

An example to articulate this is over the past holiday campaign, leadership needed to obtain a better sense of how to increase store traffic and if resources should be allocated to making the Best Buy Mobile offering of “Free Phone Friday” a daily event.  As a Consumer Insights Unit, an integrated approach between customers, competition, financials and now employees was implemented to inform the actionable insight that “Free Phone Friday” should be a daily offering.  Employees clearly stated the positive sentiment that was exuded among customers over the offering and validated that it has helped increase traffic at the local level. This type of decision in the past would have taken months to make to the equivalent of moving mountains, but the real-time insights helped inform the decision in less than one month!

 

Another key example was with the implementation of the Buy Back program at Best Buy.  The business problem was to obtain a clear understanding of the product categories that customers requested Buy Back, as it was limited to certain products.  Hundreds of employees offered unprompted insights that the program needed to expand to gaming, GPS, MP3 devices, Blu-ray players and desktop computers.  This was further validated by customer surveys resulting in the expansion of the program (less than four months after the initial launch)!          

 

Unintended side (positive) effects – As a result of being part of an insights unit in which VOCE resides, the field intelligence shared through the My Customer software platform has enabled such rich insights that typical primary research firms charge thousands of dollars for.  The aggregate of such insights have proven to be cost-effective for the enterprise and fast and flexible in a high-speed and dynamic retail environment that needs constant input and insights to drive the business forward.

 

Another side effect was the fact that employee satisfaction directionally increased in correlation with the submissions provided.  Simply put, if leaders listen to what employees share, employees in turn feel good about their work and feel valued.  This also was a proven differentiator in the industry and unique to the Best Buy culture for employees to feel empowered to share what they know about their customers and offer solutions, whereas many key competitors take a top-down approach.  This was critical component for employees feeling valued as trusted resources as having answers to common problems.    

Scrapping the Pyramid—Building a Good Neighborhood

From the start, we scrapped the pyramid and the power politics that go along with it to rethink the company as a community. Or, even better, think of the best neighborhoods and what it means to be a good neighbor. In an organization that is full of boxes in a big old triangle, every time there’s an opening, there’s a food fight over that box. In a good neighborhood, people step forward when they’re needed and do what they can becuause they like where they live. There’s a lot less trauma in a good community than there is in an organization driven by vacancies.

How do you build a company into a good neighborhood? Start by putting everybody into the same boat. Every employee is an owner of the company (and the company is 100% employee-owned). Instead of a job title, every employee’s business card reads “One of FEW” ( which means “friends enjoying work”—and we mean that)! We all share offices (including the co-founders and all the top executives). All work here is team based and each person plays multiple roles and can work on multiple teams, many of them on a volunteer basis. Information is shared widely and often. We make it very clear that every person here is important to the future of this company, that we care about them—and that nobody can go it alone. We discuss that our success will be through One of FEW producing the Power of We.

You start to get the message Day One. At 9am on your first day of work we throw you a birthday party—with wrapped presents, cake and all kinds of fun. That morning, your family gets the “welcome wagon”—flowers, gifts and a personal note from me and Joe, delivered at home.

Why do we give people a party when they’re leaving a company?  That’s not the time to make them feel important! How do we make people feel important the moment they join a company? The idea behind the birthday party is that you’ve arrived at a new place where you belong, you were expected, and you are important.

Even better, when  you go to your birthday party, everyone in the room has a lot of different reasons to relate to you. New recruits fill out a “birth certificate,” which details their hobbies, travel experiences, family, schooling, pets, military service, and surprising facts—like a hobby of growing giant pumpkins or playing a particular instrument..

 The birth certificate becomes a “trust token” both inside the organization (it pops up in your phone and email interactions with colleagues) and beyond. On every page of the Rite-Solutions website you’ll find an owl icon & the word “Who?” Click on it and up pops a window of birth certificates and contact information/e-mail form for every person connected to that piece of the business. By letting outsiders contact our people directly, we have shown that they are both important and trusted to interact on behalf of the company with potential clients. And it’s a lot more engaging for people interested in the company to email a real, living, breathing, human being than info@sales.com! Who you personally select to conmmunicate with will be a function of your hobbies, pets, hometown, instrument, etc.

Revving the Innovation Engine

In our old company when you had a good idea you had to go up in front of what we called the “murder board.” You’re standing up in the spotlight in front of six fat white guys who say they are there to help with your idea, but what they’re doing is shooting down your relevance.

In our quest to create a culture of innovation, we tried everything—and quickly learned what doesn’t work: innovation as an annual ritual (the Innovation Summit), just-in-time innovation (a jam, blitz brainstorming, an innovation offsite), the “innovation room,” and unstructured white space (put up whiteboards and the ideas will come). What usually happens, is the idea with the most theater (extrovert) that wins, and the people with the most charisma suck all of the oxygen (budget) out of the room (which generally has few intorverts in it anyway).

Ultimately, we turned to what we know: games and software. We wanted people to invest their intellectual capital in ways that they felt would benefit the community. That led us right to the stock market as a good game platform for our innovation engine.

In 2005 we launched a collaborative stock market-based game with the aim of making our people feel relevant to the success of the business in the most tangible way, and tapping their amazing intellectual bandwidth far beyond assigned “job tasks.” We wanted to demonstrate that we trust them and entrust them with the future of the company.

We call it Mutual Fun. Here’s how it works:

On your second day at Rite-Solutions, the serious fun begins. You’re invited to join your colleagues in a stock market-based game called “Mutual Fun.”

Imagine a typical stock market portfolio—but instead of buying and selling shares of stock and other financial instruments, players can float, advance and develop portfolios of ideas. Every person in the company gets an initial $10,000 in “opinion” money to invest in their peers’ “idea stocks.”

But the first step is to complete a profile that details your work experience, your expertise and capabilities, your interests and curiosities. This may seem like an obvious step, but it’s a crucial one. This is how players establish what they bring to the game table—and ultimately allows other players to search for people who might be able to assist them in various areas of their innovative ideas based on profile information.

Then the game begins: in addition to investing in and developing other ideas, any player can propose an idea—from a cost saving or efficiency measure (which gets listed on “Savings Bonds”) to an extension of the company’s current capabilities (“Bow Jones”) to a truly disruptive venture into a new business or technology (“SPAZDAQ”).

 The creator fleshes out his or her proposal in an “Expect-Us” (rather than a prospectus), assigns it a ticker symbol, and follows a detailed template to describe the value-creating potential of the idea. Ideas are advertised on the Tickler Tape as initiaI piblic offerings (IPOs) with a starting price of $10. Colleagues can make dollar investments in stocks, volunteer time (via “assists”—discrete activities to help move the idea forward), or express interest (in the threaded comments attached to every idea). An algorithm dynamically derives individual stock values (from the collective activity and investment around an idea), portfolio values (from an individual’s activity), and a player’s place on the leader board (from an individual’s own idea stock values and activity in assisting, investing, and discussing their co-workers ideas).

Inevitably, volunteer teams spring up around initiatives on Mutual Fun. We don’t assign anyone to anything. The creator posts “assist” projects and can recruit help, but people end up belonging to initiatives based on their own interests and ability to help (relevance).

You can browse ideas by date created, current value, number of assists, views,  comments or just your persoanl portfolio. You can explore a single idea (or a single player profile) in great detail (including its history and recent activity), and you can zoom out to review the best performing ideas and players, the ideas with the most comments or assists, and the velocity of an idea over time.

Another feature, “Penny Stocks,” offers players an opportunity to be heard. Management can pose a question to the player group and the players to provide their 2 cents via a simple template. The “Challenge” template is a way to get a thinking blitz going around a focused topic—and to allow the people doing the thinking to weigh-in on the other inputs provided.

When stocks crack the “Top 20” list of most valuable stocks, we often fund them (with real money!) and volunteers organize to take them to the next level. When any idea turns into a real cost savings or revenue producer, the creators share in a percentage of those gains. (And whenever we file a patent, the individuals behind the ideas are listed as inventors on the patent filing).

Just a couple examples:

One of the first stocks proposed on Mutual Fun (ticker symbol: VIEW) was a proposal to create a 3-D, videogame-like environment for emergency decision making for the company’s Navy and domestic security service clients. That product, called Rite-View, now accounts for 30% of Rite-Solutions’ revenues.

Some of the most valuable ideas come from the most unexpected places. Take the case of Rebecca Hosch, and administrator with no technical experience. In the process of planning the company’s annual holiday party and helping her daughter with a school project, she came up with an idea for using a bingo algorithm we created for our casino clients to create a web-based educational tool. That idea, “Win/Play/Learn” (symbol: WPL), immediately caught the attention of some engineers, who developed her idea into a product ultimately licensed by toy-maker Hasbro. We continue to work with Hasbro on a variety of projects and products well beyond the scope of WPL.

Joe and I would never have come up with either of these ideas—much less funded them—without Mutual Fun. The market not only taps into the quiet genius in the organization—it routes around the management disapproval loop.

So, it’s probably not surprising that Mutual Fun is one of the all-time most popular stocks on the market. We continue to evolve our innovation engine based on the lessons we’ve learned living with it inside Rite-Solutions and building versions of it and embedding them within other relevance-thinking organizations.

 

There were many lessons learned when communities and social networks were first introduced to Electronic Arts. 

The first hurdle was explaining the role that the communities played within the enterprise.  Employees were used to the traditional organizational team structure and they were used to working in project teams. Initially there was some confusion about how this new communal model would not conflict with the efforts already underway within teams and projects. The solution was to educate, communicate, and use real life examples of how and where a community could act as a catalyst to find information quicker, make the work easier and/or allow decisions to be made quicker. Through many seminars and meetings the Community Champion educated the staff that communities really transcended traditional organization structures and in fact fulfilled much of the “white space” or interactions between different teams. Communities were really there to harness the creative power of individuals no matter their role, their team, or if there was an officially funded project in place.

Another challenge was convincing the employees that participating in a community was not another “job” they had to do on top of their existing workload. Initially the employees were convinced that they were going to be forced to participate in a community, contribute to a discussion, or write a knowledge article. Again through education and examples, people eventually understood that the communities were a source of help and a way to make decisions even faster. When people collaborate, they have to connect with each other, collaborate in white boarding sessions, and follow up with emails or meeting notes. Communities still embraced these concepts but made the interactions virtual, quicker, and in some cases fun. 

The platform used to enable the communal and social interactions was also key to adopting communities. The platform had to be intuitive, engaging, and offer the content people need in a way they can easily digest. Some capabilities offered in the EA solution capitalized on many Web 2.0 technologies readily available like personalization, single sign-on, advanced search, member ranking, ask-and-answer forums, activity streams, just-in updates, rich media content, and some kind of rating of the most popular content and contributions.

Getting people to interact in a community was also a challenge. How does one ignite the community so it can soon become organic and self sustaining? EA explored many different options.  Healthy completions and incentives were offered to promote interactions and contributions. Even something as simple as peer recognition was also a powerful tool. The more a community member contributed or spent time within the community, the more that person’s “ranking” would increase. For example a new member would have a ranking of novice, while an experienced member would have a ranking of subject matter expert.  EA even turned to launching some of their communities with an old fashioned meeting, but a meeting where people would want to attend. For example when initiating the Project Management Community many years ago, Agile software development was still a new concept. Working with the community team lead, the community champion invited an outside instructor to come talk to the community in a brown bag seminar. After the seminar, the questions and discussions were held on the community platform which in turn spurred other related discussions. It wasn’t long until the Project Manager Community was off on its own.

The initial interest in EA’s launch of internal communities was strong, as many employees wanted to see how this new organizational concept would help them better connect, share, and collaborate.  The launch of the pilot internal communities was not smooth: EA initially launched too many communities, too quickly. Multiple communities diluted participation, which caused people to conclude the approach was ineffective, and the participation in some communities waned. “We launched with fifteen communities, but we soon found that in order to have a viable community you need at minimum thirty to fifty active participants. We should have targeted between four and six communities instead,” said Michael Cuthrell, Director of Global IT. “That way we could have worked with the initial pilot communities to see which techniques and incentives spurred the most participation and carried over those successes to future communities.”

Grassroots empowerment begins
A few months after arriving at BNZ, I was visiting a store in Christchurch. It was just past 9 am on a Tuesday, and the store wasn’t open yet. Most days, it opened at 9 am but on Tuesdays and Wednesdays, it opened at 9:30 to accommodate staff training. Corporate policy dictated that schedule for all of our stores. The problem was the growing line of impatient customers outside the store. I asked the store manager if this was a regular occurrence. She said it was, and that it was very frustrating. I asked the store manager if she would open the store earlier, and reschedule training, if she could. She enthusiastically said she would, and I gave her the go-ahead. There was a condition, though; there wouldn’t be any extra money from me for staff pay.

Within days, news spread across our retail network, and I was fielding calls from managers throughout New Zealand, requesting the same prerogatives. The general manager of marketing and I decided to give all the stores the flexibility to set their own hours.  Within six months, nearly 95% of our stores had altered their hours in some way, to better serve their local customers. In one Auckland suburb, we became the first bank to open on a Sunday morning, allowing us to service the thousands of customers who flooded the local farmers’ market. In South Island ski areas, stores stayed open until late in the evening, so skiers could attend to their banking needs after a day on the slopes.

The change raised concerns at BNZ headquarters, where policy changes typically went through detailed risk assessments, with every corporate function weighing in. Some objections were political, but most were practical. HR was concerned that changing hours would raise objections from the employee union, so store managers had to get agreement from all employees. Marketing thought that the hand-lettered signs being used to advertise store hours looked tacky, so we developed a software template that allowed store managers to print out a simple sign with store hours. Risk management was concerned about adherence to detailed policies about how a store was supposed to be opened, and cash pick-ups from armored trucks had to be scheduled at precise times. IT typically scheduled major maintenance work when stores were closed. What would happen if a store opened at an odd hours and the system was down? We worked that out, too.

The freedom to open stores when they wanted to was one of the most symbolic things we could have done for branch managers. It was in direct contrast to the “one size fits all” approach taken by head office. The same was true for other aspects of our business like marketing, where we run national campaigns, which meant some poor local branch would find itself promoting gold credit cards in a demographic where there’s zero chance of selling them. Bit by bit, we were able to give the branches more decision making authority. Now that branch could choose not to run the credit card campaign, and might opt to extend the previous promotion instead.

We kept encouraging store teams to take the initiative in testing ideas to better serve our customers, and they did. One of zanier ideas was a “trailer” bank that can be pulled behind a vehicle. While the concept had been in development for several months, a local store caused a splash when they towed the trailer onto a beach on New Year’s Day. Clad in BNZ t-shirts, staffers blew up balloons, fired up a barbecue, and chatted with people in the gathering crowd about BNZ products. HR was concerned about possible perceptions that employees were being exploited by being made to work on New Year’s Day, or that cooking sausages was breaching health and safety regulations.  I wasn’t really worried; the staffers were charged up by the freedom to experiment. If we had told them to do it, it never would have happened. But it was their idea, and no one bothered to ask permission.

In December 2008, BNZ was featured in the New Zealand Herald with the headline:  “Personal banking with a latte.” We were launching our most radical store experiment yet. We believed that ATM, telephone and internet banking overlooked the human enjoyment of interaction with other people, so our new “concept store” revolved around a café, had monitors running promotional videos, an internet kiosk, a free wireless network, and café style booths instead of private bankers’ offices. Store employees were encouraged to walk around the store, to improve customer service, not to wait behind the counter. Our employees embraced the approach, which fundamentally changed the way they did their work and demonstrated our new retail mindset. I always say that when it comes down to strategy and culture, culture will win out.

Inspiration and a radical move
In May 2009, I attended an NAB Enterprise Leadership Program led by Gary Hamel in San Francisco. We talked about management innovation and looked at Gore and Google as examples; it was refreshing to look outside our industry for new ideas. I was especially struck by the notion of challenging traditional spans of control; Google had gone to 60 employees per manager. It was a way of forcing innovation through spans.

My plan was to remove a whole layer of the retail network infrastructure. That would mean eliminating area managers, and having all 200 branch managers report to the 3 regional managers. It wasn’t about cost reduction; it was about further unleashing front line management. I ran the idea by branch managers; they were comfortable with empowerment by now and up for it. I assured area managers that there would be opportunities for redeployment. I got BNZ leadership’s OK.

Six months ago, the experiment began. It forced reengineering of business practices. Before, area managers were doing decision making and performing control functions; supervising branch managers; leveraging best practices across branches; and interfacing between branches and regional managers.  We looked at area managers’ checks and balances, which were based on the assumption that branches couldn’t do their own controls, and turned them into exception reports. We looked at things like staffing decisions and gave those authorities to branch managers, which still had to go through corporate HR for processing but didn’t require sign off.

For performance management, we changed from traditional top down reviews to self appraisals submitted by branch managers to regional managers every six months. We assume that regional managers are out there coaching on a regular basis – which means traveling – so there should be no surprises come performance review time. Generally, a regional manager gets 50 to 60 self appraisals and sorts them into 3 piles: ones he is happy with – typically half of them; ones he is not happy with – they call for a talk with the branch manager; and ones he is not sure about – they require a second opinion. For sharing of best practices, we created a whole new role: mentor/coach. Of our 20 area managers, a few opted for retirement and the rest adopted mentor/coach roles: some for people management, some for customer management, and some for sales management. They are available to store managers as a service, for consults, and are used a lot.

It was interesting; simply by interacting with area managers, store managers felt like they had got a promotion. We hadn’t really given them a promotion but we had changed their roles. They now were expected to manage, inspire and lead people; ensure great customer service; understand how the business works; and run it like their own. To encourage that, we changed our renumeration system. If they hit plan numbers for profits, they get a specified bonus amount. Then they get a percentage of anything over that. Of course, that requires financial figures at a branch level, we are comfortable with, something – ironically – banks struggle with given the challenges of accurate cost allocations and margin transfers. We had to improve our internal financial systems.

We were able to implement the new structure in just six months. It was just part of the journey to make our retail network more innovative and customer oriented. Of course, the new approach requires a new mindset and new skills. We provided training but still it’s not right for everyone. Some people decided they were better suited to and happier in different roles. That was fine, and we happy to help them find them.

The Tube comprises a suite of online tools that enables 500-plus employees around the world to collaborate, share learning, and inspire each other as an integral part of their work process. The Tube combines social networking tools such as blogs, wikis, and real-time screen sharing with legacy business systems like HR databases, asset management systems, and e-mail. The system has created ways for individuals to reveal passions and expertise, for teams to learn from each other, for offices to connect more frequently and easily, and for the company to build on shared themes and directions. This led to the design of systems that people actually want to use. Prior to the decision to create the Tube, the team reviewed or tested more than three-dozen collaboration tools and systems. They spoke with leading consultants, technologists, and domain experts in diverse areas such as collaboration, knowledge management, and organizational change. After testing as many systems as possible, we couldn't find any that met the organization's needs and fit within the culture. For example, IDEO’s culture strongly supports collaboration and sharing of information, but several systems are based on the assumption of building credit for yourself by “claiming” information or publishing white papers. The team realized that technology alone does not foster collaboration, and can create nearly as many barriers to collaboration as they enable. This led to a consideration of both technological and cultural incentives that could lead to the adoption of new tools and methods. What followed was a substantial amount of internal research, starting by observing how people work at IDEO, understanding their sources of frustration with current collaboration tools, and getting clarity on what motivates people to share information (or not). Without trying to incorporate “best practices” that would work in any organization, the team crafted a system that works well within the IDEO culture and environment. Based on the feedback they received from sharing their approach with clients and public audiences, the team has learned that the functionality built into the Tube, its ease of use and its intuitive interface, are unique and compelling. Through presentations of the system and the design principles that underlie it, they identified a latent demand for collaboration systems that are both simple to use and fit the culture of the organization they are serving.

The Gore Culture
Bill Gore built the company on a set of principles and beliefs that guide Gore associates in the decision making they make, the work they do, and their behavior toward others. They are the basis for a culture that binds together a worldwide organization.

• Fundamental beliefs: Belief in the individual to do what's right for the company; our organization harnesses the fast decision-making, diverse perspectives, and collaboration of small teams; "we're all in the same boat," sharing risks and rewards and committed to what's best for the company an dits long term success; we take a long-term view, basing our investment decisions on long-term payoff and not sacrificing our values for short-term gain
• Guiding principles: freedom -  for associates to achieve their own goals best by directing their efforts to the success of the corporation, to take action, to come up with ideas, to make mistakes as part of the creative process, to encourage each other to grow; fairness - we each sincerely try to be fair with each other, our suppliers, our customers and anyone else with whom we do business; commitment - we each make our own commitments and keep them; waterline - everyone at Gore consults with other associates before taking actions that might be "below the waterline," causing serious damage to the company

 Bill Gore’s views were influenced by the then new best seller by Douglas McGregor, The Human Side of Enterprise. In it, he defined Theory X and Theory Y as two ends of a management continuum based on very different views of human nature. Theory X, influenced by Taylor’s “scientific management” approach, manifested in the prevalent command-and-control model.  Theory Y, influenced by Maslow’s motivation theories, argued for a new, more participative and empowering model. Bill also was inspired by some of his experiences at DuPont. One revelation was that “communication really happens in the carpool,” (Fast Company) where people could feel free to talk openly without bosses around. The other was that task forces, given free rein to solve a problem, were great at making breakthroughs.

A lattice, with self managed teams
Bill conceived of the company as a “lattice” connecting every individual in the organization to every other. In traditional organizations, it existed as an informal network of relationships underlying the formal hierarchy.  At Gore, there would be no layers of management, information would flow freely in all directions, and personal communications would be the norm. And individuals and self-managed teams would go directly to anyone in the organization to get what they needed to be successful.

 As Gore has grown, it has imposed some structure: the CEO, four major divisions, a number of product-focused business units, and the usual business support functions, each with a recognized leader.  But it is flat, with self-managed teams as the basic building blocks, and no management layers.  It doesn’t have an organization chart, and resists titles. Job descriptions are general and Gore employees generally refer to each other as associates; specific roles are negotiated within teams. Relationships are paramount at Gore, within the company and with customers and suppliers.

How can that possibility work with an organization of 9,000 employees located in 30 countries worldwide?  Gore’s commitment to keeping its operations small and informal is one key. It generally doesn’t allow a facility to grow to more than 200 people. That reflects another of Bill’s beliefs: that once a unit reaches a certain size, “we decided” becomes “they decided.” And it mobilizes its plants into clusters, like the 10 factories located in Flagstaff. Gore maximizes opportunities for cross-functional collaboration by having R&D specialists, engineers, salespeople, engineers, chemists and machinists work in the same plant. Even Gore’s  headquarters has remained simple and intimate: several dozen low-rise buildings built not far from Bill’s house in the Delaware countryside, each housing small, autonomous teams.  As Gore has expanded geographically, email and the like have become necessary. But even so, global teams are brought together on a fairly regularly basis, to build and sustain relationships.

Commitments, not assignments
Gore believes that if you’re passionate about your work, you’re naturally going to be highly self-motivated. It also has not forgotten Bill Gore’s adage that “authoritarians cannot impose commitments, only commands.” So at Gore, rather than having someone tell you what to do, you get to decide what to work on and where you can make the greatest contribution, as part of a team. Individuals at Gore negotiate job assignments and responsibilities with their peers, depending on what a team is working on. You can always say “no,” but once you’ve made a commitment, it’s a near sacred oath. You’re accountable to your team. The negotiating process can be time-consuming, but Gore believes the payoff is worth it, in morale and in the bringing together of the diverse perspectives and talents needed for success.  People are assumed to be multifaceted so they are not expected to devote 100% of their time to one project. Typically, within a few months of joining their first teams, new associates will be encouraged to add a second or third project. The personal challenge: the scope for contribution and the pressure to contribute can be both exhilarating and exhausting.

For a newcomer, especially one accustomed to life in the traditional corporate world, all this can be somewhat daunting. One associate recalled: “When I arrived at Gore, I didn’t know who did what. I wondered how anything got done here. It was driving me crazy.” She also didn’t know how to work without someone telling her what to do, and kept asking “Who’s my boss?”  “Stop using the B-word,” she was told. She also saw that people didn’t fit into pre-defined job slots; they had team commitments that often combined roles traditionally done by different departments. It took a long time to get to know people and what they did, and to earn the credibility and trust required to be given responsibilities. But she did, and eventually went on to become what she calls a “category champion.”  Her experience is the norm. Another associate with 20 years of experience on multiple teams, observed:  “You join a team and you’re an idiot…It takes 18 months to build credibility. Early on, it’s really frustrating. In hindsight, it makes sense.” (Fast Company)

Sponsors and leaders, not “bosses”
Gore’s philosophy is that individuals don’t need close supervision; what they need is mentoring and support.  Each new associate is assigned a sponsor to decode the jargon, demystify the lattice, and circulate him or her among several teams, helping find a good fit between his or her skills and the needs of a particular team. A sponsor makes a personal commitment to an associate’s development and success. As the organization has grown, teams of sponsors have begun to meet annually,  to take a broader look at the possibilities for the associates under their guidance. Associates are free to seek out a new sponsor if they wish.

Gore also believes that leadership has to be earned. It embraces what it calls “natural leadership.” Leaders at Gore gains influence by developing a track record for getting things done, and excelling at team building. They have to be talent magnets. As one associate explained “We vote with our feet. If you call a meeting and no one shows up, you’re probably not a leader because no one is willing to follow you.” Once in a leadership role, that person’s job is to strengthen and make his or her team and colleagues successful. Because Gore associates are involved with multiple teams, they may a leader on one and a regular member on another.  

It is worth noting that Gore remains faithful to its philosophy of natural leadership at the highest level of the organization. When Chuck Carroll, Gore’s previous CEO, retired in 2005, the board polled a wide cross-section of Gore employees asking who they’d be willing to follow. They weren’t given a list of names; they could nominate anyone in the company. One of those employees was Terri Kelly, who had joined Gore in 1983 immediately after graduating from the University of Delaware with a degree in mechanical engineering. To Terri’s surprise, the new CEO turned out to be her.

Teams are coming together, forming, storming, building relationships, and making decisions at Gore all the time. As Terri explained, the challenge of the distributed leadership model is to avoid chaos:

"First of all, there are norms of behavior and guidelines we follow… Every associate understands how important these values are, so when leaders make decisions, people want to understand the “why.” They know they have the right to challenge, they have the right to know why this decision is the right one for the company… [O]ur leaders have to do an incredible job of internal selling to get the organization to move. The process is sometimes frustrating, but we believe that if you spend more time up front, you’ll have associates who are not only fully bought-in, but committed to achieving the outcome. Along the way, they’ll also help to refine the idea and make the decision better." (You can read and hear more from Terri on her MIX Maverick blog and video series here.)

Motivating the “right” behaviors
Gore strives to be egalitarian and performance-driven in evaluating and rewarding people. In most companies, seniority will buy you a raise.  Cosy-ing up to your boss may help.  Not so at Gore. At Gore, everyone’s your boss.  Everyone is ranked by their peers, people who know what they’ve done and how they’ve interacted with others on a daily basis; and their compensation will be based on that. That’s a powerful motivator to contribute. Here’s how Gore’s performance evaluation and compensation system works:

• No specific criteria are provided; people are just asked to indicate who’s making the biggest contribution to Gore’s success.
• An associate typically is evaluated by 20-30 peers and will, in turn, evaluate 20-30 peers. They are forced rankings, from top to bottom, and only for people you know.
• A cross-functional committees of individuals with leadership roles discuss the results, and develop an overall ranking from 1-20 of these particular associates.
•  In setting compensation, they make sure the pay curve is aligned with contributions.

The most powerful manifestation of “we’re all in the same boat” is that all associates are part owners of the company through the associate stock plan. Gore believe that it not only allows everyone to share in the risks and rewards of the company, but also gives them an added incentive to stay committed to its long term success, and always consider what’s in the best interest of the company when making decisions.

A market for new ideas
A seminal moment in Gore’s history came in 1969 when Bill’s son, Gore’s current chairman, stumbled across a way to stretch PFTE into a durable, porous material that subsequently was trademarked as Gore-Tex. That proved it: buttoned-down engineers could be mavericks! Since then, that notion of experimental innovation has been baked into the organization through “dabble time.” All associates have about 10% of their work week free to dabble, to work on an initiative of their own choosing – assuming they are fulfilling their primary commitments. Someone with what they think is a breakthrough idea becomes a product champion, and must compete for talented individuals’ dabble time, to work on his or her project. If he or she can’t rally a team, maybe it’s not such a great idea, or needs refinement. One important point: Gore is only interested in ideas that are “unique and valuable;” not “me too” products.

Gore’s guitar string business is an oft-told example. It got its start when Dave Myers, an engineer principally engaged in developing cardiac implants, put PTFE on his mountain-bike cables for a grit-repellent coating. Pleased with the results, he thought it might also work for guitar strings, which lose tonal qualities as skin oils build up, and decided to use his dabble time to pursue the idea, though Gore had no products in the music industry at the time. Based in a grouping of ten plants, he pulled together a team of volunteers that spent the next three years working on the idea, without ever seeking formal endorsement. That required finding low cost ways to experiment. They hit pay dirt with a string that held its tone three times longer than the industry standard. Today, Gore’s ELIXIR guitar strings outsell competitors’ two-to-one.

In recent years, Gore has formalized the process somewhat, while remaining open to all new ideas. After the dabble stage, the development team periodically undergoes a three-stage, cross-functional review process called “Real, Win, Worth.” Is the opportunity real? Is there really somebody out there that will buy it? Can we win in the marketplace? What do the economics look like? Can we make money? Is it unique and valuable? Can we have a sustained advantage, say, patent protection? (Fortune) There is no predetermined timetable; the focus is on giving product champions time to experiment and learn, and taking small risks rather than betting the ranch too early. It’s a way to organize for innovation, rather than plan for innovation, with a long-term view.

It’s worth noting that Gore’s tenacity to bring ideas to life has caused it to stretch beyond its core technology competence to develop marketing prowess as well. Intel’s “Intel Inside” computer stickers essentially copied Gore’s Gore-Tex branding of the laminated fabrics it sells to apparel manufacturers. And when consumer products manufacturers were disinterested in its technology for a superior dental floss—for 20 years!—Gore took Glide to market itself. It built a following by giving free samples to dentists and hygienists, who passed them along to patients; an early example of viral marketing.

Is Gore a good fit for you?
That’s the question Gore asks prospective employees, because that’s what it’s all about, bringing in and then nurturing talented individuals who can thrive in the Gore culture.  Gore is careful about who it hires, and those hires end up being a fraction of a percentage of applicants. As one Gore associate explained: “Gore is not for everyone. Our process for finding the right talent involves a certain degree of self-selection, which means we want job applicants to have enough information to decide that a career at Gore may not be the right fit after all.”

In 2009, the company unveiled a “Join Gore and Change Your Life,” a global brand campaign designed to attract potential job applicants and build a talent pool for the future. Its foundation was a career microsite (gore.com/change-life), and it also included print and online advertising, job boards, niche websites, and college career platforms. The site asks potential applicants to ask themselves eight questions, to honestly evaluate if the qualities Gore is looking for apply to them:
              Do you…
              1. Experiment with different approaches or solutions to problems to improve the way things are done?
              2. Challenge traditional thinking and identify creative approaches or solutions?
              3. Maintain a high standard of performance in uncertain or unstructured situations?
              4. Work effectively with others who have different perspectives, talents, backgrounds, and/or styles?
              5. Assess your personal strengths and development needs and take responsibility for creating your own development plan to address them?
              6.  Voice differences of opinion openly and directly?
              7.  Actively promote collaboration, cooperation, and teamwork to ensure the best business results? 
              8. Encourage and help others to grow in knowledge, skills and scope of responsibility?

The site also provides an inside look at Gore by sharing testimonials of Gore associates and their work on three successful projects.  Each story features a product innovation that changed the world in a positive way:

• Join Gore and change music: The ELIXIR strings story… inventing a new kind of guitar string
  Imagine a job where you can follow your passion and apply your knowledge to develop a revolutionary product in a new industry for your company
• Join Gore and change lives: The GORE HELEX Septal Occular story… inventing material to patch human hearts
  Imagine a job where you can apply your technical know-how to create a new product that changes and saves the lives of others
• Join Gore and change industries: The CROSSTECH Fabrics story… inventing material that protects firefighters from heat, flames, and hazardous materials
  Imagine a job where you can immerse yourself in a highly specialized field to change an industry – and improve the protection and comfort of those who save lives

Each story is presented from the perspective of different team members, who have varied backgrounds and play complementary roles on the projects. Their testimonials offer a personal perspective on working at Gore, including explanations of why it’s a good fit for them, and how they get satisfaction from it. 

Not surprising, hiring decisions at Gore are made by a small team of associates. The team typically includes people the candidate would be working with day-to-day as well as leaders and others with experience in his or her field. One individual, interviewing for a quality engineer position, described his session as friendly with a lot of behavioral and technical questions. Asked what design changes he would make to fix the problem of a diving board that bended too easily, he found himself drawing diagrams and graphs to explain things.

1. Rip apart the traditional performance review

We've replaced the traditional performance review structure with a more lightweight, continuous model.

2. Stop paying individual performance bonuses

Instead, we gave everyone a salary bump. Similar to Netflix's approach, we prefer to pay top market salaries rather than bonuses. However, we continued to pay an organisational bonus like before, so people will share in the company's success. Also, we've recently given every staffmember stock options so people will benefit from the company's growth/increased value over time

3. Create bite sized chunks

The thing with our traditional review was that, despite good intentions, it focused mainly on two sections: the manager rating and the employee's weaknesses. This makes total sense as the first thing a person will be curious about is their rating (which also affects their bonus). Even if a person receives a "good" rating, most of the time will be consumed by justifying why the person didn't get an "outstanding" rating. We wanted to introduce a lightweight and continuous model of conversations designed to remind people to - every now and then - talk about topics other than daily operational stuff. We changed the following:

• All sections should receive equal attention. We think that the 360 review feedback can better be discussed in a separate conversation. Same goes for performance ratings, strengths, weaknesses and career development, etc.
• We split the sections into separate conversations with their own coaching topics. Every month we allocate one of our weekly 1:1s to a coaching topic.
• We created conversation guides to help everyone stay on topic, and to supply tips and tricks on how to facilitate the conversations.

3. Performance still evaluated - with some crucial changes

We think it's important not to shy away from giving honest performance feedback. Some 'anti-performance review' books suggested skipping that altogether, but we think it's a invaluable element in every manager/employee relation.  In two of our monthly conversations, managers will still check in with their reports to evaluate performance. However, we make a few crucial changes:

- No 'exact rating'
We prefer people not to concentrate on the exact rating definitions, but rather on having a good and honest conversation on how they have gone in the past 6 months. However, there will be no rating on a numerical scale. Instead, during in the check-in the manager indicates roughly how often their report has demonstrated exceptional performance.

- Two Axis
In addition to an evaluation of performance/achievements, we've added the scale on 'how often you have stretched yourself'. Put simply, the reason for using both scales is to acknowledge both effort and results. Two people can both deliver similar results, yet one of them has solely focussed on their normal work responsibilities whilst the other person has really injected extra energy in improving things outside their normal job (e.g. themselves, their team, etc) which has made a real difference to Atlassian. Feedback from Atlassian managers was that they wanted to acknowledge this.

- Focus on frequency of behaviours
The scale from 'never to always' helped people focus the conversation on how to improve the frequency of certain behavious, rather then focussing on a number.  Recently, I shared this idea with the cool team of Sonar6 who translated this in a blogpost in their usual colorful way. Both staffmember and manager will decide on the person's position on two scales. When the a certain position on the axis is chosen, the logical subsequent question is: "why didn't you position this person more to the left or right, higher or lower?" This approach also encourages a better coaching style review conversation.

The Innovation team was created to address several concerns expressed by our CEO. His vision was that this team should encourage an innovation culture, along with its processes and practices across all CEMEX, through the collaboration among all business units and functions. This would lead the company to new business capabilities and adoption of best practices.

To do this, multidisciplinary networks were created to address key company-wide initiatives, supported by the Innovation team. Led by and initiative and executive leaders, a diverse group of people from different areas, operations, and countries came together to collaborate and solve the challenges set by the CEO and Executive Committee. Through their formation, planning, and collaboration, the Innovation team provides the support necessary to foster new collaboration practices for each group.

Today, a change in the company’s practices is happening—encouraging collaboration across all business units and functions, leveraging the knowledge and experience resident in the diversity of the CEMEX worldwide workforce, and generating new value for our customers.

To support this change in practices, CEMEX has introduced an internal collaboration platform called Shift, designed to help make the company more innovative, efficient and agile by letting employees or groups of employees with similar objectives share opinions, thoughts, information, experience, knowledge and best practices. It combines some of the best elements from popular social networking platforms, but it is far more than a mashup of Wikipedia and a content aggregator, and document repository.

CEMEX designed Shift as a social network with a business focus. When employees use Shift, ideas, suggestions, and recommendations bubble up across the network. Communities of interest are formed to tackle challenges common to their locations, markets and skill sets. Projects can move forward without the barriers posed by traditional hurdles, such as over-reliance on e-mail and live meetings. The payoff is lower cycle times, faster time to market, and real-time process improvement. Shift is ultimately designed for a new kind of workforce, one that is mobile, global, and empowered.

Today, after just 18 months of using Shift across the company and changing the way we work together, CEMEX has proven that by leveraging its collective talent and skills, more value can be produced more quickly and effectively.

One example of the way this change in practices has profoundly altered the way the company is managed is in the case of the “Construction for the XXIst Century Community.” This group of about 400 members was challenged to come up with the strategic topics that the company should focus on to remain an important part of the construction industry in the XXIst Century. This is a departure from the way such strategic topics were addressed in the past, where the company’s top executives would get together and determine the company’s strategic objectives, and then issue a directive from the top-down.

The leaders of the Construction for the 21st Century initiative along with members of the Innovation Team worked together and proposed many ideas and action plans on how to tackle this strategic challenge. Leaders along with Innovation team members identified potential profiles that matched the needs that the challenge required and addressed the objectives, and relied on country managers to identify potential candidates to participate in this initiative. Also, they contacted experts located in central strategic business units to seek for their help in the initiative, and in finding more people interested to participate. Finally, an open invitation was offered to all employees, where those who were interested and believed that they could add value decided to join. 

When all members were together in a virtual community, a welcome message was launched to invite them to participate in defining the agenda, as well as the strategic topics to be addressed. Enabled by Shift, the community members from all levels of the company, started to collaborate in analyzing the industry, the macroeconomic situation, the trends, and challenges that the company would likely face in the future. In a social, collective way, the community posted, voted, discussed, and eventually decided the 10 strategic topics for the company to focus on:

1. Sustainability Credentials and Certifications

2. Regulations for a Better World

3. Promoting Concrete as a Sustainable Material

4. Waste and Recycling materials

5. Energy Efficient Buildings

6. Housing for all

7. Construction Solutions

8. Urban Integral Solutions

9. Country Roadmap

10. Sustainability-Focused Market

Having done that, leaders for each topic were defined collectively based on all members’ decision and input in a democratic, yet strategic manner. Also, along with leaders, a group of experts was assigned to each particular topic which would be a main focus, but would also serve as support for all other 9 strategic topics.

Today all of these topics are considered a priority in the company’s day-to-day activities as well as in long-term plans. Examples of how these 10 strategic topics were embedded in our organization are the following:

• Development of a carbon footprint tool (First in Industry to measure and disclose carbon cement contents of key products)
• Global green brand and identity to market our products
• Top and middle management training in climate change and implications on market requirements
• Industrial ecology methodology for further application in CEMEX plants
• Definition of business model to recycle construction materials from demolition
• Development of best practices for energy and water efficient buildings
• Development of a construction system of houses for the “base of the pyramid” as well as financing solutions with a sustainable focus
• Documentation and awareness of certifications and credentials and pilot testing of new regulations
• And more…

Ready Mix Products

Another example is the development of a Ready Mix special products catalogue and the important discoveries and developments it led to. The challenge was to gather all the different products that the company develops in this business line, especially after some acquisitions, to gain visibility of all products, benchmark the best ones and share them across all operations.

The first attempt to do this was made in 2005, with a traditional, top-down approach to management. A team with a leader would travel to different countries to obtain the necessary green lights, and then send a team to collect the relevant data to form the catalogue. This proved to be an impossible task that failed due to its highly bureaucratic, and mandatory approach.

In a second attempt, a community was created in Shift where all our operations were invited to post and share their special products, with their characteristics, technical specifications, production process, marketing strategies, etc. By making this a transparent, open, social endeavor, instead of a top-down bureaucratic process, participants were easily encouraged to participate. Everyone wanted to share the good things they were doing in their country. Now that the catalogue is up and open to all, it is a constant work in progress that can regularly be updated as products are added or removed from the market.

With the achievement of this goal, a new level of visibility of all the company’s products was now available. This led to an important discovery that would not be possible otherwise: The company was producing many products with the same characteristics in different countries but they were being sold with different names and under different market strategies. This meant a dilution of our brands and a waste of valuable resources.

This prompted the company to develop the first ever global brand, called Promptis Ready Mix, that would leverage economies of scale, lessons learned, and a global brand presence. This is the first of many such products to be launched worldwide by CEMEX. Our next challenge is finding a way to bring these products to market faster and more effectively.

In this initiative, a new management style emerged, where transparency was encouraged and expected of peers. This new collaborative and coordinated global system leads to best practice sharing and development of new technology in ready mix admixtures. Special products (which are characterized for being manufactured for a particular client with particular needs at a premium price) where effectively shared in a worldwide basis and studied by experts. Also, all business units have now active communication and collaboration with Research and Development labs located in Switzerland and Mexico thanks to Shift. Resources are being made available to all CEMEX members of the initiative. The support by the R&D labs has been also informative developing a series of open invitation to all employees in webinars where they were explained how these labs worked and what is CEMEX currently working on in an transparent manner, opening a space for Q&A while also documenting the lab tour online for those who require further reference. Direct contact with experts is available for those who seek support and know-how sharing, and experts are constantly communicating and sharing best practices in Shift.

Among the benefits found in this initiative we have seen the following:

• Launch and development of our 1st global ready-mix product (PROMPTIS)
• Constant interaction among countries in a web-conference fashion and documentation of conversations to keep everyone informed
• Monthly update reports in video format
• Development of virtual companies located in the cloud to work collaboratively with an open innovation methodology in a particular challenge of the initiative
• And more…

The Social Business adoption initiatives at IBM are successful precisely because they draw together individual influencers from all areas across our global organization who have a passion for engaging in social collaboration. While the tools and environment certainly existed where these passionate users were involved, it took a deliberate approach to bring them together, build a common goal, have common activities and imbue a collective presence and reputation across the company.

To get a feel for the amount of online collaboration activity that occurs behind the IBM enterprise firewall today, we have: 

• 630,000 user profiles and identities (including all employees and contractors)
• 74,800 communities and user groups
• 105,000 bloggers inside the firewall
• 1.3 Million shared social bookmarks
• 203,000 shared or team acitivities
• 475,000 files shared and 9.5 Million file downloads
• 50,000 wikis and 38 Million wiki page views
• 50 Million instant messages sent every day
• 30 Million minutes of web conferencing a month

This high degree of activity and adoption follows the growth of the BlueIQ Ambassador community of volunteers over the years since 2007 as well (Please see the image attached in the Materials section at end of this Story). In particular, note that we are looking at regular (meaning weekly) habits among IBMers beyond the passionate volunteers of Ambassadors as the indicator. Also note that the growth has continued without the need for a linear growth in volunteerism. In other words, there is an enduring effect inspired by the passion of the volunteers that continues to spread across the company. 

The benefits are most visible in the human impact of the success stories of how individuals and teams are finding their own ways to overcome large-scale bureaucracy through direct social collaboration. Our employees document their own collaborative successes in an internal blog while the BlueIQ program team intentionally scouts for stories by role and region. To date we now have over 200 success stories ranging from how individual employees discovered new ways to collaborate to entire teams teaching themselves and others how to work together across multiple regions and projects.

Within the following stories, we see the ways employees are discovering balance in how to develop their own networks of natural hierarchy within the masses of IBM globally. We also see how they are achieving their specific business goals, and how, through these stories, they become inspirational models to follow:

• One fundamental change in how our executives communicate direction to all employees in their organizational units is a shift from sending out broadcast email to interacting in online communities. These communities also serve as way to accelerate enablement and training to employees beyond traditional mechanisms and into social and peer-to-peer learning.  

  For example, the IBM Collaboration Solutions (ICS) Sales community is the centerpoint for an ICS Live Social program engaging salespeople to collaborate and participate in social networks and highlight their successes. The community hosts regular conference calls with the VP of ICS Sales, and allows sales representatives to continue the conversation online even while they travel. Salespeople use the community as a way to bring questions to each other around common issues or tactical objectives. 

  The ICS Sales community initially consisted of only the employees directly reporting to the sales executive, but has since expanded to twice its size since launch, drawing members from across IBM. This expansion continues helps reach across silos in different departments, expanding the value of the community beyond its original intentions. 

  Use of the community to communicate information reduces the need to schedule meetings and discussions among a population that is by design worldwide in many time zones, and facilitates consistent direction for the worldwide sales team on sales goals, business offerings, and team achievements. Sales people gain time to focus on their work.

  Across IBM this same model of communities per organization unit or department repeats many times over. In the IBM Collaboration Solutions organization, for example, the General Manager of ICS has a community for the entire organization, and in turn, each executive in Marketing, Sales, and Development for their business segments.  These communities reach beyond the boundaries of the organization by influencing other areas of IBM such as HR, CIO, Services, and other Software brand organizations. This cross-silo operation radically reduces the number of communications and improves accuracy of those messages, as well as allowing transparency across each executive’s common themes and messages. 

• At two locations in IBM India, there are more employees than available in-office seats, due to some employees working remotely.  When remote employees would come into the office, they wouldn't know whether an empty seat meant someone was out of the office or not. The employees needed a system to help identify open seats in which room and building on what day. 

  Rather than adding a bureaucratic layer to manage these logistics, the employees use the IBM Connections Activities tool to allow individual users to identify when their seats are free, and allow others to respond when they would be using it. This logistics issue was solved through an ad hoc social process created, operated and self-managed directly by employees, without the need for software developers to build a tool, or the approval of their managers.

• The IBM HR Center for Advanced Learning (CAL) worldwide team needed to coordinate their day-to-day tasks, how they allocate team members to different projects and tasks, on-board new talent, and keep each other informed on their diverse activities. They use a wiki to:
  • Welcome new team members
  • Provide an overview of what the team does
  • Set expectations
  • Share information on portfolios, business units & projects
  • Maintain a list of thought leaders
  • Share templates, important links files, job aids, tips and tricks
  • Provide information on team calls, including agendas and notes
  • Collaborate and discuss

    In this way, several dozen people on this team asynchronously help themselves to training and practical need-to-know basics, and even dynamically adjust how they work.  The wiki reduces or eliminates the need for micromanagement of employee-to-project allocation, and developing individual talent.

    This is a commonly repeated model across many teams in IBM, moving from traditional management meetings and cadence calls to teams that self-manage and self-document their coordination among the their members and roles.

• Another team created their own external community to collaborate among over 200 marketing executives, agency partners, and marketing professionals.  They simplified project management and coordination across multiple partners and IBM contacts.
• A VP of sales described how he saved himself over an hour each week by consolidating the different ways he communicated with his direct reports of sales managers and operations people. They are now expanding this practice to other roles and members of his sales territory.
• A Swiss technical sales manager encouraged his team to construct all their RFP responses using IBM Connections Activities, which allows his team to quickly bring together and train experts for short-term work. Having this information at their fingertips helps them address customer critical situations rapidly, thereby improving customer satisfaction.

• “I've been recommending the BlueIQ lunch and learn sessions to the New2Blue folks - new IBMers right from college, from acquisitions, from other companies, and more. Many of the new IBMers are living in places in the world where there are no IBM locations and few if any other IBMers. They need our help more than anything. By bringing our social computing ways of working to people when they're brand new to IBM, they are more apt to develop the good habits of working in this way. They're also more easily able to network with other IBMers - a great skill to have as a new IBMer.” -- in HR

• “ I have a very specific example that enabled us to support our client. They asked for help with an internal newsletter [which] had to be in Lotus Notes format and look great …; when the newsletter was released, I saw the note from the client CIO saying how good it was. BlueIQ helped us deliver a fine product to our client” -- in Sales

• “I have gained value on so many levels from the BlueIQ (Ambassadors) program! This program has helped me with my journey of changing the way sales does business … to convince sales management that social software really does dramatically impact productivity of all sales rep roles. The ibm.com inside sales mission is focussed on leveraging innovative touch-points. The BlueIQ Ambassadors Community has been an invaluable source of information to help sellers get a better understanding of how they can utilise social media tools to help them become more productive in their own roles but also in providing insight to their own customers on better ways of doing business” -- in Sales operations.

In 2011, the passionate BlueIQ Ambassador community had grown to over 1600 volunteers. They held over 160 different events across all IBM worldwide business units to educate each other and share their passion on how to collaborate. In addition, they have also held 50 community events to meet and interact with each other as well as other IBMers, energizing and reinvigorating their own energy. The fact that they engage in such activities on their own volition, without needing permission or requiring formal direction to do so, describes a high level of passion across this worldwide group.

The degree of active participation in our social collaborative online environment has grown from 11% in 2009 to over 40% of our salesforce in 2011. This represents the highly active users who have grown accustomed to interacting over this online medium on a weekly and monthly basis; on the broader level over 66% of all sales roles are now using this environment. Among the marketing roles across the global organization, similarly active participation has now grown from 9% in 2009 to 35% in 2011. This rise in global participation among the client-facing roles again is a leading indicator of how social business is faring across IBM.

Furthermore, in 2009 based on analysis of our internal social activity metrics, we noticed obvious growth in North America and Western Europe but rather missing activity in where IBM was placing its own efforts: in the growing markets in Asia Pacific and Latin America. We needed to shore up the communities in major countries of China, India, Japan and Australia, and help individuals in those countries become influential in the global IBM social collaboration environment.

We then launched regional efforts in these countries to find local Ambassadors who would be willing to drive participation in their regions and give direct assistance. Through that effort we were able to increase participation from an average of 5% of the population to nearly 35%, a many-fold growth in the community and in individual influencers in these regions.

 

What we now recognize is that this growth in active participation is one dimension of a degree of maturity in Social Business. To understand the other dimensions, please take a look at the presentation and video in the materials section titled Social Business Maturity Changes How You ____. It gives additional insight on other areas of maturity beyond adoption and program management, such as the maturity of our conversations about the topic itself, the maturity in the qualities and actions, and in value creation. 

Beginning the Process

First, leaders from across the organization worked together to develop an overall framework, identifying several areas both internal and external that we thought made sense to explore in more detail. Some examples of the types of areas we explored include the business model, operating model, technical vision, and commercial model for the organization. Then we brought in an experienced facilitator, Joe Anglim, to help everyone through the process.

We next recruited members of the leadership team to sponsor the exploration teams. All of the senior leaders of the organization were involved, and the team leads included executives like our CIO, VP of Operations, VP of Services, and VP of Marketing, among others. But rather than naming the "usual suspects," we asked leaders to step out of their comfort zones and lead efforts far removed from their daily responsibilities. For example, the head of the "People" team was asked to analyze the financial model of the company and the CFO was charged with exploring design and operational system enhancements. By setting it up this way, it wasn't just top leaders learning, but all of us.  Senior leaders gained perspective and understanding of worlds they'd never spent much time in before.

An Open Approach to Communications and Engagement

From the beginning, we put engaging with our associates ahead of communicating to them. The entire company needed to own the strategy if we wanted to see it implemented. Associates needed to be an integral part of developing and implementing it. 

We looked for any and all chances to engage our people in a dialog, to start a lively discussion about our strategy at all levels within the company.

We also decided it was worth setting up a specific cross-functional team--a strategic internal communications team that included representatives from our people, brand, internal communications, and IT teams.  This helped us ensure we didn't take our eye off the ball. 

We built an internal wiki that leaders of each exploration team used to organize their thoughts and ideas out in the open where any employee could make comments or suggestions. Anyone who was particularly interested could read about the progress, and add their ideas or volunteer to help (and many did).

This information-gathering dialog lasted about 5 months. We communicated our progress along the way through regular updates at company meetings, through email, and on the Intranet. The strategy team leaders posted status updates to the wiki and replied to comments on their team's internal blog. Jim hosted a company-wide online chat session where associates could ask him any question they wanted to about the strategy process (or anything else that was on their minds), and team leads communicated key updates through company-wide announcements and discussions.

The leaders did as much listening as they did speaking on the topics. Thinking evolved as part of the process. For example, in the business model exploration, we started the conversation by talking about a defensive differentiation strategy that would halt our competitors progress, but quickly realized that focusing on ideas for how to create more value for our customers through the products and services we provide would yield even better, more compelling (and more sustainable) results.

Synthesizing the Ideas

Red Hat employees generated ideas--LOTS of ideas. In fact, they generated more than we knew what to do with. Many of these ideas were developed within the working teams and vetted via the wiki, but on other occasions, ideas from the broader associate base were incorporated in the thinking as well. Not every idea could bubble up and become part of the strategy effort, but the best ones did and spurred a lot of great dialog.

For example, it became clear that we needed to take another look at the mission of Red Hat (a process Jim Whitehurst wrote about for the MIX here) to make it more specific and easier for employees to rally around.  Jim formed a team to take on this task, and this team engaged the entire company in its development.

In another innovative example, the technology roadmap team not only engaged the best minds from within the organization to uncover ideas, but also pulled in the open source development community as well. We utilized existing networks in the open source community to "keep our minds open" and socialize ideas outside of Red Hat. By giving members of the external community an opportunity to weigh in, we not only were able to identify new and next generation technologies very early, we allowed an extremely important set of people into our process, increasing their understanding and appreciation of our direction. 

By involving the larger open source community, we were able to gauge the reaction and study the ramifications of particular strategies, thus minimizing unintended consequences of those decisions. We even discussed potential strategies with the leaders of other organizations so they could understand our goals and help us work through ways that we could achieve them while not undermining the goals of the larger community.

The process to this point did a great job of coalescing market and customer insights, and identifying areas of opportunity, and some very clear themes began to emerge. But we knew deciding how to execute against these strategies was the next challenge, so it was time to shake things up.

Driving Accountability into the Organization

As I mentioned previously, each initial group had been led by a member of the senior leadership team. But now that we had highlighted our key areas of focus, we wanted to give people at more levels in the organization the freedom to decide how we would tackle the priorities.

We built entirely new teams around our new areas of focus, this time headed up by leaders a level removed from the senior leadership team. They, in turn, tapped the people with the most knowledge and the most interesting ideas to take charge of actually developing the strategy and plans in each area. True to the spirit of the Red Hat meritocracy, the people who were charged with actually developing the strategy and plans in each area were those who knew the most about it and had the most interesting ideas.

We designed a new communications plan for this phase, including creating an iconic diagram that we'd use over and over when leading conversations about the strategy process. This diagram worked like a "You Are Here" map that would show people where any discussion might fit into the overall strategy. We wanted to ensure that each associate understood how his or her work fit into a larger vision.

These groups took the major strategic themes and ran with them, building strategies and plans to execute on our new priorities. But where in most strategic planning projects, these teams would be asked to build strategies and plans and then bring them back to the leadership team to make decisions, we left accountability and responsibility in the hands of the people who knew the most--those who were doing the work.

This had three key effects: First, putting the responsibility for developing the details of the strategy in the hands of the people charged with implementing it--rather than handing down a fully-cooked plan--generated more creativity, accountability, and more commitment. By allowing the strategy to be developed at the same level in the organization where it would be executed, we empowered those who would have to implement the plans to control their own destiny. By giving them the freedom to develop the plans the way they saw fit, we increased their accountability for the end result.

Second, by leaving the responsibility for deciding what should be done deep within the organization rather than bubbling things up to the senior executive level for every decision, we avoided the typical 50,000-foot oversimplification of the strategy that so typically occurs in these projects. Much of the work Red Hat needed to do against these strategies was complex and nuanced. By letting people who understood this make the decisions, we were able to ensure the right plans were developed with the best information available.

Finally, by leaving it in the hands of the people who were working with these issues on a daily basis, we improved the flexibility and adaptability of the strategy. As new opportunities emerged or changes in the market occurred, the team was empowered to make changes real time rather than having to go back to the senior leadership team for approval. While the overall framework and initiatives stayed the same, each individual group had the ability to ensure their plans were current and agile. This was not simply a strategy planning team, it was the strategy execution team as well.

You won't be surprised to hear that there were times when we required that the whole company shift its thinking, and in these situations, the leadership team--and Jim in particular--stepped back in. In one instance, a strategic theme was not well articulated and was being misconstrued by many within the organization. Rather than sticking with it as originally envisioned, we renamed and repositioned it so that it so that it could be better understood and more inclusive of all of the tactics being implemented by multiple groups.

Executing the plan

In all our combined years of conducting strategy exercises Jim and I have never seen an organization follow through on its plan over a three-year period like Red Hat has done.  The framework, initiatives, and themes have remained intact--with every employee understanding the strategy and how they personally fit into it.  The teams have continued executing and adapting.  We've monitored key metrics along they way. 

Every team has made significant progress, and in some cases, people's "day jobs" have changed to give them even more time to directly work on executing against the strategy.

Since we started this process in 2008, Red Hat has been executing more efficiently on its best opportunities, and it shows.  Red Hat has grown from a $400 million revenue company to an almost $1 billion company and the stock price has more than doubled.

As I write this, we are beginning to address new opportunities to compete in a quickly evolving enterprise infrastructure space that we would not have been able to address in the past. As we execute systematically against our current opportunities, we have provided ourselves with more freedom to begin thinking about exciting and different opportunities for the future.

Refining the concept
By the summer of 2008, we were refining the concept. Like Topcoder, the basic idea is to run collaborative contests where each project is broken down into pieces, and people compete for cash, with a panel of judges picking the winners. For our projects, the phases in the creative process are submitting an idea, making a pitch that expands on the idea, and developing the video itself. We added a few extra twists too. The contest process, and incentive system ended up looking like this:

1.  We announce a contest on our site.  Deadlines for each phase are posted on a project calendar.
2. A member – they need to register first – submits an idea. The best 5 ideas advance to the next phase, and their authors get a cash prize.  They also earn a percentage of the prize money their submission generates in future rounds.
3. Members can submit pitches for any of the ideas. The best 5 get a cash prize and advance, and earn percentages of future awards, as merited.
4. Members submit videos for any of the pitches.
5.  Judges review video submissions and select the top five, for cash award.
6. Members also can the view the submissions, and predict winners. The viewer whose top 10 predictions most closely match those of the judges get cash.
7. The most watched video – which can be embedded anywhere but must be seen via the Tongal player and cannot be a YouTube hit – also wins a cash prize.
8. Clients get 5 video products as part of their subscription, but can have additional items at extra cost.

By breaking creativity into smaller pieces, we allow people in all walks of life to compete. For example, a mother in Iowa probably isn’t about to move to New York to join an ad agency. And she may not have the skills or time to create a video for a consumer product that she uses every day, but she can, at the very least, throw her idea into the collective hat – she should, she’s the loyal consumer – and allow the brand and her fellow consumers to hear her voice. And she can have some fun! She can be part of a community, play in a contest, and get some recognition for her contributions. Even if she can’t come up with an idea, she can be a voice in predicting the results of a contest for her favorite product.

What differentiates Tongal from traditional outsourcers is that it’s not an open call for work; it’s a forum where people with different skill sets can collaborate. The predictive element of our contests also sets us apart.  We actually have filed a patent on it, as an analytical and decision making tool. Its power is that it takes personal preference out of decision making. It’s like the NCAA Final Four; even if you hate Duke, you’ll vote for them if you think they’ll win.

That brings us to a question we often get: “What the heck does TONGAL mean?”  It was inspired by a book published in 2004 by James Surowiecki called “The Wisdom of Crowds.” The book begins with an anecdote: In 1906, in Plymouth, England, statistician Sir Francis Galton attended a country fair, intending to prove the “madness of crowds,” or that crowds lacked intelligence and were prone to delusions. To his surprise, he observed that when guessing the weight of an ox, the average of the crowd’s guesses was more accurate than that of any given individual. TONGAL is an anagram for GALTON.

Developing the platform and putting it to work
We were trying to create a community. The Tongal site only existed to support the community; it was the scaffolding. Through TopCoder competitions, which we began in late 2008, we created the look of the site; built the website pages, voting systems, and the video player, writing the software to manage membership registrations and for members to submit their work; and ran bug races to identify and resolve any problems. We integrated it into Facebook so people don’t even have to navigate to tongal.com. Lots of clients have dedicated a lot of time, money and energy to build a Facebook following; now they can give them something to do, and a way to be productive.

We figured we could leverage our personal networks to attract the first members and companies. We were still in beta – open to invitees only -  when we ran our first ever contest in May 2009. It was for an original parody or spoof commercial for Comedy.com, with a $2,500 prize. In June, we were startled but thrilled to get reviewed by PCMAG.Com. We ran a few of our own contests, to develop an elevator pitch and “who we are” video for Tongal. Word began to spread.

Launch, learning and growth
We officially launched summer 2009. Our pitch to clients was that not only could they have access to more talent, we’d be engaging hundreds of consumers in creating ads for their brands. They also could achieve significant cost savings. The cost of creating a 30 second ad is $500,000 or more; we figured we could do it for as little as $5,000. Plus, it costs another $130,000 every time an ad is aired on prime time TV. By making creative development an on-line contest, the ads get permeated throughout the Internet. And clients can still air the ads on TV if they want to, of course. It wasn’t an easy sell. We had to explain the basic crowdsourcing concept; we didn’t have much product to show; and corporate marketers were nervous about straying from their ad agencies. But by the end of 2009, we were running four client programs.

We got a special boost early in 2010 with a project for Kiva, a nonprofit organization that fights global poverty by enabling people to make small loans to low-income entrepreneurs who are supported by microfinance institutions around the world. Kiva wanted an inspiring video that would not only explain the loan process but also raise awareness and attract new lenders to kiva.org. The winning video, developed by a Tongal member in Sweden, was featured on YouTube’s homepage and accumulated over 100,000 views in 1 day. By July, we had run 22 contests total, with prize purses as large as $15,000.
 Newer clients tended to be more sophisticated; we didn’t have to use the crowdsourcing presentation slide as much, and some were interested in using our tools for problem solving or product improvement. 

Meanwhile, our community has become as diverse as we hoped it would. Our members range from teenagers to 45+. They are 70% male and 30% female. They are US based (87%; all 50 states) and international (13%; 40+ countries). In just one month, we had visits from 125 different countries. This is a huge factor is our ability to offer diversity in our product, and a global market perspective.