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Avaya: Culture Transformation through Alignment

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Counterproductive behaviors carried over from Avaya's heritage created challenges for their future growth. In 2008, the organization undertook a culture transformation initiative to align their …

Counterproductive behaviors carried over from Avaya's heritage created challenges for their future growth. In 2008, the organization undertook a culture transformation initiative to align their values, systems and processes to great results.

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  • 1. Volume 6, Issue 2, 2011 casestudyAvaya: Culture Transformation through Alignment Sometimes to With these expansive changes, have come incredible understand an challenges. When Avaya began in 2000, they were organization’s culture, cast off as the “ugly stepchild” from Lucent. Since you have to understand then, they’ve experienced five different sets of layoffs,where they came from. Avaya is a global leader in four CEOs and a complete turnover of their Executiveenterprise communication systems providing unified Committee. Staff has been reduced from 35,000 tocommunications, contact centers, data solutions and 18,000 while the workload has remained the same.related services directly and through its global channel These changes have taken a toll on the remainingpartners to leading businesses around the world. The employees and the culture of the organization by creatingproduct of AT&T and Lucent, Avaya’s mission is to enable some counterproductive behavioral patterns needed totheir customers and clients to excel by providing them capitalize their new market position.with the best communication solutions possible. Avayahas over 10,000 Partners, 32 global delivery support Breaking Bad Behaviorscenters, 18,000 employees and operates in 55 countries. Roger Gaston, along with Steve Fitzgerald, Vice President of Human Resources, were integral in leading the chargeUnderstanding Avaya’s Roots to transform Avaya’s culture. They began their journey inOver the last decade, Avaya has dramatically repositioned breaking counterproductive behaviors in 2007 by helpingitself in the marketplace going from a communications the organization identify the kind of culture it wantedprovider of phone and voice hardware to a full business to have. “From a strategic point of view, Avaya knowscollaboration provider offering integrated voice, video, where it wants to be. The key for us was knowing whereweb, multi-media and more (PBX to VIOP to Unified we were starting from, understanding the gap and thenCommunications to Business Collaboration). They have working to close it,” comments Steve Fitzgerald, Vicegrown in capability and in reach through organic growth President of Human Resources. To understand theiras well as acquisitions. Partnerships with organizations current culture, they used the Denison Organizationallike Motorola, Polycom and HP have allowed them to offer Culture Survey to assess their baseline culture in 2008.“best of breed” solutions to their customers. Numerous Their goal was to identify the roots of the culture, theacquisitions have helped them accelerate their technology stories that kept it there and those behaviors that neededofferings in contact centers, unified communication, be changed. Based on those initial survey results, as wellconferencing and collaboration markets, and to expandgeographic reach in EMEA and Asia Pacific. They havehad enormous success repositioning themselves in the “Over the course of themarket place, however, that repositioning did not translate last two years, we’ve madewithin the organization. “We were driving the technologyto the outside world but not driving the changes needed progress in just about everywithin the company, and thus a great need for a culture one of our fundamentaltransformation became apparent to us,” comments Roger financial metrics...”Gaston, Senior Vice President of Human Resources. Roger Gaston, Senior Vice President of Human Resources All content © copyright 2005-2011 Denison Consulting, LLC. All rights reserved. l www.denisonculture.com l Page 1
  • 2. as additional qualitative data, they began working to close • There is a place for risk-taking innovators with athe gap and transform themselves to reinforce only compelling idea or argument that is “against the grain”the desired behaviors. • Those that are fact-oriented, direct, results-first, execution-oriented risk takers tend to like our cultureThrough the survey, feedback sessions and observations mostcoming from all levels, functions and geographies of theorganization, they learned some very important things “This roadmap came from a very quantitative andabout their culture. Things such as: loyalty is valued in the qualitative introspective look at ourselves and anorganization, as well as integrity and trust. People cared understanding of where we needed to go from a businessabout Avaya and their co-workers. Innovation was also standpoint. This is how we decided what we needed totruly valued in the organization. emphasize,” comments Fitzgerald. They understood that reinforcing these behaviors throughout the organizationThey also realized some negative things. By 2008, would take more than a few all-employee or departmentalAvaya had been separated from its parent companies of meetings. Avaya integrated the behaviors in their businessAT&T and Lucent for nearly a decade or more, and yet, on a broad scale from top to bottom and made thememployees were still referring to themselves as “we” in part of everyday life. Avaya knew that changing theirreference to those older groups. This had far reaching culture would be a multi-year effort. Their scores fromimplications for the organization. In part, AT&T was 2008 revealed strengths including Team Orientation, Coreeffectively a monopoly for a long part of its existence Values, Organizational Learning, Agreement and Goalsand did not have to deal with marketplace challenges and Objectives – strengths they would leverage on theirand competition. They discovered other things as well, journey to improvement. While they were pleased withemployees were averse to taking risks, which meant they these strengths, they were largely on the lower half of thefelt they needed to ask permission or check in before model, the Internal Focus (Involvement and Consistency).making decisions. Employees were reluctant to take Given their business goals of growth, Avaya focused theirownership of tasks or projects and there was a lack of improvement efforts on the top half, or External Focusurgency in the company leading to poor execution. With (Mission and Adaptability), area of the model.the numerous restructurings and changes that happened They needed a multi-faceted approach to integratingduring the first eight years, a victim mentality permeated.Employees tended to keep their heads down, hoping theywould survive.Changing Behaviors B-FACETsUltimately, they realized an overwhelming feeling that B - Boldno one “owned” the culture and therefore, no one tookthe initiative to manage it in those formative years. Now F - Fact-basedwas the time for that to change. They identified severalvalues and beliefs that they needed to reinforce within theorganization. Some of those behaviors included: A - Agile• EVERYTHING starts and ends with the customer C - Cross-functionally• Corporate priorities = individual and team priorities• Poor performance is no longer tolerated effective• Everyone knows the competition and our strategy to win E - Empowered• Transparency is the rule, especially when it comes to results T - Transparent• Competitive energy of employees is focused on competitors, not internally• Teams are our building block All content © copyright 2005-2011 Denison Consulting, LLC. All rights reserved. l www.denisonculture.com l Page 2
  • 3. Avaya Overallthese positive behaviors into the growth oriented culturethey desired. They started with taking straight forward Avaya Overall 2008-2010 2008action such as improving their corporate governance. Theyhad formal monthly business reviews and re-structured 2008 External Focustheir goal setting process so that it cascaded throughout Get Readythe organization. New senior leadership took initiative bybeing exemplary role models. The new behaviors were 58communicated to all by describing each competency 52 35 53and providing three levels of behavior for each element: 34 Beliefs and 35the role-model employee, the average performer and the Flexible Assumptions Stable Flexibpoor performer. These behaviors, or B-FACETs, as they 63 35branded them, became the building blocks and were the 72 25 64expectation for performance within the organization. 63Integrating a New Competency Model Avaya OverallThe next step for Avaya was to integrate these behaviors Internal Focusinto their competency model. Each competency contained2008 2009 N = 12952specific definitions and behavioral anchors for each levelof service from Individual Contributor to Executive External Focus Leader. 2009 External FocusIn this way they created the building blocks for superior Get Setleadership. At the very base of the competency model, Avayaindividual contributors were expected to behave according 58 60to the B-FACET model: Bold, Fact-based, Agile, Cross- 52 35 53 43 53organizationally effective, Empowered and Transparent. 47As employees moved up in the organization to Peopleand Flexible 34 Beliefs Assumptions 35 Stable Flexible 42 Beliefs and Assumptions 42 StableLeaders, Organizational Leaders and Executive Leaders, 35 63 66 38the competencies built upon the maturation expected of an 25 23 72 64 71 66employee moving from one level to the next. 63 69Avaya reinforced the expected behaviors by incorporatingthem into everything they did. They did this through Avaya Overall Internal Focus Internal Focuscommunications, role modeling and also by making certainthat all their systems, processes and decisions consistently 2009 N = 12952 N2010 = 12412rewarded the expected behaviors. Tools like goal setting,promotion evaluation and the behavioral portions External Focus of External Focus 2010performance reviews were revised to incorporate the Avaya Poised fordesired behaviors and emphasize the message again SB 2007 03-Dec-09 Growthand again. Avaya designed a number of systems 60 that 72aligned and reinforced the new culture in a tight and 43 53 58 50 62 47coherent manner. This helped to align systems that weren’t 42 54 55formerly in line with the behavioral expectations with those 42 Flexible Beliefs and Assumptions Stable Flexible Beliefs and Assumptions Stabledisciplined competencies, for example, recruiting, selection 66 38 74 47and succession planning. 23 71 66 29 77 76 69 75The Five ConversationsTo keep the desired behaviors in the forefront, Avaya alsocreated a rubric for dialogue between employeesInternal Focus and their Internal Focussupervisors called the Five Conversations. Supervisors N = 12412 N = 13594 All content © copyright 2005-2011 Denison Consulting, LLC. All rights reserved. l www.denisonculture.com l Page 3 Avaya SB 2007 18-Nov-10
  • 4. and employees were expected to have five essential Measuring Progresstypes of ongoing conversations throughout the year, While the last few years have not been without theirincluding: challenges for Avaya, the changes in their culture have shown some tangible results. “We’ve been through an• Talking Strategy – Discussions about Avaya’s interesting journey that has had many ups and downs strategy and goals and how they link to what that along the way – some of which has been created by us individual does in their daily work and some of which has been created by the external• Talking Results – Discussions about Avaya’s environment. It was a matter of perseverance and we performance as a company, team, and as stayed true to the fundamentals and principals of the individuals behavior sets. That was the big lesson for us and has• Talking Rewards – Discussions about rewards for gotten us where we are today. Over the course of the achieving Avaya’s desired objectives last two years, we’ve made progress in just about every• Talking Capability – Discussions about improving one of our fundamental financial metrics,” comments Avaya’s capability Gaston. Avaya has seen a steady growth in total• Talking Talent – Discussions about making sure revenue and gross margin over the last six quarters. Avaya manages its talent well They have also realized cost savings of $1.6 Billion between the 2009 and 2010 fiscal years. Perhaps evenThere were some specific events around each element more remarkable is that their rate of innovation over theof the Five Conversations, however, more importantly last year and a half has resulted in the largest productthe conversations were consistently taking place launch in Avaya’s history and their highest patentthroughout the year through one-on-one, face-to- registration submissions year ever. Avaya launchedface interactions. These conversations helped to build 44 products in fiscal year 2010 and had 401 patentalignment, engagement, retention and satisfaction in submissions and 112 patents issued. True to Avaya’semployees. Since they have implemented the Five belief that this is a multi-year journey, Avaya continuesConversations practice, they have seen that managers to integrate their culture and strategy to continue towho implement them well, lead units that dramatically actualize their high performance culture in theoutperform units where they are ignored. years to come. Related Resources Special thanks to Roger Gaston. Senior Vice Denison Consulting. (2005). ResearchNote: President of Human Resources, Steve Fitzgerald, Overview of the Denison Model. Ann Arbor, MI: Vice President of Human Resources and to the Author people of Avaya for sharing their story with us. Denison Consulting. (2010). ResearchNote: Balanced Profile, Better Organizations: Learning to Balance. Ann Arbor, MI: AuthorContact Information Copyright InformationDenison Consulting, LLC Copyright 2005-2011 Denison Consulting, LLC121 West Washington, Suite 201 All Rights Reserved.Ann Arbor, Michigan 48104 Unauthorized reproduction, in any manner, is prohibited.Phone: (734) 302-4002 The Denison model, circumplex and survey are trade-Fax: (734) 302-4023 marks of Denison Consulting, LLC.Email: TalkToUs@denisonconsulting.com Version 1.0, June 2011 All content © copyright 2005-2011 Denison Consulting, LLC. All rights reserved. l www.denisonculture.com l Page 4