Sustainable Process Improvement
Prelude — Steve
This is a book about successful organizational change at a company called Mitel, one of Canada’s foremost telecommunications producers. In two short years we led a large-scale effort involving over 500 people that improved company profitability by a multiple of 40 — from $2 million to $80 million.
Our roles in the story are very different. Geoff Smith was the Vice President of Research and Development, and was faced with huge organizational challenges. I was the Organizational Development leader hired by Geoff to help get the company back on its feet.
It would be nice to tell you that everything we did was planned and scripted and that all went according to plan. We wish we could tell you that everything we did turned out the way we intended. Unfortunately this is not so. But this is not a book about perfection. This is a book about action and about what really happened. What we did, what we failed to do. What worked, what didn’t, and what we would do differently if we had to do it all over again.
The story spans 25 years of Mitel’s history, but focuses on the two critical years during which the company was on the ropes. It presents three kinds of practical insights: Geoff’s point of view as the “Change Champion,” my point of view as the “Change Agent,” and a company perspective on the business impact of our actions.
Part 1 of the book is the story of Mitel, which began as “the little company that could.” As we tell the story of what led up to the need for change and how we implemented it, we’ll point out “key learnings” — important things that we discovered during the process. At the end, we’ll summarize our thoughts on the “dos” and “don’ts” of organizational change as explained by the framework we used.
Part 2 of the book is devoted to the organizational change models we used, along with an analysis of how we applied them in practical ways at Mitel.
If you work for a company of more than 10 employees, we expect that you will see things in this book that you can relate to, as the types of issues we were facing are universal. We just seemed to be facing a lot of them all at once.
So whether you are reading this to change the entire direction of your company, build better products, help guide you through a post-merger integration or just improve the performance of your team, you will find proven ideas and approaches that can work for you.
Now, on to the story of Mitel…we hope you enjoy the ride.
Chapter 1: Things Have To change – Geoff
One cold day in January 1997, I was sitting in the boardroom of Mitel’s headquarters along with the entire Senior Management team. Opposite us in this emergency meeting sat six of our most important customers, known as the “Elite Dealers’ Council.” These six people were the chosen representatives of the top 54 sellers of Mitel products in North America. This was a powerful and influential group and they were not happy. The group had demanded this meeting and there was only one topic on the agenda: product quality.
As the Vice President of Research and Development (R&D), I had known these people for a long time. They represented 80% of the revenue from our indirect distribution channel. We sold our products to the 54 dealers and they distributed them to end customers across North America. They also provided technical support to end customers and their message to us was crystal clear; they believed Mitel had released a new product too early. Problems were showing up in the field – problems that never should have escaped our lab-testing environment. The dealers felt that they were debugging our products at their own expense and at the expense of their customers.
The telephone business is a high-stakes game with little room for error. Any business without dial tone is like a company without oxygen. The very people who controlled the lion’s share of our revenue were running out of patience with us and they were not going to continue to do business with us unless we got very serious about fixing these problems – fast. Without access to customers through these indirect distributors, we were done. Simple as that – Mitel could not continue to operate.
I was shocked. Not about the problems – for I knew these problems well, and the engineers in R&D had been working on solutions, although not nearly fast enough for the dealers. What shocked me was the realization of the impact that these problems were having on end customers and on the businesses of the dealers. To become an elite dealer these people were contractually bound to sell Mitel’s products exclusively, so their business was essentially tied to ours. They could of course switch suppliers and leave us, but such a move would be hugely disruptive to their businesses. Their livelihoods were being threatened by our product problems.
Everybody in the room knew the same thing I did: this was squarely an R&D issue. It was my job to fix the products. The future of the company rested on my head and in the hands of my R&D department.
Things had to change.