Agility, Willingness to Pivot Are Key for Transforming Companies: IBM's Gherson

By Dinah Brin July 18, 2017
Agility, Willingness to Pivot Are Key for Transforming Companies: IBMs Gherson

PHILADELPHIA—In April 2015, an IBM employee posted a petition on an internal social network challenging a new company policy that banned reimbursement for ride-hailing services such as Uber. The post gathered hundreds of comments and more than 1,200 views within hours.

Diane Gherson, IBM's senior vice president for human resources, recalled recently that she had been unaware of the policy change and learned of the petition after the company's "social sentiment team" noticed the spike in network traffic. Gherson soon responded on the social network, telling employees that while IBM had made the decision with security in mind, it was wrong and would be reversed.

In a world where people can post about their work experiences on social media, "followership is incredibly important," Gherson said at the 21st annual Wharton Leadership Conference here, referring to the need for leaders to develop a natural following versus a command-and-control style. 

Transformative Changes

The changes at IBM have included simplifying the organization's structure by removing six layers in IBM's longest organizational chains, renovating 7 million square feet into more collaborative work areas, giving employees tools to work across teams and urging leaders to adopt a more agile mindset—something that tends to be lacking in the corporate world, she said.

"There's really a shortage of the kind of leaders we need," Gherson said of companies in general. IBM's transformation focused on "the ability to pivot, the ability to move quickly in this age of speed." The company "created a culture of agility and innovation," she added.

The Center for Agile Leadership, a Hoover, Ala., consulting group, defines agile leaders as those who are inclusive, are democratic and exhibit an "openness to ideas and innovations." They have "a passion for learning, a focus on developing people, and a strong ability to define and communicate a desired vision."

The Center for Creative Leadership, with offices in Greensboro, N.C., describes agile leaders as people who are willing to challenge the status quo, remain calm during stressful times, reflect on their experiences, intentionally place themselves in challenging situations and don't become defensive when faced with adversity. A Harvard Business Review article went into further detail on these characteristics.

Today's corporate leaders need to behave more like coaches than decision-makers—holding workers accountable rather than trying to control them, Gherson said. At IBM, this has meant listening to and working with employees when developing new practices.

In the past, for example, IBM had a "hated" performance management system, Gherson noted.

"It was reviled, and it was truly clear as we were going through this transformation that" the company had to address it, she said.

SHRM members-only toolkit: Managing Organizational Change]

Two years ago, IBM, through its blog, asked employees to help the company create a new kind of employee evaluation process. Many employees were initially skeptical that the company really wanted employee feedback, but IBM nonetheless received 2,000 comments in the first 24 hours that the comment period was open, Gherson said. There was an online debate and an employee poll—and a prototype evaluation system was developed in just a few months.

Soon the company rolled out the new program, called Checkpoint, to 375,000 IBM employees.

"The great thing is that everybody feels they own it," Gherson said.

Under the old performance management system, employees sat through a meeting, waiting to hear their rating.

"It was not a good conversation," Gherson said. Now the company uses words rather than numerical scores during those meetings. Managers meet with employees four times a year to discuss five performance dimensions: business outcomes, trust and personal responsibility in relationships, innovation, skills, and client success. "It makes for a much better discussion," she said.

In changing the performance evaluation system, she said, IBM noted that research shows that critical feedback is less effective than an approach that treats the employee as a "continuous learner." Critical feedback can be perceived as a threat, she said.

IBM also changed the way meetings are handled. It pared the number of people invited to meetings and gave workers permission to say "no" to meetings and to question whether certain meetings were even necessary, she said.

Additionally, the company asked employees who worked remotely—about 2 percent of the workforce—to work with their peers in labs or client centers instead of working remotely.

The company wanted employees to work in physical company locations with other employees, rather than in home offices. In some cases, people had to decide between moving to another geographic region or leaving the company. IBM leaders explained to employees that it felt that remote work had slowed the company down. That doesn't mean employees can't have workplace flexibility if they need to meet a plumber or attend a child's soccer game, Gherson noted.  

"Flexible work and remote work are two different things," she said.

"We're all in the process of transforming our organizations and it's pretty exciting, but we've all got to keep remembering that the most important thing we can do … is to have the courage to reinvent ourselves as leaders." 

Dinah Wisenberg Brin is a freelance journalist from Philadelphia writing about workplace issues, small business, entrepreneurship, health care and logistics.

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