Merging
Cultures
Lockheed
Martin
Action Teams Steer
Dramatic Turnaround at Lockheed Martin
This success story
won honorable mention in Fast
Company Magazine's 2002 "Fast 50" competition.
Business Challenge
After a dozen years of industry consolidation, Lockheed
Martin–the world's largest defense contractor–had experienced
a 60% reduction in workforce and declining employee confidence and trust
in senior management at its Space Systems Division. Employee faith in
the future of the company was brittle. Many of the more than 15,000 employees
still claimed loyalty to their former Fortune 500 "heritages,"
which had been merged and acquired over a 10-year period of sweeping consolidation
in the aerospace industry.
Employees rated day-to-day workplace communications extremely poor in a company survey. Fewer than one in five employees believed that company senior management openly communicated with employees, and only one in four believed management had a clear vision for the company's future. Knowledge of business direction, career development and personal performance was insufficient and unclear. Downward communication trickled; communications between divisions, departments and locations was rare. Upward communications was hindered by the poor listening skills of a technically trained workforce and management team, a fear of retaliation among many, and reliance on one-way, formal media.
Response
Lockheed Martin leaders agreed that effective communication
is required to build a 1-company, common culture. Partnering with L.M.
Dulye & Co., a New York-based, business consultancy specializing in workplace
communications, the company introduced a 2-Way Communications Improvement
Initiative as part of its business plan. Business units were required
to develop formal communication plans through a disciplined, process improvement
effort that united employees and management on diverse action teams.
Critical issues, called "red flags," were selected by top leadership based on the company's communication survey results. Action teams were assigned an issue and provided consistent methodology to use for determining the root causes and developing detailed improvement recommendations. The teams' findings and recommendations were presented face-to-face to top management for discussion and immediate decision. Approved recommendations were integrated into a master plan that was managed and tracked locally, and reviewed for progress at the company level. 2-Way Communications performance was added as a key indicator in quarterly business reviews held by the president.
Since 2000, nearly 100 Communication Action Teams have tackled workplace communications issues. Hundreds of recommendations have been approved for implementation. What's changed? Senior managers hold monthly roundtables and weekly informal walks around work areas. Cyber-centers have opened to enable employees without their own personal computers to access new web-based information resources or to email a question or comment to new Q&A portals established for business unit leaders. The annual performance review process is supplemented by quarterly informal discussions between a manager and his/her direct report about career development and performance improvement opportunities. Information exchanges promoted through virtual brown bag sessions have bridged locations and departments that once acted as silos. A career development center has opened offering face-to-face and web-based information resources. Hundreds of managers and employees have completed communications training. Senior management's incentive compensation goals now include a 2-way communication component. Quarterly progress reports about the 2-Way Communications Initiative come directly from the president.
Results
About 18 months after introducing the 2-Way Communications
Initiative, a resurvey of communications performance showed:
- Employee knowledge about company goals and performance increased 35%
- Employee views that senior management openly communicates with employees about business issues increased 263% (see chart below)
- Senior management credibility ratings have increased 45%
- Employee confidence in the long-term success of the company increased 83%
- Employee views of integration and teamwork (to the question that all parts of the company are working together to achieve business goals) increased 246%
- Information shared
openly between departments and teams increased 145%
(see chart below)
- Management now conducts regular, informal walks through work areas with no "entourages."
- Employee comfort
in speaking up to senior management with a different view or idea increased
54%
- Information quality (timeliness, usefulness, accuracy) improved by more than 20%.
- attrition levels shrank to–in some cases–2%.
Amidst ongoing restructuring
of business units within Lockheed Martin's Space Systems company, the
2-Way Communications Initiative continues to support integration efforts
to promote a 1-company culture. Business units are in their second or
third round of launching employee teams to tackle workplace communications
issues sparked by organizational and business changes.