Things were bad the day that Gerry Anderson became the CEO of DTE Energy. It was 2005, and the Michigan power company had a culture problem. Employee engagement was low, and everything from productivity to customer satisfaction was dropping. Anderson was there to do something about it. He launched a massive change initiative with training for employees, new incentives, and increased management oversight.
It was leading-edge corporate change, and it didn’t work. While the higher expectations and increased oversight did improve productivity, employee morale remained low over the next few years. Anderson and his team needed a new approach, and just as they were trying to figure what that could be, the global economy collapsed. DTE Energy lost nearly $200 million in revenue overnight.
Culture change would have to wait, this ship was sinking.
The company’s 2008 financial strategy went up in flames. And when Anderson pulled his team together to try to stop the bleeding, they told him that the only way to stay afloat was to layoff thousands of people. With genuine affinity for the employees of DTE, Anderson couldn’t bear the thought. He said no, and gave the group 10 days to find another way. The senior leaders came back and said that layoffs really were the only way to save the company.
So, Gerry Anderson recorded a message for all of DTE’s 10,000 employees. Everyone knew it was bad, but they probably didn’t expect what they heard in that video. He told them that the company had lost $200 million, that it was getting worse, and that the only option he and his team could come up with was to layoff thousands. A wave of sadness and fear likely swept over every person that watched that video.
But then the Hail Mary came.
Anderson looked directly into the camera and said, “I'll make this commitment to you: The last thing we'll do is lay anybody off. But, in return, I need you to bring your energy, your focus, and your intensity to our work like you never have before. And if you do that, if all 10,000 of us do that together, we can fix this." He didn’t have a plan on how to do it, but that’s probably the biggest lesson here.
Real change doesn’t start with a plan, it starts with a promise.
What is that promise exactly? Good or bad, we’re in this together. When he refused to move forward with the layoffs, Anderson actually put his job on the line too. No one would have blamed him for letting people go in the wake of the greatest recession since 1929, but many, most notably the board and shareholders, would now blame him if this experiment didn’t work out. He bet his job to save theirs, and that’s what made his promise real.
Real enough to fuel change.
The people of DTE became more innovative and creative than ever before. One team replacing a power plant control system realized that they could repurpose every part except for the circuit board. What was a $30 million repair was done for just $3 million. Creative solutions like this started happening all over the organization, and even though they were surrounded by shuttering steel mills and auto plants, the company started to turn things around.
It happened so fast that Anderson actually thought their financial models were broken. The company tripled their stock price in a few years, and that prompted the governor to ask DTE to invest more money in Michigan suppliers. The company redirected over $922 million into the state’s economy. The people of DTE didn’t just save their jobs, they saved thousands of those around them. A promise kept, indeed.
It’s an incredible story, but please don’t lose the point.
Gerry Anderson tried for years before the recession to change the culture of DTE. He had the change initiative, framework, incentives, and communications strategy designed by experts in organizational transformation. It really was great stuff, but it didn’t work. And that’s because they forgot the most important thing: Driving real change requires that leaders have as much on the line as their people.
Good or bad, we’re in this together.
It’s a point that’s made best by General James Mattis. In April 2004, he climbed into an armored vehicle to go meet with Iraqi leaders. On the way there, insurgents ambushed the convoy and a firefight ensued. Despite the fact that he was a general in command of several thousand soldiers, Mattis drew his weapon, got in the dirt, and exchanged fire. When the battle was done, the convoy drove on to their destination. General Mattis walked into that negotiating room with a uniform soaked in blood. Good or bad, we’re in this together.
To the promises we keep.