 Driving Innovation and Growth
Using A Virtual Approach
by Joyce Reynolds-Sinclair, Ph.D. and Leland A. Russell
The leadership of the Weyerhaeuser Building Materials industrial business wanted what the leadership in every company wants: to rapidly drive innovation and growth. But the complexity of the leadership task was daunting. They had over 70 locations throughout the U.S. and Canada and they had recently implemented a matrix structure with geographically dispersed leadership organized into 12 regional markets.
The urgent need for strategic leadership action was clear to everyone. They had experienced little or no growth in sales over the previous three years and, while expenses had continued to grow with inflation, gross margins had stayed constant.
There were several challenges underlying this need for strategic leadership action:
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The industrial business was highly fragmented, served by thousands of diverse niche competitors.
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Although larger than many other competitors, Weyerhaeuser’s competitive position was weak. Its “niche” was primarily an amalgam of local markets.
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The company’s core strategic leadership weakness was its uncoordinated innovation and growth strategy.
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Every local leadership unit targeted its own unique set of customers and products. Without proper leadership coordination, innovation and growth opportunities were missed, resources wasted, costs uncontrolled, and Execution inconsistent.
- Two previous top leadership efforts had failed to overcome this problem of locally driven strategies. Whenever top leadership tried to assert more central control over local decisions, the leadership of the local units resisted giving up control, especially of their sales force. This local level leadership resistance, combined with the lack of strategic leadership at the business level, had left the business in a stalemate. It had neither a coordinated strategy for innovation and growth nor the ability to shape or implement one.
“To achieve profitable growth, we had to break the leadership stalemate,” said one member of senior leadership. “Our problem was how to accomplish this rapidly with limited resources at minimal cost. The solution was to use an online Collaboration Center to bring participants together virtually in regular weekly strategic thinking and planning sessions.”
A Virtual Approach
The goal of the virtual approach was to ensure that the knowledge and opinions of the full spectrum of functions throughout the company was represented in the planning and implementation.
An Execution Leadership Team coordinated the entire effort with the support of a high-level Strategic Decision Leadership Team that monitored the overall progress and made strategic decisions in real-time (and, when necessary, allocated resources quickly).
“Typically, our Execution leadership efforts started quickly, but then bogged down as issues and concerns surface from many directions,” says Phil Leupold, Regional General Manager and head of the Execution leadership team. “For that reason, the members of the Execution leadership team were expected to maintain a strategic leadership focus (rather than promote parochial interests) and remain actively involved in the leadership effort throughout the planning and initial implementation phase.
“We recognized the importance of engaging our leadership stakeholders across the regions. The challenge wasn’t so much in determining who should participate in the process,” says Leupold. “It was the cost and logistical constraints of physically convening such a large number of leadership participants from geographically dispersed locations. This was simply not feasible.”
The solution was the Leadership In FastTime® Collaboration Center that enabled participants to come together online in regular weekly strategic planning and implementation sessions. “Using web-based collaboration tools, we were able to quickly channel and organize concerns. The fact that we could think and plan together in real-time, regardless of our geographic location, allowed us to maintain the speed and alignment we needed to succeed,” says Leupold.
In two 90-day phases, participants rapidly developed and implemented a winning strategy for innovation and growth.
Phase One: Execution Leadership Process
During Phase One, the Execution Leadership Team held weekly online planning sessions, which typically lasted 90 minutes. The sessions were tightly scripted and facilitated by GEO Group Stratgeic Services, the firm that provided the Leadership In FastTime® Collaboration Center.
Prior to each session, participants previewed the material to be covered (which was e-mailed to them 48 hours in advance). For the session, they dialed into an audio conference line and also logged on to the Leadership In FastTime® Collaboration Center.
Participants provided feedback during and immediately after conference call discussions, allowing everyone to challenge ideas and see, in real-time, whether consensus and ownership were developing.
Says Leupold, “We often had 20+ people providing simultaneous input, which greatly accelerated the whole process. With our most controversial subjects we used an anonymous mode for feedback that generated a lot of candid observations that would not have been expressed in a face-to-face meeting.”
There were three steps to build ownership and agreement on each planning deliverable, which were enabled by the collaboration tools.
Step 1: Issue Input
During and immediately following the initial online session, participants responded online to a series of questions designed to capture their thoughts on specific issues.
After the first session, the facilitators reviewed the participants’ online input and then prepared deliverable draft #1, which was emailed to participants before the next weekly session.
Step 2: Draft Development
At the next weekly session, participants verbally discussed deliverable draft #1 for a few minutes and then answered three questions about each section of the draft using the online collaboration tools:
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On a scale of 1-10, what is your overall level of agreement with this section of draft?
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What are the reasons for your rating?
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What editorials or substantive additions do you recommend for this section?
After the session, the facilitators reviewed the participants’ new online input and then prepared deliverable draft #2, which was emailed to participants before the next weekly session.
Step 3: Confirming Consensus
By the third weekly session of iterative feedback, there was typically 85-90% consensus on a well-considered deliverable document, which was approved by the senior leadership and posted in an online library.
At the end of the Phase One Execution Leadership Process, the Execution Leadership Team had developed the overall strategy and strategic action plans for 17 aligned projects. Phase One concluded with a two-day onsite meeting with senior leadership to refine and approve the 17 plans and prepare for implementation.
Phase Two: Execution Leadership Process
During Phase Two, cross-functional implementation leadership teams were formed and operated as a temporary “campaign” organization.
Every other week, GEO Group virtually coached the implementation leadership teams on how to remove roadblocks and accelerate action. On the “off” weeks, the implementation teams conducted their own team meetings.
GEO Group also facilitated monthly progress checks with the whole campaign group (all 17 teams) using an online version of the US Army’s “After Action Review” (AAR). During the progress checks, each implementation team answered four questions:
Members of the Execution Leadership Team maintained real-time awareness of what was working and not working by participating in the monthly After Action Reviews.
The Results of A Virtual Approach
Given the previous strategy shortfalls, Weyerhaeuser’s senior leadership was clearly pleased with the business results that Ed Jones, the CFO, reported 12 months after the initiative began:
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Sales were up 10 percent—the highest-ever rate of sales growth in a market that grew less than 3 percent.
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Net profits were up 58 percent.
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Return on assets was up 60 percent.
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Headcount was reduced by 10 percent.
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Total business investment held constant, despite growth.
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Share of key market segments increased.
Additionally, the business leadership found other significant benefits from the virtual approach to planning and implementation.
“The cost-effective way we were able to quickly engage the whole organization was impressive,” says Phil Leupold. “We rapidly captured and synthesized a broad spectrum of views, opinions and ideas and translated them into winning strategy and action agendas that everyone understood and bought into.”
“For the first time, we had a coordinated innovation and growth strategy,” Leupold adds. “There was a high degree of leadership understanding of, and commitment to, strategic priorities and their implementation across the whole organization. All levels of leadership were aligned and proactively collaborating.”
“Not only did our business benefit from this process; so did our individual leaders,” says the CFO, Ed Jones. “There were many insights into best practices for Execution leadership especially the how-to of accelerating thinking, planning and action.”
Jones says the virtual approach to developing and implementing the innovation and growth strategy positioned the business for future success in several ways:
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It addressed the core questions of leadership, customer selection, product mix, accountability, process, and staffing.
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Most importantly, all levels of the organization’s leadership were engaged in building the strategy and communicating it broadly.
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The operating structure was realigned to allow the leadership more control from the business level while not compromising local initiative.
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Managers and sellers were given clear customer and product accountabilities.
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New reporting responsibilities were implemented with geographic barriers removed.
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An aggressive remanufacturing effort was launched to provide large customers with differentiated products. Based on service, reliability and reputation, WBM targeted five major segments with its two largest suppliers. Because of the aligned, coordinated strategy within the industrial business, company-to-company connections were established and strong relationships were developed with their suppliers. Weyerhaeuser was also able to capture key customers in commodity and niche markets efficiently, such as the wooden skis in the NordicTrack exercise equipment.
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Key resources were redeployed according to customer, product, and geographic priorities. Sellers who were active in low-priority markets were either eliminated or moved, while staffing in target markets was increased. By reducing, if not eliminating, commitments in marginal markets, the company was able to concentrate resources in those markets of greatest strategic priority while actually reducing costs.
In the end, Weyerhaeuser’s leadership commitment to a collaborative, virtual approach to planning and implementation led to deep satisfaction with the overall direction and momentum for change within the industrial business unit. Jones concluded, “The process helped us develop a superior strategy that not only produced short term-results, but also helped us establish an Execution culture, which gives us a significant competitive advantage.”
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