When mortgage lender Master Financial moved from a traditional PBX switch to a Sphere Communications VoIP system in 2002, it did so for three reasons: “Cost, cost, and cost,” says then-CIO Chris Mullins.
Using VoIP over a wide area network, the mortgage company slashed its monthly local and long-distance bill from $42,000 to about $12,000. Instead of needing a telecom team to run wires and install phones in every cubicle, a single network engineer was able to provision an entire office in less than 45 minutes, Mullins says.
But the move also meant Master Financial no longer needed five employees to manage its telecom system. Two were absorbed into the company’s 35-person IT department, but the others were let go.
“I was lucky in that my senior people were able to adapt to the new technology and become very proficient at it,” says Mullins, who left Master Financial to start Voxie.net, a VoIP consulting company. “The lesson here is: Don’t let yourself get married to a particular technology because it’s going to go away.”
It may be a cliché, but the saying “change is the only constant” is probably truer in technology than anywhere else. Unfortunately, IT departments are often ill-equipped to handle large-scale changes, such as transitioning from a legacy system, acquiring another company, or adopting an outsourcing solution.
“Often it’s technology pros who are imposing changes on other people, but it’s a whole different matter when change is imposed on them,” says Pam Butterfield, a longtime consultant and president of Business Success Tools. “Resistance is a normal reaction, especially with tech people who are more task-oriented and conflict-averse. Instead of coming up with a way to actively communicate change, they send out a memo and then sort of hide. That can be very disruptive in itself.”
Managing the message
Companies ignore the communications aspect of disruption at their peril, Butterfield says. When word hits the water cooler that change is afoot, people may start farming out résumés, and your best employees can get snapped up by the competition.
“I was consulting at a firm where the top management had announced there would be layoffs but then said nothing for three months,” Butterfield says. “One day a middle manager -- I’ll call her ‘Susie’ -- went into the senior VP’s office and shut the door. A few minutes later she came out sobbing. The rumor immediately flew around the office that Susie had just been fired. It turns out her dog had just died.”
“You need to paint a clear picture of what the new world’s going to look like, and the steps you’re going to take to get there,” Butterfield says.
Tom Shelman knows the value of communication in the midst of disruption. As executive vice president and CIO of Northrop Grumman, he’s seen the defense contractor grow from $6 billion to $31 billion in revenue, thanks largely to a string of mergers and acquisitions with companies that include Westinghouse, Teledyne Ryan, and TRW.
“There are two paths you have to go through,” Shelman says. “One is around how you manage the technology, and the other path is around how you manage people and culture. And if you don’t manage the people and the culture, the technology won’t matter because you’ll never get there.”
Long before the ink is dry on any acquisition agreement, Northrop Grumman creates a technology road map detailing what changes should be made immediately, and which ones can wait 12 or 18 months.