The People Side of Transformation

TRI: Of course, another major constraint in business transformation comes from the people side. In your book, 2020 Vision, you compare large telecom organizations to the United Nations where every small country has veto power.

Eslambolchi: As far back as 1985, AT&T had spent billions of dollars transforming, but it didn't work. People would torpedo things, because they don't want to make a change.

But if you let everybody vote in a large organization, you'd never get anything done because there are too many points of view to reconcile.

So what was done in 2002 from the board and CEO was to mandate, not delegate that transformation.

Still, you as a leader must listen to everybody because the diversity of views are very important for painting a picture and a vision to fully see the change that needs to be made. And hopefully that diversity becomes part of the solution, and not part of the problem.

I also created what I called a new mathematics for organizations to find synergies.

I told the people at AT&T that in school you've been taught that 1 + 1 = 2. But in this transformation we are going to do, 1 + 1 = 1.1. Which means if you have two organizations with 10 people each and you want to bring them together, you don't end up with 20 people. You end up with eleven people.

Now just because you're going to lose jobs along the way doesn't mean you simply cut X% of your workforce and say, "I made my earnings per share." You can hire any high school student to come in and do that.

Above all, you need to drive the IT group from a numbers-driven mentality into a process-driven mentality.

Before I began the transformation at AT&T, I asked my board of directors and CEO if there was a target for my cost reduction and they said, "No, we're not going to give you a cost target because your primary job is to transform."

And as we rolled the transformation out, I never gave my people a cost target. Instead, I said, let's keep our eyes on the enterprise customer experience and cycle time. If the cycle time comes down, our revenue is going to get better. Why? Well, first of all, I've taken a service from 120 days order-to-cash to only 3 days, so that's 117 days of revenue I didn't have before.

Second, when the cycle time comes down, the customer is going to be happy so he'll buy more services from me. Finally, my quality goes up because my database of record is accurate.

All these benefits are related. And unless you have someone at the CIO or CTO level who understands the parameters of a true business model, things are going to fail, very honestly.