For John Lewis, the evidence that his company was on the right track came about halfway through 2006, when a large client abandoned the competition in favor of his organization.
“As we were asking people to make a lot of changes and asking people to do a lot of things, we won a nice piece of new business with our chief competitor’s longest-standing client,” says Lewis, president and CEO of ACNielsen USA, a marketing information provider. “It was a really great signal to people that this company did an RFP, looked at both companies, looked at how we were changing, looked at what we were doing and simply voted to change to ACNielsen. This was a longstanding, loyal client heretofore to our competitor, and I think it signaled to people absolutely that stuff we’re working on, we’re making a difference.”
Lewis was brought in at the beginning of last year to drive the changes ACNielsen would need to to make to keep in step with the rapidly changing needs of its clients to acquire new and more relevant market research data in a world of e-commerce, hundreds of cable TV channels and niche marketing.
While ACNielsen, which has revenue in excess of $500 million, wasn’t in immediate danger of demise, Lewis says a failure to be ready for the change that its clients would need it to respond to likely would have resulted in an erosion of its strength as a company over time. “It’s a great company with a great franchise, so great franchises diminish slowly, but they diminish nonetheless,” says Lewis. “So if we are not creating more value today than we did yesterday, and if we’re not thinking of creating new ways to create value for clients ... this franchise, as good as it is, would slowly diminish and be less of a great company. “It’s very clear you’re on a course to have your business nicked a little bit at a time and become a little less valuable to customers, a little less profitable, a little less growth-oriented. Over time, you wind up being more commoditized and less of a great place to go to work every day.”
To avoid this fate, Lewis set out to realign the organization to be able to change quickly enough to keep up with its clients’ needs.
“You have to bring intensity to that client focus that we did not have enough of, because only by being incredibly close to how you’re performing and how clients value what you do and how their needs are changing can you change what you do to satisfy their needs and stay ahead of them at some point,” says Lewis. “So you have to bring a client an intensity that is not just rhetoric and is not just satisfactory. It has to be world-class in order to stay ahead of the pace of change in our market.”
For Lewis, it meant making sure people had the right attitude toward change. It meant leading by example and focusing everyone on value creation rather than on revenue generation. He believed that if you create value for clients and measure everyone against that, revenue will naturally follow.
Assembling the right attitude
In a 75-year-old company, even one like ACNielsen where the demands of its clients would seem to naturally force it to change to keep up with their needs, the inertia of an organization can be hard to overcome. “You’ve got to break down all the things that go on in your company that make it hard for the client,” says Lewis. “Some of it’s structure, some of it is process, some of it is people. All three of those need to be attacked very aggressively and wipe out any deterrent to being a very fluid, very horizontal, very rapid deliverer of what clients want. “It’s all of those things: structure, process and people, and all three of those things can get in the way.”
Lewis started with ACNielsen’s people, replacing those resistant to change with ones who would embrace change and keep up with its pace.
“There are some people who are status quo folks, and there are some people who love to be part of change, so you’re looking for people who love to be part of change,” says Lewis. “You’re looking for people with vision because you are reinventing the company strategically, but you are living in a tactical world. So you’ve got to have people who can navigate the tactical with a very, very good sense of the strategic.
“You want people who are very client-centric in every function, and that’s whether it’s the CFO or the head of operations or the head of marketing or the head of client services.”
Lewis identifies those who will embrace change by examining their experience and how they have not only handled change but have sought out situations where they would be challenged by it. “You can look at people’s history, the jobs they’ve taken, the risks they’ve taken,” says Lewis. “Do people take risks with their careers? And I don’t mean crazy risks. I mean risks that were uncharted, and have they succeeded.”
With a new team in place, Lewis adopted an active personal role when it came to interacting with clients and his team in the field. People needed to see how they are supposed to act and be given feedback on how well they are doing to keep change moving. “You’ve got to model behavior, so I’ve spent an incredible amount of time this year with clients and the teams that serve them, trying to understand how I can support them,” Lewis says. “You have to be communicating, evaluating, playing back to the organization how well we’re doing and where we need to go faster. That dialogue with the associates is really important.”
And the dialogue that Lewis himself can achieve with client companies at their highest levels provides a perspective that ACNielsen’s client services or operations organizations won’t get on a day-to-day basis. “I can give us access to higher levels in our client organization, so I can have a bit of a top-to-top relationship and sometimes the things that the top people want are different than what the people that you serve on a day-in, day-out basis want,” Lewis says. “I definitely believe that my role is to help the organization to succeed, not for the organization to serve me or for me to be on high trying to direct traffic.”
Focusing on value creation
Changing ACNielsen to focus on value creation for customers meant measuring just how much value was actually being created.
Lewis revamped the compensation structure of ACNielsen’s client services organization to take the incentives away from selling services and shifting the emphasis to the results that are delivered to its clients and to their ultimate satisfaction with those results. “They were intended too heavily on what we could sell to our clients and not enough on the value we were creating,” Lewis says. “So what you had was a bunch of people who tended to push things at clients and not be totally sure of how we were meeting the needs and how we could meet their future needs. So that change sent a signal to our people and our clients that it’s truly about value creation and, by the way, our financial results will be better and they will sell more. “So it’s not an altruistic notion. We will be more financially successful if we are relentless about value creation for our clients. Changing the compensation was a great signal that that’s what we wanted to be about.”
Lewis says that now, instead of measuring success simply by the revenue the client delivers to the company, the yardstick is how much value ACNielsen brings to the client.
“We measure it project by project and deliverable by deliverable, understanding what clients thought about it and what value was created,” says Lewis. “So there’s kind of a day-today evaluation and then, having the proper market research, client satisfaction research, to understand what clients are really saying about us, as opposed to some high-level abstract notion that doesn’t really tell you what’s going on.”
Lewis says chalking up the wins is a crucial part of keeping the change engine going and avoiding the weariness that can set in when organizations are changing rapidly.
“People don’t get weary of being on a winning team, and that’s the threshold of whether your change is making a real difference, because if you’re just changing and people don’t feel like they’re making a difference, that the company is making a big difference and making strides, it’s a grind, and that’s the worst of all situations, where people are being asked to change but they either do not see the change or they don’t feel like the changes are making a difference.”
Getting those wins is a way to both reward the organization for its efforts and demonstrate how changing the way it does things can reap the rewards. And, Lewis says, it reinvigo-rates the teams to search out additional change that can lead to more wins, thereby renewing the cycle.
The changes Lewis implemented are working. He says the second half of 2006 was marked by strong renewal rates, a pick-up in new business and improvements on both top and bottom lines. “You’ve got to fine-tune the change agenda so that you are making progress, and you can play that back to your organization and create the fun, the momentum, the sense of belonging that actually makes change tolerable in the worst case and enjoyable for the most part,” says Lewis. “If you don’t get those wins, if you don’t get that momentum, it’s really hard to get people to dig down and find that next level of change. “It’s a bit of a dance because which comes first, the success or the change? It’s determining how much success you need to drive the next level of change.”
HOW TO REACH: ACNielsen USA, www.acnielsen.com