Dynamic leader Featured

7:00pm EDT March 27, 2006
If you want to know the secret to maximizing the success of your business, ask your employees.

John Rooney, president and CEO of U.S. Cellular Corp., does that every year, and acts on the ideas and suggestions employees make in the annual survey. It’s all part of the business model Rooney installed at the $2.64 billion wireless service carrier.

But it didn’t used to be that way. When Rooney took over as CEO in 2000, not only was there no system to obtain feedback from employees, the business wasn’t even operating as a unified organization.

“There was no uniform basis for conducting business,” says Rooney. “U.S. Cellular was a loosely united group of markets. One of the senior executives defined it as 26 different engines under the same hood. The sign was the only thing the markets had in common. If you went into a store in Oregon, you would see an entirely different way of conducting business than what you saw in Wisconsin or in New England.”

Each market reflected the local leader, not a coherent corporate strategy.

“You can’t run a business on the scale that we do — 25 states and 5 million customers — on the basis of some sort of loose confederation,” says Rooney. “You have to have discipline, be able to count on your control systems and generate the information you need.”

What U.S. Cellular needed was a new soul. Rooney knew it needed a culture that would differentiate it on the basis of customer service — it was the only way to grow in a commoditized wireless market. And he knew the best way to get good customer service was to focus on empowering employees and making them happy.

“Culture in a business is more than just how you treat each other,” says Rooney. “It’s the overall innards of excellence and is the foundation for the way you run the business.”

He called his business model the dynamic organization, and it’s based on a simple concept: Effective leaders build satisfied employees who, in turn, deliver outstanding customer service, which produces positive business results.

A dynamic organization is one in which individuals in the company understand so well what the goals are that they don’t have to be told what to do because they know what to do.

“It doesn’t do you any good to hire someone that has creativity, is a self-starter, intelligent and is motivated and all the things people talk about when they want to hire someone, and then put them in a straight jacket and turn them into some sort of puppet where they are doing just what you tell them to do,” says Rooney.

By building U.S. Cellular on the model of the dynamic organization, the company would outperform competitors and everyone — employees, managers, customers and shareholders — would come out a winner.

Calling for change
Rooney started the transformation by providing everyone with the training and tools they needed to perform within the new business model.

“I felt I had to give everybody a chance,” says Rooney. “I gave them all the information, and we went into an intensive training effort of all our senior people in the business so that everyone understood the rules and consequences of not following them.

“What I found was that there were three types of people. There were those who espoused the principles and actively supported the implementation. There were people that felt it was OK to espouse part of it, and then there were those that were not going to do it and had their own way. Those people tried to undermine the whole system. The people who espoused it are still around. The people that fell into the last two categories found other things to do.”

It wasn’t just low-level employees who resisted change. Of Rooney’s six direct reports, only one is still at the company. And of the people running the 26 markets, only a few remain.

Rooney drove the changes using training from both in-house and outside sources. Everyone in a leadership position went through training that taught them what the dynamic organization is all about and what effects it would have on them and their associates.

“When I first rolled it out, there was a course for the senior VP and the executive VPs,” says Rooney. “The only value someone has as a leader is the extent that they can teach the people they are responsible for. The executive VPs teach the VPs, the directors teach the managers and so on.

“What they learn is management techniques, but more importantly, they learn the most important thing is people. Your results are a composite of the results from the people you are responsible for. Leadership is a privilege, not something that is a divine right. The ultimate privilege is to help other people be successful.”

The original message wasn’t received with open arms, but the training eventually either convinced the leadership to change or helped identify those who needed to go.

“When I first got here, I stood up in a forum and told them that the most important people are not the people sitting here but the ones out in the field,” says Rooney. “There was all sorts of negative reaction to that. I didn’t want them to think they are the end-all, be-all of the company. It took awhile to at least get them to acknowledge that, if not accept it.”

Dynamic organization in action
Once everyone was trained and understood the business model, Rooney started reaping the rewards of empowered employees who were telling him how to run a successful organization.

Each year, U.S. Cellular does a voluntary cultural survey that more than 90 percent of its employees participate in. Those with more than three people reporting to them receive a report card on how they are doing, and everyone grades Rooney.

“The reason why participation is so high is the associates and leaders know we are going to react to it,” he says. “We read it. We don’t just put it on a shelf. It’s something we take to heart, and as a result, it’s very well accepted. If there’s an area of the business we think we’re having difficulties with, we’ll do an interim report after maybe six months.”

Rooney uses the survey as a direct gauge of what people think of the company.

“Sometimes customers’ ideas of what we are is a direct reflection of what the associates think we are,” says Rooney. “The customer’s view of U.S. Cellular is the last contact the person had with a store associate or one of the people in our call center. We had to measure that.

“One of the driving factors is that the most important people in an organization are the people you choose to talk to the customers. The people on the frontline are the most important. It’s very logical when you think about it. If they are not successful, there is no way anybody else in the organization can be successful, and that includes me. Our job as leaders is to focus the resources on their success.”

Part of that focus is using the surveys to help review and evaluate talent in the leadership ranks to make sure frontline employees are getting the help they need. Leaders are rated on what they do and are equally rated on how they do it.

“Someone who is doing extremely well on the ‘what’ will be asked to leave if we don’t like the way he or she does it,” says Rooney.

This keeps everyone within the framework of the culture. Results are great, but only insofar as they are done in an accepted manner.

“There are two things we will look at with any problem situation: Is it a will or a skill issue?” says Rooney.

A will issue means the person will be looking for employment elsewhere. A skill issue is followed up with training to address the specific problem.

“This is all through the organization,” says Rooney. “I get a report card from 7,700 people. It’s two inches thick of comments. I find a nice corner and an adult beverage and absorb as much as I can. We all have to go through that.

“We learn a lot, not just about ourselves but about the way we do business. It’s all aimed at improving contact with the customer.”

The survey allows U.S. Cellular to make sure it is providing the strongest leadership possible, which leads to satisfied employees. Once you have that, satisfied customers, and thus improved business results, naturally follow.

“Walk into a store somewhere, and if you see someone being waited on by smiling, enthusiastic associates, it’s a pretty good bet the store is run by happy leaders,” says Rooney. “It’s not just compensation, it’s giving people a say in how the business is run and trusting them to do the right thing.

“One of the first surveys we did, there was a comment that said, ‘Catch me doing something right. Too often, you catch me doing something wrong.’ If you really think about it, if you reinforce good performance, you’ll get a better reaction than if you catch every negative thing and try to change them. It is no coincidence that we finally hit our best years at the same time the survey results popped through the roof. The survey tells you what is going to happen, and it does happen.”

The changes at U.S. Cellular didn’t happen overnight, and it’s a never-ending process.

“You don’t change culture, you destroy it and build a new one,” says Rooney. “It’s almost impossible to evolve one. People work real hard for noble goals. They have to be able to understand the contribution your company is making to the overall good of the people they serve.

“We don’t talk to people about generating profits or operating costs. They can’t control that. But they can control the experience they give the customer and how they portray the business and put forth the product.”

After six years, the dynamic organization model has shown impressive results at U.S. Cellular. It has the highest customer satisfaction and loyalty rates (more than 98 percent) and the fewest customer complaints of any company in the wireless industry.

Turnover rates at call centers are about one-fourth the national call center average, and 96 percent of all employees say they have a positive opinion of the company and its leadership. The company has also posted a five-year compounded annual growth rate of 14 percent in total customers and 12 percent in service revenue.

“All this is really easy to talk about, and it’s really hard to do,” says Rooney. “Every business you go into, you will find frames on the wall full of platitudes and promises. They don’t do you any good unless you are out there living it and working it. And it’s hard work. I’m always out there. I’m with my people as much as anybody else. Everybody gets to look at me, and believe me, if I misbehave, I hear about it — but that’s good. Why would I hold my people to higher standards than I hold myself to?

“When this thing is working, it’s the most rewarding environment you could possibly have. It cuts down on associate churn and gives us a low turnover rate in our call centers and stores. People care. A lot of companies say people are their most important asset. In the business we are in, and being our size, we have to have every one of our people on the same song sheet and fired up as all hell about making the company go. They do that because they are proud of the company and their association with the company.

“I’m never going to be as big as Verizon or Cingular or any of these guys, but what I have done is vowed to be the best at what we do.”

How to reach: U.S. Cellular, www.uscellular.com