While preparing to take the reins of telecommunications company Verizon from its longtime leader Ivan Seidenberg in 2011, incoming Chairman and CEO Lowell McAdam thought through the challenges facing his company as he began to establish his top priorities.
He established a goal for Verizon to build a business as good as its networks. “It was incumbent upon me and my leadership team to fully exploit the potential of those assets to drive long-term shareholder value.”
McAdam met with Marc Reed, chief administrative officer, and Fran Shammo, chief financial officer, to determine the best way to transform the company by intensifying the focus on shareowner value among the senior team.
They decided to engage the entire senior leadership team in a focused learning experience based on the core tenets of value creation.
Over two months, the team conducted interviews with executives and analyzed 10 years of financial data to develop a clear strategic imperative related to improving shareholder value. From this research, the team developed a two-day course.
In addition to content and facilitation from external faculty at Duke Corporate Education, the program’s success depended on Verizon’s C-suite executives acting as leaders teaching leaders.
McAdam signaled his commitment by leading the first session, which focused on the institutional and cultural barriers to driving shareholder value, as well as the wrap-up segment of every class.
By participating in every class, he communicated to all senior leaders the need to eliminate Verizon’s silo mentality to better leverage company assets.
Further, several leaders participated in an executive panel that engaged teams in enterprise read-outs on the challenges facing Verizon.
McAdam made attendance mandatory. Between February and July of 2011, 10 sessions accommodated Verizon’s entire senior team. Attendees were required to submit an individual accountability plan, or IAP, listing the actions they intended to pursue to create shareholder value.
In 2012, Verizon drove accountability for shareholder value deeper into the management team by deploying a course to more than 2,000 director-level employees. A blended architecture was developed with deeper experiential learning through customized simulation.
Verizon continued to drive impact by internally developing and deploying a 30-minute online training for more than 10,000 managers. This course will be cascaded to more individual contributors this year.
Broadly, the company has initiated several new processes to drive shareholder value, including a greater focus on achieving goals under executive incentive plans, a new capital budgeting and allocation process, new “Voice of the Customer” and “Voice of the Shareholder” measurement processes, and a new organization, Operational Excellence and Process Transformation, focused on process improvement and Lean Six Sigma implementation.
Magda Yrizarry is the vice president and chief talent and diversity officer at Verizon. She can be reached at editor@CLOmedia.com
