How do you transform the leadership culture of your organization while re-inventing your industry? Let’s look at the case of DriveTime. (More DriveTime’s leadership culture development here and here.)
These promotional videos show how the new leadership culture connects with customers and engages employees. The case follows …
Leadership culture is the self-reinforcing web of beliefs and activities that produce shared direction, alignment, and commitment in an organization or collective.
DriveTime is one of the largest used car retailers in the U.S. In 2002, new owners took control of the company. They saw the potential for long-term value in transforming DriveTime from an old-school used-car company into a well-led, technically excellent, socially responsible, and reliably profitable business. This meant overhauling and integrating a value chain including vehicle sourcing and servicing as well as a financing operation in which DriveTime retains and services the consumer loans.
A new CEO, Ray Fidel, was brought in. He and his senior team crafted a vision of a collaborative, interdependent approach to leadership, which they understood as requiring a new mindset and new ways of working for everyone in the organization. They sought to create an entirely new and more interdependent leadership culture.
DriveTime has been implementing this vision since 2002 and is now working on a second wave of transformation called DriveTime 2.0. We talked with Ray (CEO) and Jon (SVP) about the lessons they have learned, framed here in terms of the six practices of boundary spanning leadership: buffering, reflecting, connecting, mobilizing, weaving, and transforming. (More on the fascinating case of DriveTime here and here.)
Buffering: The most basic move in boundary spanning is to initially strengthen and maintain in-group identity and safety as the foundation for subsequent boundary spanning. After much experimenting, DriveTime concluded that their performance metrics worked best by primarily rewarding in-group objectives. Attempts to reward people based on companywide or shared metrics were not successful. People tend to be motivated by the metrics which they could achieve through in-group effort. Groups needed to focus on their primary work tasks and basic team-building remained important.
Reflecting: DriveTime co-located Finance and Sales in the dealerships. While each group focuses on their own tasks, their co-location allowed each to see firsthand how the other group functions, and educates each other regarding their own group. Daily positive interactions led to heightened respect between groups with different objectives and identities.
Connecting: The dealerships used an interactive game called Road Trip to develop employees. Road Trip is a multiplayer business simulation in the form of a board game that engages employees in all aspects of running a DriveTime dealership. By learning side-by-side, in a safe environment, members of each group began to make deeper connections to the other groups, building mutual trust and a shared sense of community and culture.
Mobilizing: DriveTime created a leadership development agenda for all their middle- and upper-level managers called Inside Out. Inside Out is aligned with the business strategy and is about individual and collective leadership development toward a more interdependent culture. Multi-day, face-to-face meetings were interspersed with individual and group coaching. The purpose of Inside Out is to engage each person’s inner development as a human being (“inside”) as an underlying engine of growth and change, and to connect this inner personal development with the new corporate strategy and culture (“out”). According to Ray, the CEO the intent of Inside Out is “to create free thinkers, bigger minds, and headroom for an interdependent culture.” Inside Out regional and national gatherings were the first time that many managers experienced the company as a whole community and not just in terms of their group or region.
Weaving: DriveTime uses an agile project methodology called Scrum (for example). Scrum, originally developed in software development, uses collaborative, cross-functional, rapidly responding teams to develop and implement projects when requirements are complex and shifting. Scrum encourages interdependence by being open to formal and informal testing and revision from all over the organization. In essence, scrum builds learning and problem solving into daily work. A key innovation at DriveTime was the use of Scrum for all kinds of projects, not just for information technology. The boundary spanning practice of weaving is how new frontiers in the work begin to be realized, and where innovation occurs.
Transforming: Transforming the company and its leadership culture into a new and better kind of organization had always been the vision of the management team. Yet the vision took time to coalesce and required the shared work of leaders all across the company. The very first steps were more about bookkeeping and housecleaning rather than transformation. A lot of employees were not interested in, nor capable of, this vision of a better kind of used car company. Trust needed to be built, and boundaries needed to be managed, before transformation could be possible.
Now, over ten years into the journey, they are in the second big wave of transformation, the movement from DriveTime 1.0 to 2.0. According to Ray and Jon, being at something like version 1.5 or “halfway” is an especially difficult place because the previous beliefs and practices are outmoded, and the new culture and systems have yet to be realized. The preparation for this place of development lies in having gone through the journey all the way from buffering, to reflecting and connecting, to mobilizing the entire community, and reweaving old boundaries.
Transformation is the last phase in the boundary spanning model. It is also the first step. Expressing the intentional strategy of transformation at the outset is invaluable in providing direction, alignment, and commitment for integrating the strategies and practices of boundary spanning leadership.