After the analyst meeting, Bennett reflected, "When I came in and said the company was underperforming, employees thought I was on drugs, everybody in that roomyou could tell from the faces. But I knew people could perform. After that, we set very aggressive goals."1 His listening period over, Bennett moved to combine the best of what he had learned at GE with the values that defined Intuit.
During Bennett's twenty-three years at GE, he had embraced many of Jack Welch's imperatives. Those that he had internalized included set a tone (leader's personal intensity determines organization's intensity), maximize an organization's intellect (take everyone's best ideas and transfer them to others), put people first and strategy second (getting the right people in the right jobs is crucial to the success of any strategy), foster passion (all winners share this characteristic; they care more than anyone else. No detail is too small to sweat or too large to dream), and reach for more than what seems possible (when the leader stretches, the whole organization does).2 Over the next months, Bennett exemplified these values to Intuit.
The continued presence and support of Scott Cook and Bill Campbell made Bennett's job easier. Together, Cook, Campbell, and Bennett fell into a complementary work style that enabled each man to contribute his best to Intuit. Meeting, at a minimum, every two weeks in the hours before Bennett's Monday morning staff meeting, Cook, Campbell, and Bennett worked together to ensure Intuit's best direction. Both Cook and Campbell kept onsite offices at Intuit. Cook contributed vision, and worked with specific product groups on product innovation and strategy, while Campbell added operational experience, exceptional people skills, and his broad perspectives to the company's function. As CEO, Bennett led, but all three worked together to help facilitate change.
|Leaders are paid to make decisions. Everybody gets a voice, but leaders make the decisions.|
| Steve Bennett|
Bennett had reviewed the company's Operating Values. After pondering each value's relevance, he suggested only one change: Instead of "Think fast, move fast," Bennett preferred "Think smart, move fast." Cook and Campbell agreed to the change, and announced it to employees. Thereafter, Bennett embraced Intuit's values and worked to ensure the company walked its talk.
Bennett met with Intuit customers and the company's front-line customer representatives as well as with his sixteen direct reports and other senior managers. He took the company's temperature while communicating his increased performance expectations. "I learned from Jack [Welch] to manage top-down and go to the customer at the same time. He'd drive top-down via expectations, process, and strategy and he'd also find out what customers want."3 His method allowed him to avoid the woolliness that can pervade a large organization. "The layers in an organization are like sweaters," he explained. "If you have seven sweaters on you don't know the real temperature."4
Believing the company lacked functional depth, Bennett also worked with Cook and Campbell to recruit senior executives to Intuit. Bennett hired Denms Adsit, a process excellence expert, from Rath & Strong Management Consultants in Boston to instill operational rigor, and he added Sherry Whiteley from Silicon Graphics in Mountain View to improve the company's human resources. He hired Bill Ihrie as chief technical officer from ADP of Roseland, New Jersey, and Tom Allanson from GE as VP of tax strategy. Bennett also added Dan Manack, who ran the professional accountants group. Later, in 2001, he recruited Lorrie Norrington from GE as senior VP of small business. These new recruits delighted Cook, who had wanted to improve Intuit's senior-level staffing.
Bennett also created a plan to develop and train Intuit's management staff. He authored a course on leadership that outlined the expectations of leaders at Intuit. "Leaders are paid to make decisions. Everybody gets a voice, but leaders make the decisions. That's what they're evaluated on."5 Bennett trained senior managers to deliver the class to employees in their groups, instilling a greater sense of responsibility in the company's managers. The training swept away the slow collaborative decision-making process that had both characterized and paralyzed Intuit. Developing new and stronger leaders across the company also enabled Intuit to tackle and achieve more of its initiatives.
Next Bennett began to reapply rigor to processes and innovation at Intuit. He told employees, "At Intuit we need to put process and culture together to deliver results. As you get bigger and more complex, process and scalability become more important. Bringing some of the big company process to small company customer innovation is our biggest challenge. Innovation isn't just ideas, because ideas without operational rigor just fall apart ."6 This language delighted Cook. He knew that deep, one-on-one listening drove insight into customers' needs. This insight, coupled with consistent business rigordata-driven decision making, appropriate metrics, and process improvementhad laid the foundation for the company.
Following this rhetoric, Bennett began applying rigor throughout the budgeting and performance evaluation process. In April 2000, as he met with every functional leader in the company to hear their budget projections, he made his increased expectations known by asking carefully targeted questions. "Asking good questions is a part of strategic rigor," he said. "One of the most powerful tools leaders have is the questions they ask."7
As functional leaders presented their budgets to him, some managers were not able to answer these queries, including questions about exactly what they had spent money on the previous year. So Bennett made everyone restart the budgeting process from an initial budget of zero. "You can't," he told them, "increment off bad foundations."8 He knew the managers could not improve performance without a fundamental understanding of how they had previously faredand why.
One of those who faced Bennett's grilling was Steve Grey, general manager for online services. Grey recalled:
When Steve [Bennett] came he started an annual fiscal year planning process with three year planning and financials. At one meeting, some managers presented a forecast for increasing page views. He said, "Let me understand something: If you get more page views do you get more revenues?" Not exactly. "So what drives revenues?" Page views times advertising cost per thousand views times pages sold. "So if page views go down you can still get more revenues." Yes. "So, what are the key drivers? What are the things that will make you better or worse, the few things that make the most difference?"
Steve taught us you can have hundreds of measures but if you're not measuring the right things or if they're too hard to measure you can really mess up. His approach is methodical, straightforwardbut revolutionary.9
Coupled with this new accountability in budgeting, Bennett worked to overhaul Intuit's performance evaluation system. Instead of a fairly egalitarian rating system, where most people received the same rating and similar salary increases, Bennett asked managers to create clear and measurable objectives with their direct reports and then evaluate systematically against these measurements. More employees began to receive lesser ratings, and salary adjustments for the highest-rated employees far outstripped those for average performers. This more critical evaluation system shocked Intuit's camaraderie-driven groups but rewarded the measurable achievements Bennett thought critical. Employee surveys later revealed that the camaraderie had masked hunger for individual recognition.
|Bennett made everyone restart the budgeting process from an initial budget of zero.|
By now, employees could identify a key element of Bennett's managerial approach: focusing on the critical few. Throughout Intuit, Bennett exhorted managers to ruthlessly prioritize their time and attention around the critical few issues that most affected their areas of responsibility. Bennett strongly encouraged the Intuit leaders to identify their critical few drivers and set up consistent, accurate measurements to track them. This relentless narrowing in on those business levers that could most shape success for each manager helped to eliminate the "management by committee" approach that had dogged Intuit decision making.
Focusing on the key drivers, measuring the critical few, asking the right questions, and rewarding top performers were some of the new mantras that Bennett brought to Intuit. New senior VP Dennis Adsit recalled: "Steve brought a new focus to Intuit on accountability of performance. We've seen a big change in the managers. Some didn't like the focusit was too intense and they couldn't answer the questions. On the other hand, some said, `Oh my God, I'm finally getting a chance to answer these questions with upper management in the room!' The real leaders are stepping up, getting a chance to show us how good they are. When we create this kind of forum for talking about results and improvements, things get better."10
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1. Steve Bennett, interview with authors, Mountain View, CA, 15 March 2002.
2. Jack Welch, Jack: Straight from the Gut (New York: Warner Books, 2001), 383-385.
3. Steve Bennett, interview with authors, Mountain View, CA, 15 March 2002.
9. Steve Grey, interview with authors, Mountain View, CA, 8 January 2002.
10. Dennis Adsit, telephone interview with author, 1 April 2002.