In 2008, at the dawn of the Great Recession, DTE Electric was in a pickle. DTE is a Detroit-based electric utility company with 10,000 employees. Huge manufacturing plants – their biggest customers – were closing. Their consumer customers were losing their jobs and leaving town. Energy demand was diminishing. DTE faced extinction.
Many entrepreneurs would view a large electric utility as stodgy, bureaucratic, and just plain dull.
CEO Gerry Anderson’s executive team recommended layoffs. Gerry is an engineer by training and a typical hard-skills guy. He’s a head, not a heart, guy. Yet something told him that layoffs would not turn the company around; they would merely stem the bleeding until DTE collapsed.
Despite the advice of his executive team, Gerry decided to take a stand. He laid out the situation and asked his employees for help. According to a Harvard Business Review article, he asked for more from the team.
“We couldn’t promise how it would turn out, but we would promise one thing. We promised that the last lever we would pull to protect the company’s integrity would be a layoff. That we’d do everything in our power to prevent it. But in return, we said there’s something we need to ask of you. You need to go to bat for this company with an energy level and an intensity and a level of creativity that you never have before.”
How did that work out? The company began crushing expectations. Here’s one example:
Before the recession, DTE had embarked on a $30 million renovation project. The project had entered a stage of no return, and therefore it couldn’t be delayed. The team responsible for executing the project went to their vendors and asked for better pricing. That saved them $3 million, bringing the total cost of the renovation down to $27 million.
And then something extraordinary happened. The project managers asked themselves, “What are we really renovating?” They determined that they were replacing old systems with new systems that were substantially the same except for upgraded logic boards.
So they went back to their vendors, explained the dire situation, and asked the vendors to figure out how to replace the logic boards in the existing systems. The cost of the upgrade dropped to $3 million. Yes, that’s right – ten percent of the original estimates.
By 2010, DTE was back on its feet. The company culture of mutual survival that had sprung up during the recession was no longer valid – or motivating. Gerry started thinking about how to harness his team’s energy and ensure it continued to thrive in Detroit, where everything around them was in decline. It was evident to him that a common purpose inspired employees to make a difference.
The 10,000 DTE employees were citizens of a community that was suffering and a city that was shrinking. According to Gerry, “I realized that we needed to move from preservation to aspiration. And that was what we needed to turn our people’s energy outward and help them realize that, yeah, we were OK as a company, but the people around us weren’t. So, that’s what I started to talk about. That we could be a force for growth and prosperity in our city and our community and in our state.”
DTE’s new purpose translated into better performance. By 2017, shareholder return was up 275% compared to DTE’s average peer, which was up 83%.
DTE demonstrated a strong culture that inspired followers to do more and a shared aspirational purpose that resulted in self-motivated, self-regulated, creative employees. When a team realizes that its leaders care about something besides just profit, they respond. Intentional leadership is designed to help you develop such a culture.
How would you define your culture? What is your team’s purpose? Define your culture or your culture will define you. Leaders get the culture they tolerate. I help leaders define, instill, and refine their culture to optimize performance. Want to find out how? Press that little green thingy down there for a one-hour, complimentary, culture discussion.