by Stephanie Overby

Corporate Angst

Apr 01, 200214 mins
IT Leadership

Like individuals, organizations can become depressed, agitated and dysfunctional. Here's how one company that had a problem in authority dynamics fought its way back to health.

The air inside the IS department at Millennium Teleservices had become poisonous. “No one looking at our department could tell that we were ready to kill each other,” says CIO Leif Maiorini. “But we were ready to kill each other.”

By the fall of 1999, the 113-person technology department at this Edison, N.J.-based telemarketing service provider was in the throes of a slow-motion, virtual nervous breakdown. Departments within IS were warring. Ninety percent of the staff was threatening to leave. Revenues were flat. Productivity, according to Maiorini, was half of what it should have been. And no one was looking forward to the looming promotion of then-Vice President of IT Maiorini to CIO, not even the would-be CIO himself. “For the first time in my career, I doubted my ability to have a positive effect on the situation,” Maiorini admits.

Self-doubting, dysfunctional departments are nothing new; an industry of consultants, coaches, training institutes and book publishers exists to inspire leaders, empower employees and get them all working together. But Millennium Managing Partner Brian Pasch took a different tack.

He called a shrink.

Christine Truhe, an organizational psychologist based in Summit, N.J., began what she calls an intervention. Known in the organizational development field as “organizational diagnosis” and inside the Millennium offices as simply “the Dr. Truhe thing,” it’s a process of assessing an organization or a particular business problem by addressing the relationships between individuals and groups.

At Millennium, Truhe encountered a dynamic she says is quite common among family-run businesses seeking to become more professional, startups that suddenly become successful, merged corporations and previously stable companies experiencing exponential growth. “There are a variety of complex psychological forces that converge in these kinds of situations, but generally the critical element is unclear or competing authority figures,” says Truhe. After diagnosing Millennium with a problem in authority dynamics, she prescribed a cure.

And according to almost everyone involved at Millennium, a year and a half and about $100,000 later, it worked. Productivity and efficiency are up, costs have come down, retention has increased and, most important, people can breathe again.

Hitting Bottom

It had taken some time for the 39-year-old Pasch, who in 1993 joined Millennium cofounders Scott Pasch (his younger brother) and Dave Keezer as a managing partner and the company’s first IS employee, to see that there were real issues in the department. “I started seeing a lot of professional people, who were good at what they did, not getting along,” says Brian. “I tried saying, ’Hey, you guys are adults. Go work it out.’ That didn’t work.” He encouraged his group of eight IT managers to attend workshops and courses in communication. To generate team spirit, he tried taking them out to New York Yankees baseball games in the spring and summer and New Jersey Nets basketball games in the fall and winter. He looked into setting up a lending library on leadership and management topics. Nothing worked.

The department had started its downward spiral in 1995 shortly after Pasch hired Maiorini as a vice president in IT from competitor RMH Teleservices in Philadelphia, with the unofficial, unstated, but widely understood intention of eventually naming him CIO, which he did in 1999. “The goal was always that we would build the department up to a fairly significant size and I would take over,” the 35-year-old Maiorini explains. It was pretty clear early on that he considered me the second in command.”

Pasch was eager to get out of day-to-day IS management to focus on more strategic initiatives. Millennium’s IS department, which Pasch had built person by person, had grown from three to 113 in five years, and the larger company was poised for still more growth. (According to various sources, the privately held Millennium’s revenues were $35 million in 2000.) “I always felt that I was a confident business leader and a successful businessperson, and now I spent a lot of my day refereeing,” Pasch recalls. “Everyone thought another person was sabotaging him. There wasn’t a whole lot of trust.

“It was like the wheels were falling off the cart while we were going down this big hill, with the hill being the company’s growth.”

Things had gotten so bad that one IT manager came out of a meeting with his fellow vice presidents saying that he felt like he had been run over by a bus. Someone bought a toy bus for the conference room and “giving someone the bus” became a Millennium euphemism for flaming another employee. Before long, employees were taking the bus all day long rather than doing their work. “I have copies of my e-mail to prove it,” says Travis Rogers, who joined the company as a director of call center technology solutions in 1997 (he’s now senior vice president of systems development). Rogers says he spent up to four hours a day just responding to vicious missives.

By 1999, Pasch knew that his vision of stepping back from IS in order to focus on streamlining Millennium’s expanding operations (since 1993 the company had grown from one to 35 call centers) was growing dim. “I knew that if I didn’t get some outside help, I couldn’t properly transition this organization without bloodshed,” Pasch says.

Pasch talked to a friend and psychologist about his concerns, and that friend gave him Truhe’s number. “He said, ’If you’re feeling like you don’t have the tools to handle this, that’s what an organizational psychologist is for,’” says Pasch. He called Truhe, admittedly with some trepidation.

“My personal beliefs said that it’s a very healthy thing to go to a psychologist when you’re struggling with life or personal issues. But not everyone in the business world shares that view,” Pasch says. “I was afraid someone would write the process off and say, ’I’m not talking about how I feel inside.’”

Truhe overcame Pasch’s misgivings by explaining her work in business terms. “I don’t ’shrink’ organizations,” she says. “Organizational psychology is a field of science that is based on literature about how groups of people within a system interrelate. If you’ve ever seen a quality chart with boxes representing tasks, we address the space between the boxes. Between the tasks there are relationships — sometimes multiple relationships — that affect productivity. That’s where we intervene.”

First, she talked with Pasch and CIO-to-be Maiorini to get an idea of the problems in the IS department and the personalities involved. She also asked them about their past experiences in corporate groups in much the same way a personal psychologist might ask about a patient’s family.

Maiorini had been a CIO for four years at his previous company and had been in managerial roles since he was in his twenties. Millennium was Pasch’s first leadership position, and most of his professional experience had been in more individual pursuits, ranging from land surveying to engineering. Together, the three decided that an intervention was warranted. Maiorini realized that his ideas for changing the organizational structure within IT would not be enough to fix people’s unhappiness. “After talking to Chris [Truhe], I realized I couldn’t just rearrange all the boxes on the organizational chart to fix our problems. It might make it easier for people to do their work, but the core problems existed in the connections between the people,” Maiorini says.

A Company on the Couch

Truhe began by distributing a questionnaire to the eight IT managers who would eventually report to Maiorini. The questions ranged from “What is your understanding of the mission of IS in Millennium Teleservices?” and “What are your responsibilities?” to trickier items such as “What are Brian Pasch’s weaknesses?” and “What are the most significant business problems within the company?”

The answers were startlingly straightforward. The leadership team thought Pasch was brilliant, charming, likable…and indecisive. They viewed Maiorini as a robot.

“When a peer was plucked from their midst, identified as special, and elevated, it activated feelings of competition for the source of affection and power: Brian,” says Truhe. “So they attributed irrational amounts of negative comments to Leif.”

As a way to manage their anxiety, the IS group had cast Pasch as the good guy and Maiorini as the bad guy. Maiorini’s fellow vice presidents, all of whom had been hired by Pasch and reported directly to him, were worried about their positions in the new regime. But more important, they felt abandoned by Pasch, who they considered more a friend than a boss.

“When Leif first came in, Brian would say things like, ’I’m hiring another Brian,’” remembers Inna Zelepukina, Pasch’s first hire, who had risen to the rank of vice president. “It was hard for us to imagine there being another Brian.”

Truhe met with Pasch and Maiorini privately to present the results of her survey and explain the issues underlying the responses. “Although there were things in there that made me think, ’Wow, that is just messed up,’ I could understand it,” says Maiorini. “They just saw me as the wedge between them and Brian.”

For Pasch, the comments cut even more deeply. “I felt terrible for Brian because they just creamed him,” says Maiorini. “There were things in there like ’Brian doesn’t know what he’s doing,’ ’He’s making lots of mistakes now’ and ’Brian doesn’t like me anymore.’ You could tell that there was this emotional bond between him and certain people and they were reacting to what they saw as a betrayal of that bond.”

Pasch and Maiorini took a deep breath and decided to air the survey results in a meeting with the IS leadership and begin the intervention. The vice presidents were skeptical.

“They thought we were going to lie down on couches and talk about our feelings or something,” Pasch says with a smile. “Initially, I didn’t know what to think of the process or what to think of [Truhe],” says Rogers. But Rogers did know what he thought of Pasch: he played favorites, undercut Maiorini’s authority and, most important, abhorred confrontation. “And in this situation the one thing he hated to do most [confront people] was the one thing he had to do. So we needed someone here to guide us through that,” Rogers says.

Truhe explained to the group that for the sessions to work they would have to learn a new way of communicating. “When I gave them feedback it was important to discuss it in a way that allowed them to look at the group as a whole rather than trying to focus on who said what,” Truhe says. “In any business the essential unit of economic value is the group, not individuals. When you intervene at the group level, you maximize your ROI in organizational development.”

For the first six months of the organizational discovery process, Truhe met with the team once a week for three hours, talking about each theme she had culled from the discovery process. Among these themes was the anger over Maiorini’s promotion, intragroup conflict during meetings — some dominating, others arriving late, Pasch looking distracted — and anxieties about job stability. The point was to get the group to a point of common understanding about the way things were, good or bad.

“Organizational diagnosis is like an annual physical,” says Clayton Alderfer, director of organizational psychology at Rutgers University, where Truhe is a visiting faculty member. “It doesn’t presume that there’s anything wrong.” But the group agreed that they were a sick department, and Truhe stuck around for another year to work on the “treatment.” The IT leadership group continued to meet weekly until last February.

The Authority Thing

One of the first things that surfaced in the meetings was that Pasch’s desire to be pals with his direct reports — whom he passed on to Maiorini when he announced Maiorini’s appointment as CIO at Millennium’s 1999 Christmas party — was the source of much of the trouble.

“I had tried to have a very personal, intimate relationship with my direct reports. I wanted to be perceived by them as a peer and I denied the fact that I had any influence,” says Pasch. “One of the first things Chris [Truhe] helped me realize was that as much as I wanted to be their peer, I never would be.”

Pasch had been in denial, refusing to acknowledge the impact his authority had on his employees.

“Like the vast majority of leaders, he didn’t realize his own power,” explains Truhe.

Maiorini and Pasch also had been meeting with the vice presidents separately — another source of confusion. Unknowingly, the two often presented conflicting ideas or instructions. Managers thought it appropriate to go to Pasch to complain about Maiorini and vice versa. The result: Pasch and Maiorini were inadvertently contributing to the perception that there was a split between them, a notion that encouraged the directors to cling to the fantasy that Maiorini’s promotion could be derailed. Also, in an effort to stay close to his former direct reports by remaining available to them, Pasch was in effect holding onto the power he claimed to be passing on to Maiorini, undercutting Maiorini’s authority and thereby feeding the unease in the department.

“It was clear that [Pasch and Maiorini] needed to unify,” says Truhe. “They had to be physically present together with the group, disallow comments from the VPs to them about each other, and establish a chain of command with Leif at the top.”

As a start, they decided to begin meeting, with Leif leading and Brian contributing. “As a result, the managers saw that Brian and Leif were a team,” says Truhe. “They learned that they could still talk to Brian, but they couldn’t go around Leif to talk to Brian. The group started settling down. The anxiety was reduced. And Leif started to become a very effective leader.”

No Slips

Two years after their first organizational discovery meeting, Maiorini and Pasch say the results go beyond everyone just getting along. With “giving the bus” no longer common parlance, the company is much more efficient. Productivity, says Maiorini, is up 40 percent, based largely on reductions in the IT budget that would not have been possible in the preintervention environment. Before, each director of IS wanted as many people reporting to him as possible, believing that gave him an advantage in the never-ending competition for Pasch’s attention. Once the war ended, the directors stopped resisting cuts, and the six people who worked full-time loading and cleaning call lists were reduced to four, and the eight employees who worked to process the results of a day’s calls are down to three. The 113-person IS department has been trimmed to 90.

“We perform more support functions and spend $1.5 million less in people costs,” Maiorini says. And telemarketing hours — a measure of size in the industry — increased 50 percent in 2001 after stalling in 1999. Pasch says Millennium is now the fifth-largest telemarketing services organization in the nation.

But Truhe’s intervention, although clearly good for Millennium, was, in fact, hard on some people. One VP was asked to leave after it became clear that he could only see the meetings as an arena for finger-pointing and angry confrontation. “Two people fell out during the process,” says Maiorini. “But the thing is, it could have been everybody.”

The IS leadership team and Truhe think the changes in the atmosphere at Millennium will be lasting. “Often businesspeople want these off-the-shelf things that make it look like they made a change because they spent the money. Ultimately, nothing changes,” Truhe says. “But when you do something like this that’s slow and steady over time, you make fundamental shifts and you sustain them.”

“This is not something you slip back into. Nobody was watching out for this before,” says Rogers, noting that he hasn’t seen that toy bus in the conference room in months. “Before we were a group of managers, but we weren’t a management team. Now that we’ve experienced the benefits of being a team, no one wants to go back to the way things were, and everyone is watching out for it.”