The promises we keep

DTE Energy had a culture problem. In 2005, the Michigan power company suffered from low employee engagement and declining metrics in everything from productivity to customer satisfaction. Gerry Anderson was there to do something about it. As the newly hired CEO, he launched a massive change initiative with training for employees, new incentives, and increased management oversight.

But the corporate change initiative didn’t work. While the higher expectations and increased oversight did improve productivity, employee morale remained low over the next few years. And right as Anderson and his team were trying to figure out a new approach, the global economy collapsed. DTE Energy lost nearly $200 million in revenue overnight.

Culture change would have to wait; this ship was sinking.

The company’s 2008 financial strategy went up in flames, and Anderson’s leadership team told him the only way to stay afloat was to lay off thousands of people. With genuine affinity for the employees of DTE, Anderson couldn’t bear the thought. Instead, he recorded a message for DTE’s 10,000 employees. He told them that the company had lost $200 million, it was getting worse, and the only option that he and his team could come up with was to lay off thousands. A wave of sadness and fear swept over the people watching that video.

But then Anderson looked directly into the camera and said, “I’ll make this commitment to you: The last thing we’ll do is lay anybody off. But, in return, I need you to bring your energy, your focus, and your intensity to our work like you never have before. And if you do that, if all 10,000 of us do that together, we can fix this.” Anderson didn’t have a plan, just a promise: Good or bad, we’re in this together.

When he refused to move forward with the layoffs, Anderson put his job on the line too. No one would have blamed him for letting people go in the wake of the greatest recession since 1929, but many, most notably the board and shareholders, would now blame him if this experiment didn’t work. Anderson bet his job to save theirs, and that’s what made his promise real.

Real enough to fuel change. The people of DTE became more innovative and creative than ever before. One team replacing a power plant control system realized that they could repurpose every part except for the circuit board. They completed the $30 million repair for just $3 million. Creative solutions like this sparked across the organization, and the company, surrounded by shuttering steel mills and auto plants, started to turn things around.

The shift happened so fast that Anderson thought their financial models were broken. The company tripled their stock price in a few years, prompting the governor to ask DTE to invest more money in Michigan suppliers. The company redirected over $922 million into the state’s economy. The people of DTE didn’t just save their jobs, they saved thousands for those around them too. A promise kept, indeed.

Anderson tried for years before the recession to change the culture of DTE. He had the change initiative, incentives, and communications strategy designed by experts in organizational transformation. It just didn’t work. And that’s because they forgot the most important thing: Driving real change requires that leaders have as much on the line as their people.

Good or bad, we’re in this together.

It’s a point made most vividly by General James Mattis. In April 2004, he climbed into an armored vehicle to meet with Iraqi leaders. On the way, insurgents ambushed the convoy and a firefight ensued. Despite the fact that he was a general in command of several thousand soldiers, Mattis drew his weapon, got in the dirt, and exchanged fire. When the battle was done, the convoy drove on to its destination, and General Mattis walked into that negotiating room wearing a uniform soaked in blood. Good or bad, we’re in this together.

To the promises we keep.

This is an excerpt from my last book, Work Songs. If you like words like these, you can subscribe to this newsletter.