12 months ago FORTIS decided to restructure into a completely outside-in managment model with highly empowered employees to win markets and scale better than competitors.

After 12 months with the new strategy FORTIS sees very early positive results in different metrics.

Context

FORTIS has aproximately 60 employees located in Hamburg and Bielefeld Germany. Most of the time we're dealing with SAP software solutions and with client-server related projects and services, from backends to state-of-the art frontends.

Until last year FORTIS was an IT service provider for a handfull of blue chip customers in Germany like 5000 of its competitors.

Since last year FORTIS has shifted its focus to being a company that strives for customer intimacy and happiness through IT-projects and related services by providing customized software, process and project managment.

Triggers

Within the first four years since it was founded in 2003 FORTIS showed amazing growth. After this successful period, however, the company was not able to continue this stable increase. Moreover, FORTIS was not able to gain new customers and different initiatives within the areas of recuitment, sales and marketing didn't help the situation.

In January 2010 we started a team to investigate the problem. The outcome of this analysis showed that FORTIS focused primarily on a short term success which had assured great growth during the first four years. This opportunistic strategy, however, did not work with customers on the long term.

We found one exception of a customer where we had continuous long term growth and upon deeper investigation into this case it became clear that this was due to our high intimacy with this customer. Only there were we able to respond to industry changes like acceleration of external triggers, and constantly changing customer demand appropriately.

This case in contrast to all of our other customers served as a wakeup call for FORTIS. We realized that without a drastic change in our strategy the long term success of our company was in danger. Finally, in mid 2010 we made the decision to develop a new strategy for 2015 and beyond.

Key Innovations & Timeline

We decided to build a new strategy.

First we agreed that our strategy had to be based on core company values. To build this part of a strategy we went back to ask ourselves some basic questions: Why are we doing what we're doing? What is the main value?

We realized that our main motivation is to create happiness and help our customers. Furthermore, we saw that we are able to do this when we are able to build a strong, trusting and intimate relationship with our customers. Our final mantra born in the process of developing our new strategy was "we are customer intimacy and we want to bring happiness to our customers". From this point, we realized that we had to review the entire company and to rethink our core approach.

During this process, we realized that we had to change our perspecitve on our customers, markets and internal structure. What we found out is that we were successful wherever we had an individual answer to each customers' needs. As a consequence we had to find a company structure and organization that was flexible in servicing different markets, different customers and different organizations. Moreover, the future company not only had to have individual answers to different markets but also to be agile and flexible to industry changes, customer needs and personal preferences.

The logical consequence was a company where decisions are made by the people who are closest to the individual customer -- the consultants. Our constultants at the customer side had to be empowered to be decison makers, and the current decision making detour via management had to be eliminated. In terms of company organization, this meant changing the company from a hierarchy with decision makers at the top to a flat structure with decisions being made at the ouside.

In order to institute this change at FORTIS we had to give up the existing hierarchy and to start coaching our staff members. We took Scrum as a model, analyzing how we could translate the values and roles of Scrum into an organizational approach. We invented "agile Business Teams" (aBT). These teams make up the company and strictly follow the ideas of scrum (i.e. no teamlead, high transparency, everyone decides, ...) with the goal to win their market.

Everyone within our company has the power to help decide what their team needs to win their market. The inside managment only does what the outside agile Business Teams request. The agile Business Teams make all of the decisions about what is necessary to win their market.

Our ultimate goal is to create happiness which first of all means the happiness of our staff members since we are convinced that if they are happy they will show high commitment, do great work and finally make our customers happy too. Create happy employees and happy customers and a sucessful prosperous company will follow - now we are back to the philosophical starting point!

Challenges & Solutions

Our new strategy had impacts on all people, on all levels and on all existing values of the company.

Here is a list of a few challenges and how we dealt with them:

Building a long-term strategy takes time, needs professional conduct and external coaching. We hired an exeprienced coach for developing strategies. This coach provided us with an external perspective and with state-of-the-art knowledge. The strategy team met many times for many hours during a period of multiple months.
Part of the management team and the overall team were strongly attached to the company's history and previous successes. They were resistent to change.
The strategy had to be communicated internally and externally. Communication during the roll-out was a key success factor for the entire strategy. We invited the entire company to a strategy roll out weekend excursion. Work-shops, games, entertainment and infotainment were elements of this extremly successful weekend. As part of the strategy, we installed an internal communication platform (like an internal facebook). Many discussions were carried out and many arguments surfaced early on. A new website was created with a new design.
Being agile and flexible means to be flexible and agile in all plannings, also in financial plannings. We plan on a horizon that makes sense, that is predictable. We call this flying on sight. This is not what investors wants to see. They want to have an outlook for the entire year, even if it is always wrong. We agreed with our investors to have a rough sketch for each year to help them adapt to the change. We are sure that the planning will decrease as the confidence in the new strategy rises.
For the management team employee empowerment meant to giving up control. Giving power to others also meant to see them making mistakes and loosing projects for the sake of gaining experience. It was a constant struggle for them not to jump in and to allow the agile Business Teams to adapt to their new power. All in all, it worked well.
Our teams were confronted with the challenge to make use of the empowerment. It is easy to make decisions with little concequences (like to buy a laptop) but it is much harder to take over responsibility for bigger decisions (like new hires). We provided all kinds of coaching and we encouraged everybody to take risks. One very successful point was that we announced that we would celebrate success and failures from now on. Everything was transparent and instead of being ashamed, teams should feel that they can count on support and help.
With our strategy, we count on the fact that the employees are self-motivated, inspired and interested in the overall success of the company. It was clear that some employees would not be able to adapt to this new environment and leave the company. We compensated with a new hiring strategy. More employees were involved, more people were hired from our network and the entire hiring process was speed up. At the end of the first year, the total number of employees was higher than before.
The new stragegy focuses on the success of the entire company. Everybody works towards that greater goal. That also means that individual bonuses do not fit anymore in this company. We are currently preparing a new remuneration system that does not emphasize individual success but rather company success.
Having powerful teams does not mean and should not mean that all teams have to develop their own processes and bureaucracy. Our goal is to have quick, easy and reliable results. One step in this direction is our new software, that collects and provides real time information to all users.

Benefits & Metrics

Our goals for 2015 are clearly defined. Currently, the status of all goals is green. Here is a quick overview:

Financial performance: our revenues and profits are at an all time high. We were a bit concerned that our financial situation would be weaker due to all the efforts and the turnmoil of implementing a drastically new strategy but we had an amazing year!

Hiring processes: We experienced nothing less than a revolution in the hiring process. Previously, only a few people were involved in hiring new employess. In 2011, we had a record number of applications, interviews and new hires, the average time from start until end was decreased by 75%, the number of people involved in recruitment quadrupled.

Order entry: Also here, we had a revolution. The number of people involved in project aquisition quadrupled. Additional order entries due to employee empowerment are clearly visible on many occasions throughout the company.

Hourly rates: Although the economy in Europe suffered in 2011 tremendously, the hourly rates earned by our consultants increased by 5%. We attribute this particular success to providing a better service to our customers.

Communication: Communiation is the backbone of our strategy, to our customers and also amongst the company. We invested a lot ot time in talking, presenting, coaching, asking and answering and we feel that we are on the right track.

Lessons

We had an interesting and challenging time implementing the new strategy. Here are some of the things we learned:

Real life: this is no lab approach or a feasability study, we went all the way until implementation. We tried to prepare the organization and at the end we flipped the switch. You cannot do those things half way.

Decision-making: People make decisions all the time in their personal life but when it comes to their professional life, they are not allowed to. This is very often due to two reasons: managers do not have full confidence in their employees and employees do not have full confidence in themselves. We believe in our people, we believe in their capabilities and we invite everybody to do the same.

Water-proof: A strategy has to be something absolutely waterproof. Tons of people challenge a strategy with questions and concerns, with ideas and critique. We are very proud that we had aplicable answers to literally all questions asked.

Upfront time investment: the investment in management time, in employee time, in meetings, in opportunity costs and in change management are high. It all paid off. We learned how important and how powerful communication can be.

Communication over processes: although more people work on more tasks, there are not more processes. We have only one mandatory process: track your hours. We are amazingly lean.

The Best: If you want to belong to the best, then you have to measure yourself aginst the best. We used top consultants in the strategy development, we had meetings in remote locations, we were faced with high expectations, used top literature and best practice. Our goal is to be among the top companies. This is also why we are participating in this competition: we want to compete with the best!

Credits

We would like to thank a number of people: Thomas Schüler, Anja Heins, Holger Koschek, Wolfgang Eckert, Joaching Bockhoff for their help and encouragment.

Special thanks to all FORTIS employees, you are the best and the success belongs to all of you.

Materials

You can find tons of information, a look at the company and our innovative homepage at: http://fortis-it.de/

Our strategy-in-a-nutshell-video is here: http://www.fortis-it.de/strategie/die-strategie-in-a-video-nutshell/

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