Maintaining a Consistent Culture during a Spin-Off
Written by Denise Ramos
In the years since ITT’s founding in 1920, the company has continually sought to enhance our ability to create value for our stakeholders. Our journey has transformed the nature of our company many times – taking us from what originally was a telecommunications business in 1920, to one of the world’s most well-known conglomerates in the 1970s, to a leader in defense, water and industrial markets over the last decade.
Last year, we took the next step – transforming once again to create more value – by spinning off our defense and water businesses and creating a “new” ITT, a diversified global industrial company focused on growing end markets such as energy, transportation and general industrial.
With more than 8,500 employees around the globe, we were starting life as a new company even though we had a strong legacy behind us. We had to ask ourselves: Who are we? What is our purpose? How do we build trust in this “100-year-old start-up”? In my new role as CEO I realized I had to first understand the DNA of this new company in a different way than I had before, so one of my first priorities was going out and talking to people.
I believe an important part of building trust is understanding other people’s frame of reference, so I began a lengthy tour of going to all our different businesses and sitting down with leadership teams, with employees and with our customers. I walked factory floors and visited with our customers, and I listened. I wanted to understand our employees and what makes them tick and get to know our customers and why they partner with us.
What I heard was a consistency of messaging coming from both employees and customers. While ITT is a very global company, there’s a core and a heart to ITT that transcends all kinds of boundaries that exist. It was so important to understand this consistency so that as we created the strategy for this new company, we could infuse it with the personality and values of our culture and people.
What came across clearly was the importance that our people placed on the ITT values of Respect, Responsibility and Integrity. These values had become ingrained in the company and how we thought about ourselves, and they mattered just as much as our products, brands or processes. I knew that for people to trust and believe in the new company and its strategy, we had to build it on these values.
So, with our people and values as our foundation, we began to think about who we want to be, what differentiates us and how we create value for the long term. Through this process, we aligned around three primary differentiators.
The first, as an engineering company, centers on technology and innovation. Our products are highly customized and are used in situations where the cost of failure is high – refinery pumps, airplane fuel lines, car braking systems. This means that a critical piece of who we are and our long-term success will be leading with technology and continuing to provide the durable, reliable solutions that leverage our technical competence and build trust.
The second factor is differentiating with customers. Because our technologies are customized and often embedded in larger systems, we must go beyond getting the basics right by truly understanding our customers’ businesses and their needs. We have a legacy of fostering trusting long-term relationships, and that will continue to be a key to our success.
The third factor is optimizing our work and focusing on processes that support quality, speed and efficiency. We have a long history of continuously improving upon the work that we do, and our employees are trusted to leverage our capabilities, from our Integrated Management System – which is ITT’s framework for running the company – to value-based processes and Lean Transformations to other strategic levers, to continue to drive our success in the future.
Once we identified these factors, we created a structure, which had people at its center, that included all these concepts – our DNA, our values and our differentiators – and this became The ITT Way. We worked extremely hard to make this consistent with who we have been, while at the same time embracing our essence as a new company, with everything pointing toward a common vision: the enduring impact we want to create in the world.
For me, this process was critical. By listening, appreciating our employees’ frames of reference and integrating that understanding into everything we were doing, we established an initial layer of trust and connection to this “new” company.
The next thing we did to foster trust among our broader leadership team was entrusting them to share and drive The ITT Way with their organizations and teams. Instead of rolling this out as a typical “campaign” from corporate headquarters, we leveraged our people as the medium and invited 150 delegates from around the world to a Leadership Summit where we empowered them to be the spokespersons for The ITT Way.
We thought that there was no better way to do that than to bring everyone together and help them not only hear it but understand and feel it. We took time to help our leaders answer the questions they had: What does this mean to me? How can I apply it to the life that I live every day? How can I then roll it out to the people that I work with and lead?
And since then, we’ve kept that conversation going. We’ve committed to ongoing communication and so, for instance, all of the delegates and I get on the phone once a quarter and talk about our financial and operating performance, as well as other topics that are top of mind. The point is that we have consistent touch points with them so that they are empowered to carry our messages into their teams and keep the momentum going.
I believe the approach we took embodies many of the elements that drive trust. We listened to and respected diverse viewpoints, enhanced transparency and communication, and extended trust to others. However, while what we have done so far is important, it’s just the first step.
In the days ahead, we will have to focus on continuing the momentum we have created. We are now further integrating The ITT Way into all of our structures and processes, and it has already become the cornerstone of our strategic planning process for our long-term business plans. Most importantly, our ability to keep and build trust will depend on how each one of us models The ITT Way every day.
Inherent within The ITT Way are commitments to setting high expectations, improving our capabilities, practicing accountability and delivering results. When we live up to those commitments, we will not only build trust and loyalty with our employees, our customers, our communities and our shareowners, we will tap into the best parts of our shared past and ensure a continuing journey of value creation for many years to come.
About the author: Denise Ramos is chief executive officer and president at ITT