Levi's Changes Everything

That's why we launched this initiative. It's the largest change program in the history of the company. We've set extremely aggressive goals -- specific, quantifiable targets for customer service. They represent massive change. They're radical for our business. I signed on to lead this effort after we had established the initial targets. My immediate reaction was, "How can I do this?" But that's the point. If that wasn't my reaction, the goals would not have been ambitious enough.

How do you convince people in a company this successful that change is worth the risk?

You create a compelling picture of the risks of not changing. We let our people hear directly from customers. We videotaped interviews with customers and played excerpts. One big customer said, "We trust many of your competitors implicitly. We sample their deliveries. We open all Levi's deliveries." Another said, "Your lead times are the worst. If you weren't Levi's, you'd be gone." It was powerful. I wish we had done more of it.

We also collected magazine covers about great companies that were going through turmoil because they had failed to change. They weren't hard to find: GM, IBM, DEC. We blew up those covers, put them on posterboards, and carried them around the organization. It sent a powerful message: Do you want us to join this list?

So many efforts like this fail. What steps did you take early on to improve the odds of success?

We did a fascinating exercise in October 1993, midway through the design phase. We took 70 veteran managers from across the company and reviewed every major change program in our history. We went off-site for two days. We wrote on easels, filled up flip charts, basically created storyboards of change. Then we analyzed which programs had worked, which hadn't, and why.

We reached two conclusions. One, we're much better at starting change than finishing it. We get people excited, charge forward, then somehow the momentum evaporates.

The second conclusion -- and this had a real impact on us -- was that we haven't done a good job preparing people for change. That doesn't mean sloganeering. It means getting down to the level of real human beings. What do they worry about? What gets them excited? What new skills and behaviors do they need?

So we created a collection of resources to help people move forward: videos, seminars, workbooks, self-diagnostics. You can't expect people to change if you don't give them the tools. But we don't spoon-feed materials to anyone. We create opportunities for people to change, but we can't change them. They have to change themselves.

Getting Started

What are the first steps in a program this far-reaching? What's the Levi's model for making change?

I'd call it middle-up-down change. Our mission and targets definitely came from the top. This whole program began when Tom Tusher, our COO, and Bill Eaton, our CIO, convened a team of top managers to work on improving customer service. This senior team created the context for our work. They set targets, gave us permission to think big. But when it came to design and implementation -- figuring out how to meet the targets, what the new organization should look like, what kinds of jobs there would be -- the "middle" of the company took over.

In June 1993 we took 200 of our best people, pulled them out of their day-to-day responsibilities, organized them into 20 teams, and chartered them to reinvent the supply chain. People had to apply to become members of this group. I had to apply for my job. Basically, we created a company within a company with offices on the third floor of Levi's corporate headquarters. It was an intense, exhilarating experience.

What did it feel like on the Third Floor?

The Third Floor was a unique place. We understood that how we worked was as important as what we were working on. We had to model the behaviors -- the teamwork and leadership skills -- we needed at Levi's as a whole. That's one reason we decided there'd be no private offices. We turned all the offices into meeting rooms and put up a couple of hundred cubicles. People got a desk, a phone, a computer; that was it.

The cubicles were a great leveler. And they took some getting used to. Remember, we had some senior people in this group who were accustomed to nice private offices. One day one of the vice presidents was on the phone, singing "Happy Birthday" to his daughter. When he hung up everyone applauded. He'd forgotten he wasn't in his old office!

There were other stories. When we were setting up the Third Floor, someone complained that the walls were bare. So I called the person in charge of corporate art. She decorated beautifully -- posters, prints, paintings. She told me she felt protective of the art, that some of it was pretty valuable. About 30 days later she comes storming in. "I can't find any of the art! Your people are stealing it!" Of course, our people weren't stealing it. They needed the walls for charts. So they stuck the art in a closet somewhere. Or they tacked butcher paper right over it.