The Agenda 2000 is Fast Company’s third annual report on the people, teams, and companies that are creating the future of business. Last year, we featured the following role models:
D. Michael Abrashoff, former commander of the USS Benfold, who uses a leadership model that is as progressive as any in business.
Tivoli Systems Inc., a fast-growing software company whose acquisition by IBM did not keep it from being a force for change.
The Mayo Clinic, where teams of doctors, nurses, and technicians bring new-economy practices to “old-fashioned” medicine.
The Freeplay Group, which creates products that use simple technology — while furthering an advanced approach to social justice.
Here’s an update on these four Agenda setters.
D. Michael Abrashoff: Leading a Wave of Change
What happens to a turnaround organization after its turnaround artist leaves to chart a new course? If you ask Mike Abrashoff, 39, the answer is “more of the same.” When he left command of the USS Benfold for a post at the Space and Naval Warfare Systems Command (SPAWAR), in January 1999, Abrashoff predicted, “Once you start Perestroika, you can’t really stop it.” And indeed, the $1 billion warship has maintained its status as one of the best ships in the Pacific Fleet. For the second year in a row, the Benfold has been nominated for the Spokane Trophy, which is given to the ship with the highest combat readiness. The Benfold also won the Battle Efficiency for Excellence award for its squadron, and it continues to have the best retention rate in the fleet.
Yet, for Abrashoff, a far more important measure of success is the legacy of leadership that he’s left in his wake. Lieutenant John Wade, for example, found the experience of working with Abrashoff so inspiring that he applied for a post as commander of his own ship. Wade got his wish, and today, at 31, he is one of the youngest captains in the U.S. Navy. He runs the USS Firebolt in the Atlantic Fleet, a ship that was plagued by low morale and a bad performance record when he assumed command. Taking a page from Abrashoff’s book, he spent his first days interviewing each member of his crew. “By starting there,” says Wade, “I’ve been able to rid the command of several ‘dissatisfiers.’ “
Abrashoff has seen his practices replicated throughout the Navy. The Benfold’s compressed training cycles are the basis for the Navy’s revised training strategy; Abrashoff’s humane adjustments to in-port duty rotation have become standard throughout the service; and his leadership lessons are now required reading in (among other places) the Navy’s admiral-indoctrination program.
As for Abrashoff, even on “desk duty,” he hasn’t lost his zeal for change — he’s simply expanded his field of play. He is working on a book about grassroots leadership, and he also speaks frequently to audiences at organizations such as Ericsson, GMAC Corp., and the Los Angeles Unified School District. “I use my own experience to show that the impossible can be done,” he says. “I let people know that there’s no excuse not to change.”
— Polly LaBarre
Tivoli Systems Inc.: Showing Its True Color
Despite a management shake-up last year, Tivoli Systems Inc. retains its purple hue, blending the red of its original logo with the blue of its parent company, IBM. Bolstered by explosive growth in revenues, in head count, and in market share, Tivoli has managed the rare feat of preserving its startup identity even as it becomes integrated into a larger company.
Back in 1996, Big Blue acquired the Austin, Texas-based outfit in hopes of injecting a devotion to speed into a mammoth and often bureaucratic organization. Tivoli excelled in an area that IBM wanted to make its own: software that manages large, dispersed networks, databases, and applications across multiple platforms. Rather than remake Tivoli in its own image, IBM put the Tivoli team in charge of the entire company’s systems-management division and granted the group an unusual degree of independence.
The results have been nothing short of dynamic. In 1999, Tivoli remained the fastest-growing division within the IBM software group, with revenues that increased from $1.5 billion to $1.8 billion. The company also added more than 1,000 new people, bringing the worldwide total to about 5,000; made several key acquisitions; and aggressively tackled new markets, including e-business and telecommunications-systems management. “We’ve been busy,” says Lynn Wilczak, 42, vice president of engineering central services.
Yet observers had cause to wonder last year whether Tivoli’s purple might be shading into blue. In 1999, several veteran senior managers left, including Martin Neath, formerly executive vice president. Neath, who became president and COO of Works.com in Austin, insists that his move had nothing to do with Tivoli’s acquisition by IBM. Rather, he simply longed for the challenge of doing a startup.
If people think that the introduction of a new leadership team means that Tivoli is losing its independence, they must be color-blind, says Wilczak. She would know: Before the merger, she worked at Big Blue for 16 years. “We’re acting like a big company now, that’s all,” she says. “I don’t want to use the word ‘structure,’ but there are now more things in place to help us manage a large global organization.”
— Chuck Salter
The Mayo Clinic: Creating Patient Progress
While much of the health-care industry seems to be in an intensive-care ward, the Mayo Clinic remains the very picture of health. In 1999, the medical treatment and research center, located in Rochester, Minnesota (with branch clinics in Arizona and Florida), saw more patients and hired more staff than it did the previous year. The clinic also continued to add patient services, including a Web site that will provide worldwide access to Mayo’s medical expertise. “We’re seeing some very nice trends emerge, especially in terms of new specialties,” says Dr. Patty Simmons, 48, a pediatrician and a board member of the Mayo Foundation, which oversees the clinic. At a time of rising costs, Mayo’s capacity to add such extras is, she says, “a symptom of organizational health.”
Mayo was founded more than a century ago as a “physician-led” hospital — as an institution in which doctors, rather than accountants, make key management decisions. Old-fashioned though it may seem, this model has enabled the clinic to weather fluctuations in the health-care market. When it comes to cost cutting, says Simmons, “it’s crucial that the people who make decisions actually know how those decisions will affect patients.”
Meanwhile, the real challenge for Mayo lies outside the clinic — in consumers’ changing attitudes toward how they receive health care. Every day, according to Mayo research, more than 10 million patients visit health-related Web sites, and Mayo wants to tap into that trend. The clinic’s own Web site, Health Oasis (www.mayohealth.org), offers a wealth of free medical advice. And this spring, Mayo will roll out a more sophisticated online offering — an “interactive health-education” site that will help users make their own health-care decisions. According to Simmons, the site will go a critical step beyond what most sites offer: “It’s for people who don’t just want medical information — they want to know how that information applies to them.”
— Paul Roberts
The Freeplay Group: Winding Up Success
The Freeplay Group spent the last year of the millennium scrambling to handle an overwhelming demand for its windup radios and flashlights — while continuing to break new ground on its social mission.
Freeplay, based in Cape Town, South Africa, has seen its flagship product, the windup radio, become a hot item in the United States and elsewhere in the developed world. Partly as a result, the company nearly tripled its revenues last year, pulling in about $50 million — far more than the $35 million that Rory Stear, 41, cofounder and CEO, had projected a year ago. Stear offers this index of his company’s success: Every 20 seconds, somewhere in the world, someone buys a Freeplay product.
Meanwhile, Freeplay’s products continue to serve as a lifeline to some of the world’s poorest people, as well as to people in war-torn countries. Its engineering team, for example, is creating a science curriculum for use in distance-education programs that rely on Freeplay radios. In 1999, 50,000 Freeplay radios were donated to refugee camps in Kosovo by the British Department for International Development, the British Red Cross, and the International Red Cross.
According to Stear, Freeplay aims to double its revenues this year, and plans are under way for taking the company public within the next couple of years.
“We’re trying to grow up,” Stear says. “We’re trying to go from being funky and by-the-seat-of-our-pants to being more organized. We want to improve on that front while passionately holding onto our entrepreneurial culture and our commitment to social justice.”
— Cheryl Dahle
The Agenda: Honor Roll
Grassroots Leadership: Royal Dutch/Shell
Humane Technology: PeopleSoft Inc.
Total Teamwork: SEI Investments
Sustainable Growth: Interface Inc.
Grassroots Leadership: D. Michael Abrashoff/USS Benfold
Fast Change: Tivoli Systems Inc.
Total Teamwork: The Mayo Clinic
Social Justice: The Freeplay Group