Acxiom Rebuilds from Scratch
At Acxiom there are no fancy titles. Everyone's office is the same size, and nobody worries about going through the proper channels. The results? Phenomenal growth and a contented workforce.
November 28, 2002
|Twelve years ago, Acxiom Corporation’s chief executive, Charles Morgan,summoned his management team to a meeting to deal with a dire problem: peoplewere asking him to make too many decisions. Early each morning, he complained,managers began lining up outside his door. As the day wore on, the line gotlonger and longer. Whether the matter was great or small, everyone wanted hisinput.|
The problem was Acxiom’s organizational structure. It was too top-driven,too rigidly hierarchical, like some old-fashioned factory or mill. It simplydidn’t work. The Little Rock, Arkansas-based company was a young, rising playerin the cutting-edge field of "data mining"--amassing mountains ofinformation such as phone numbers, addresses, and demographic data for clientcompanies and sifting through it to identify potential new customers and serveexisting ones. In order to stay ahead of its competitors, Acxiom had to be quickto capitalize on business opportunities. More important, it had to be flexibleenough to meet its clients’ highly specialized needs. If Morgan was involved inevery decision, he told his managers and executives, the company would never beable to reach its potential. The organization had to find a new way to operate.
It was up to Acxiom’s HR team to meet Morgan’s challenge. Working closelywith the chief executive, they devised a radical solution. Essentially, HRdemolished the old corporate culture and built a new and startlingly differentone to replace it. Instead of the old conventional corporate hierarchy, itadopted a streamlined, flattened organizational structure in which titles becamerelatively unimportant. The top-driven chain of command was replaced by adecentralized, results-oriented environment in which managers of individualbusiness units now had considerable autonomy to make their own decisions--and tobe responsive to customers. Finally, instead of being confined by the boxes on aflow chart, employees were assigned to work on teams that cut acrossconventional departmental lines to focus directly on major customer and businessissues.
The Acxiom Business Culture, as the new organizational approach was called,proved to be a real shock to the system--in precisely the way that Morgan hadhoped. Since the program’s implementation in the early 1990s, the firm hasbeen able to sustain tremendous growth. The company’s revenues have grown fromjust over $100 million in 1993 to $870 million last year. The firm has becomethe dominant player in its field, building a client list that includes not onlyFortune 500 behemoths Microsoft and General Motors, but also 23 of the 25largest financial--services companies and six of the nation’s top 10 insurers.
Although it did endure a revenue downturn in 2001 like many otherinformationtechnology companies, Acxiom’s fortunes are again improving. In themost recent quarter, its earnings per share were up 75 percent over the samequarter in the previous year, from 8 cents to 14 cents. Revenues rose 9 percent,from $215.2 million to $235.4 million.
A major factor in the company’s success has been a dramatic improvement inproductivity that is due to the Acxiom Business Culture’s elimination ofwasted motion and decision-making logjams. Last year, for example, employeesmanaged to deliver a massive Web-based prospect database for a client in 45days--a third of the usual turnaround time for a project of that magnitude.
Acxiom’s internal environment is as healthy as its bottom line. It has beennamed on four occasions to Fortune’s list of the 100 best companies to workfor in America, and twice has made a similar list of best information-technology workplaces compiled by Computerworld magazine. As a result, theorganization has been able to achieve a voluntary turnover rate of 7.5 percent,lower than the information-technology industry’s 10 percent average. The highdegree of employee satisfaction is reflected in a recent survey, in whichthree-quarters of Acxiom’s employees said they had the opportunity "to dowhat I do best every day" in their jobs. Eighty-five percent said theirpositions provided opportunities to learn and grow.
By boldly reinventing an entire organization, Acxiom’s HR team enabled thecompany to achieve its potential to become an industry leader. For that, Acxiomwins the Workforce Optimas Award for vision.
Throwing out titles and tearing down inside walls Acxiom’s HR team startedout by taking a hard look at the company’s existing culture and questioningwhether the basic premises were relevant to the new, rapidly evolvinginformation marketplace. It didn’t make much sense to organize workers into ahierarchy in which advancement was based on educational level, skills, orexperience, because those credentials could become obsolete overnight. Thedistinctions by which individuals were ranked in an organization didn’t havemuch relevance to the company’s work. What really mattered was getting peopleto work together to create whatever products and perform whatever tasks thecustomers needed.
"We don’t want people to aspire to be called some title, or to be in acertain position on a chart, or to compete with the person at the next desk,"says Acxiom HR professional Jeff Standridge, whose responsibility isorganizational effectiveness. "We want them to aspire to do something to addvalue to the company."
Toward that end, the HR team did away with most of the hierarchical structureand job titles. In its place, they created a system with just four manageriallevels--company, division, group, and business unit. Instead of titles or ranks,Acxiom staffers--associates, in company nomenclature--are described by what theyactually do in their job, such as "computer operator" or "data entryspecialist." That principle extends all the way to Charles Morgan, who isreferred to not as the CEO but as "Company Leader." Similarly, HR itself wasrenamed "organizational development," which the team thought morespecifically described its role.
At company headquarters, the physical environment fosters the company’segalitarian culture. "In most hierarchical companies, for example, your statusis indicated by the size of your office," Standridge says. "We gave everyonethe same-size space, no matter what their role." That conveys anone-too-subtle symbolic message to new employees from the moment they walk inthe door. "At most companies, you spend a lot of time sizing up the internalcompetition and trying to climb over them. Here, you quickly see that isn’tgoing to work. So instead, you have to figure out how to make the best, mostimportant contribution that you can."
Some new hires find Acxiom’s lack of a pecking order disconcerting atfirst. Others find it invigorating. Lee Parrish, leader of the informationsecurity assurance team, came to the company two years ago from a firm with amore conventional hierarchy. "With my former employer, you had to go throughseveral levels of leadership to get something approved," he says. "I foundmyself repeating things over and over, which was frustrating and time-consuming.You had a job title, and narrowly defined responsibilities. Here, you have arole. Instead of a lot of wasted motion, you can reach out to people and spendyour time working on proactive solutions to problems. And because you don’thave to go through so many steps to get something approved, there’s a greaterwillingness to try new ideas. You feel more comfortable, because you know thatif something new turns out to be a mistake, you’re just as easily able to goin and correct it right away."
Playing on multiple teams
The unconventional, rank-free approach enables Acxiom to utilize itsworkforce talent in ways that a more traditional organization cannot. David Moix,for example, is a 29-year company veteran who rose from computer operator tovice president of information technology in the previous corporate structure.Today, the multiple-team concept allows him to spread his wealth of accumulatedknowledge and skills throughout the organization. "One day, I may be workingon a project with Charles Morgan, and the next day I may be on a team workingwith entry-level people," says Moix, whose work deals mostly with supportingAcxiom’s database applications across networks, and other IT issues.
Acxiom’s lack of emphasis on titles also allows capable employees to riseto positions of influence within their teams. "Because we don’t have thelayers of bureaucracy for a person to climb, it’s not as authority- andego-driven here as in normal corporate America," says Peggy Hunter, a veteranof the company’s sales force. "No matter who you are, you can deal with anissue head-on, rather than having to play the political game and carefullycouching what you say." If she encounters an issue involving one of her majorclients, she readily has access not only to the leader of the company’s salesorganization but also to company leader Morgan if necessary. "I’m one ofthose people who doesn’t care if you call me a janitor, as long as I get thechance to do my job," she says.
Because associates often are working for more than one leader, themultiple-team concept requires them to focus harder on managing their time andresponsibilities. It also requires team leaders to cooperate rather than competefor shared resources. They have to learn to talk to one another and tocommunicate effectively with their own teams so that the workforce is usedefficiently. The firm helps develop those skills within its workforce by puttingall new hires through a training course on what it calls "Acxiom-style"leadership, which emphasizes collegial skills such as listening with an openmind, leading by example, and developing a balanced perspective. To furtherreinforce those principles, the firm has its leaders evaluated annually bymembers of their teams.
Emphasis on direct communication
The effectiveness of "Acxiom-style" leadership is further reflected bysurvey results, in which better than 90 percent of employees agree with thisstatement: "I know what is expected from me at work." And 85 percent say,"I have the materials and equipment I need to do my work effectively."
Acxiom’s HR professionals deliberately have shaped the corporateenvironment to maximize such communication. Ninety-eight percent of Acxiom’sstaff work in cubicles, and those with enclosed office spaces are encouraged tokeep their doors open whenever possible. From new-hire orientation onward,employees are also urged to rely on face-to-face communication when possible,rather than just reflexively dashing off e-mails or instant messages. "Obviously,we still need to use those tools, because not everyone is in close proximity allthe time," Standridge says. "But if you’ve got an issue with someone, itworks better to sit down and talk with them."
Hunter, who travels extensively to work with Acxiom clients and telecommutesfrom an office in her home in a forest outside Eugene, Oregon, also says thatthe ease of internal communication is one of the program’s strengths. "Eventhough I’m not at headquarters, it’s easy for me to get things moving,because I can reach people directly. I can find the expertise I need over thephone. I don’t have to go through a chain of command, and wait until we canset up a meeting. What I’ve found is that I can spend more time on work thatactually makes money for the company."
Acxiom has found ways to utilize its own line of business--data-mining--toopen new lines of communication. The company has created an internal workforcedatabase that contains detailed information about job roles and expertise, andencourages employees to use it to find and contact potential project sources ofadvice or assistance. In case an employee can’t identify the right expert onhis own, the company also has grouped its workers into online communities aroundvarious subject areas and skills. They all can be queried simultaneously.
"If I need help--for example, I need advice from our technical experts onhow to do something with an Adobe Acrobat document--I don’t have to go throughchannels and talk to a manager or supervisor," Moix says. "Instead, I canjust hit the community with the question and get a quick answer. At Acxiom, theemphasis is on direct communication between individuals. Just as we have anopen-door policy, we also have an open e-mail policy."
Open, direct lines of access extend right up to the top executive’s office.Moix, for example, recalls a situation a few months ago in which a customerneeded technical information. The employee who was contacted had wide-rangingexpertise, but was totally unfamiliar with the area in question. Feelingstumped, the employee sent out a request for help through the system. As anafterthought, he included company leader Morgan’s e-mail address on therouting. "The next day, [Morgan] contacted me with the name of a person whocould help, and emailed that expert also to help establish the contact. This isa company where even the CEO will jump in and assist you with a simplesituation."
Now that the Acxiom Business Culture has freed him from employee traffic jamsoutside his office, Morgan has the time to provide that sort of help.
Workforce, December 2002, pp. 52-55 -- Subscribe Now!