By Mel Duvall  |  Posted 2005-01-13 Print this article Print

Technology and business executives who fail to manage the psychology of their projects do so at their own peril. Elisabeth Nash knew she'd have to coax good people onto a project to overhaul the processes and systems at the mortuary giant. Yet, they might

Meet the New Boss
Service Corp. has come a long way since the start of Delta Project. The company posted $2 billion in losses between 1999 and 2002, as it paid down $3.8 billion in debt used in part to finance the acquisition of 3,581 funeral homes and cemeteries in the 1990s.

At the same time, death rates were falling, from 9.4 deaths per 1,000 adults in 1990 to 8.5 deaths per thousand in 2002, according to the U.S. Census Bureau. High-priced traditional burials were down, while less profitable cremations were up. Nationwide, cremation had grown from 19% of all death-care services in 1995 to 26% by 2000.

The company needed to make a move, but was shackled by its information systems.

Ten to 15 years ago, Service Corp. had written three core applications: one for creating funeral contracts, part of which ran on Unix servers and the other part on ibmas/400 servers; one for managing records of cemetery operations, also on Unix; and one for managing money it held in trust accounts for customers, on AS/400. Because they were all separate, a field manager could spend 20 minutes logging in and out of different systems to perform the basic task of viewing a funeral contract and looking up the location of the related cemetery plot. He might even find that half the data wasn't computerized, but sitting in a filing cabinet at a regional office six miles away.

And flab remained from the hundreds of acquisitions. For example, Service Corp. maintained 22 versions of its basic funeral service contract, some differing only on where the company logo was placed on a page. Until Delta Project, no one had ever looked at all contracts side-by-side, so needless variations went undetected.

Delta Project's goal was to fix all these problems by developing a single set of procedures and a single system for handling contracts, burials, trust accounts and other company business. Waltrip made it Service Corp.'s top priority. The company would end up implementing procedures encapsulated in software from mortuary software vendor Hammond Management Information Systems (HMIS) in Nashua, N.H.

Delta, in mathematical terms, signifies a quantitative change. And the company decided it had to go outside its ranks to find a leader who could bring real change. To change the psychology of the project and the company.

An acquaintance of Nash's, who happened to be the manager of communications at Service Corp., had told the company's chief operating officer in 2001, Jerry Pullins, about Nash's work at Pennzoil-Quaker State. She had helped lead a cost-cutting effort at the $2.3 billion oil company across town that led to selling refineries and laying off 1,100 people, or 13% of a workforce of 8,500, in 2000 and 2001. Then, in October 2002, Shell Oil swallowed Pennzoil, at a price of $1.8 billion.

Pullins, knowing Delta Project was in the wings, invited Nash to share ideas about how to effect sweeping change.

During 19 years in a series of strategy and finance positions at Pennzoil, Nash had endured and, ultimately, led enough change plans to know that managing the psyches of key project backers and participants is essential.

Project sponsor, foot soldier, recipient—at one time or another, Nash had been all three. She didn't like what she calls the "slash and burn" approach to change at Pennzoil toward the end of her time there. The company asked her to find costs to cut, rather than processes to make better. That outlook "sucks your energy and enthusiasm," she says.

"I remember sitting in my office when I was a nobody and saying, 'If I were queen, this is how I would do it,'" she recalls. She would find better ways to do things, not just sell assets or fire staff. "These are people's lives. I'm not cavalier about that."

A week after meeting Pullins, Service Corp. offered Nash the job of leading Delta Project.

Coming in from the outside means a project leader can bring a fresh eye to old processes. But it can be uncomfortable—when you don't even know what those processes are.

Nash had attended funerals in her life, but she couldn't know the business nearly as well as Service Corp. staffers who had been with the company for a quarter-century.

"I didn't know anyone. I wasn't sure I could make it work," she recalls, sipping a Diet Coke at 8:30 on a recent morning. "I was scared to death."

To be effective, she couldn't afford to be pegged as simply another corporate vice president who doesn't understand what most of the company's employees do for a living. If she was going to succeed, she knew the psychological barrier of accepting a new boss would be overcome by establishing credibility--deftly and with good humor—with the front-line employees. By watching a funeral director's grace notes, like the suggestion of prayer cards in Chicago.

As she toured funeral homes and cemeteries, those managers saw she was sincere in wanting to learn about what they did. In short, she respected them. "They're paying my paycheck. Those are the folks generating revenue for the company," she says.

She also listened and acted on their concerns. For instance, when she heard that some funeral directors and cemetery managers felt left out of prior systems decisions, she immediately promised that they would always know what was going on. Nash now makes sure system and procedure changes, such as having funeral managers complete customer contracts online rather than on paper, are communicated via e-mail in advance or, when possible, in face-to-face town-hall-style meetings.

"What I learned was that everything comes down to helping that funeral director in the field better serve that grieving family," she explains.

But no manager, regardless of skill level, initially wins over an entire team. In those cases where Nash was blown off by staffers who didn't take her or the project seriously, she didn't become defensive. If push came to shove, she invoked the names of very senior, very respected executives she knew supported her plans, such as Tom Ryan, Service Corp.'s president, and Mike Webb, executive vice president of operations and the main sponsor of Delta Project.

"I said, 'Go talk to your respective food chains and hear from them their commitment. Don't just take my word for it,'" she recalls.

That tended to change any individual mind-set.

Contributing Editor
Mel Duvall is a veteran business and technology journalist, having written for a variety of daily newspapers and magazines for 17 years. Most recently he was the Business Commerce Editor for Interactive Week, and previously served as a senior business writer for The Financial Post.


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