Issue: Mergers and acquisition, culture change, teaming, trust, virtual workforce, turnover

Solution: Train leaders and employees in virtual team skills

Results: Reduced attrition by 20%, while improving communication, collaboration, and teaming

“Financial hot spot” might not be the first words you’d use to describe Baltimore Maryland, but global asset management firm Legg Mason has enjoyed 38 years of success at its headquarters there, and has grown from a regional brokerage business to a true global asset manager—managing assets in excess of $923 billion.

Legg Mason prides itself on the diversity of its assets and managers, the integrity of its 4,000-person employee base and its prowess at identifying and acquiring well-managed asset management firms to add to its portfolio. In the words of Sioux Thompson, Head of Organizational Development, “For much of our history, things were just humming along.”

Then Legg Mason embarked on a dramatic change in direction, internally referred to as “The Deal.” The deal involved moving 3,500 Legg Mason brokerage employees to Smith Barney/Citigroup while acclimating a new pool of asset management employees from Citigroup and simultaneously running the business and retaining key people in the midst of profound change. As a result, two dramatically different cultures emerged and the needs for people development and infrastructure to manage change escalated. Several additional factors complicated the deal. Trust was low, there was much to be done to integrate the new teams, and communication problems were rampant. Most important, Legg Mason grew overnight from a regional, domestic business to one with employees in 12 countries, many without even a phone system.

The Legg Mason Technology Services team was the first area that asked for help. The company needed to get people and systems up to speed in order to improve and streamline communication. Thompson explains, “Technology people aren’t always ‘people people’ or great at embracing change, so we started with this division first.” A key challenge for this division was the virtual nature of its structure. “We had staff in 12 countries and nine time zones who’d never worked together. As you can imagine, teaming and trust weren’t high at first.” On the HR side of the business, the organization was dealing with similar issues including decentralization, merging diverse groups, and overcoming objections to change. Another key challenge facing HR was its almost 25% attrition rate within the HR function.

Thompson was faced with a difficult challenge: get the organization in synch and up to speed and get it done quickly. She began searching for a partner with experience in building virtual teams. Because of Legg Mason’s prior experience with The Ken Blanchard Companies and their Situational Leadership II (SLII) Model, Thompson felt that the Blanchard’s Virtual Teams framework, which also utilized a version of the SLII Model, made sense for their needs.

Legg Mason and Blanchard developed a comprehensive training plan using pre-session Webinars to introduce key concepts, and pre-training assessments to benchmark perceptions of trust, attentiveness, and communication. Training was then delivered over a two-day period and focused on managing virtual teams. Virtual Teams Tool kits and follow-up and reinforcement strategies ensured that the new concepts would take hold in the organization. In addition to providing training, the organization committed to a set of team values, mission statements for all functional areas, a renewed focus on career development, teambuilding events, norms for virtual teams, regional visits and staff meetings to enhance connectedness, and using assessment data to shape the annual planning meeting.

While changes didn’t happen overnight, the difference since “The Deal” began has been overwhelming. Relationships have improved, trust is dramatically more apparent, and people are working together better than ever before. Thompson remarks that one of the biggest changes is in people’s ability to recognize relationship skills or their absence, in new colleagues or vendors. “People know how to develop relationships virtually now,” Thompson says. “And they’re more comfortable having tough conversations. People don’t hide behind email anymore and they take an active role in teaching and coaching others in Virtual Team skills.”

And the numbers speak for themselves. Attrition has dropped from a whopping 25% to just 5%. What’s more, Legg Mason believes that their newfound abilities to master virtual teaming have helped to keep them steady even in a time when most financial organizations are in upheaval. “We would not have achieved any of this without the partnership with Blanchard,” Thompson says. “A key to our success was Blanchard’s ability to listen and to be an honest and credible sounding board with viable solutions.”