NETApp: Aligning Executive Experience

A leadership alignment simulation case study provided by BTS

Company Profile: NetApp's rapid growth—with 30 percent year-over-year growth and 37 percent headcount growth year over year—and dedication to being a great place to work (six consecutive placements on the Fortune "Top 100 Great Places to Work" list)—had set the bar high for aligning what had become a $3.3 billion company, up from less than $1 billion only three years ago. NetApp considers its employees the heartbeat of its organization, and needed to align its leaders, specifically the top 125 executives, around its future vision and consider the initiatives and changes that would be necessary to meet new growth goals. Additionally, the company's continued revenue and headcount growth presented significant business and people challenges.

The Solution—An Executive Alignment Experience: NetApp approached business simulations and discovery learning firm BTS to
develop a business simulation for its annual offsite meeting for its top 125 leaders. Including interviews with the senior leaders and subject matter experts, review of the original growth strategy plan created by company founder David Hitz, and development time, BTS created a customized board simulation with a dynamically competitive market in 60 days.

This simulation was structured around the company's main technology and the go-to-market and enterprise challenges associated with the company’s aggressive growth targets. It was co-designed using the NetApp Learning & Development methodology as a vehicle to propagate the new strategy, ensure strengthened business acumen and improved cross functional collaboration, and spark leadership excitement about where the company was going and what it was doing in the marketplace.

Over the course of three days—a total of 12 hours—participants were divided into teams, and required to manage the growth and profitability of a fictional business called "Pet-a-Toaster." The teams made multiple revisions of their financial forecasts based on their decisions and resource allocations, and were forced to adapt their strategies based on unexpected events, as well as marketplace dynamics.

In each of the three simulated years, the participants struggled with distinct challenges. In the first year of the simulation, emphasis was placed on having teams develop long-term strategies and make investments in technology, people, infrastructure, and processes to lay the groundwork to scale the business.

In the second year of the simulation, emphasis was placed on balancing short-term and long-term considerations. Participants faced a variety of obstacles and challenges, as unexpected events forced teams to make difficult trade-offs. The goal was to understand the most effective way to address immediate business challenges without derailing the long-term strategy.

In the third year of the simulation, emphasis was placed back on the importance of reaching future revenue goals. Teams were challenged to refocus on executing their strategic, long-term plans. Had they put the appropriate decision framework in place to reach their revenue goals ($10 billion), or would they run out of steam?

Subsequent to the success of the 2007 Senior Leaders' Meeting, these leaders, working with the L&D team and BTS, recommended and helped develop numerous initiatives to continue the momentum of the absorption of the new strategy through this learning experience, creating an organic, integrated leadership development program for the leadership of the entire company.

The NetApp L&D team and senior leaders also rolled out the Pet-A-Toaster simulation to all directors and senior directors (300) to drive alignment with and commitment to the new NetApp strategy through the leadership community. During these simulations, careful attention is paid to the feedback of participants, who, in essence, are working out the details of the new strategy in real time through the simulation, and looping the tactical information back to senior leaders.

In addition, based on executive recommendations, the NetApp L&D team and directors with BTS developed simulations for NetApp's professional Services (PS) Community to help them internalize the transformation they would need to go through for this new strategy and new behaviors for their day-to-day
success, and for NetApp's worldwide sales leader teams (delivered to all 400 at the annual worldwide sales leader conference) to help them identify new
behaviors for account management, field readiness, and channel leverage. Each of these then cascaded the knowledge to their teams.

The Team-Based Approach: Participants were divided into five teams of four to seven people and competed against each other in a dynamic market called a "world." In each of the four worlds,
125 participants competed against each other. Team performance was measured against two primary metrics: revenue growth, and operating profit. After each simulated period, BTS facilitated a debrief, which focused on drawing links between the decisions teams made and the impact of those decisions on meeting growth and profitability targets.

With the BTS solution, CEO Dan Warmenhoven engaged the top 125 executives in the company to consider the necessary decisions that will have to be made about technology, sales, infrastructure, competition, profitability, and growth tomorrow and in the next three years.

In his final presentation, Warmenhoven said, "You now have experienced our future vision and have weighed and debated many of the key issues, initiatives, and investments we will have to consider to make this vision a reality. Through this experience, I feel we have committed ourselves to accomplishing this goal."

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BTS is a world leader in customized business simulations and other discovery learning solutions that enable corporations to change, grow, and succeed. BTS adds value to its clients through three practice areas: Strategic Alignment & Business Acumen, Leadership & Management, and Sales. With approximately $80 million in revenues, BTS has 250 employees supporting 400 clients from 17 global locations. For more information, visit www.bts.com.