People selection got intense attention. Brown removed scores of underperforming executives. Under new leadership, the HR department (renamed Leadership and Change Management) developed a compensation system that linked rewards to performance, along with a Webbased set of evaluation tools to help line executives sharpen their assessments of their people. Also added
were extensive training courses for leaders at all levels, targeted to specific organizational needs. Leaders who couldn’t handle all the changes either got coaching or were removed.

Brown himself ordered an analysis of the sales staff’s performance and found, among other things, that 20 percent of the salespeople had sold nothing at all for the previous six months. He said to his sales executives, “What are you going to do about these people—and about their supervisors?” The 20 percent were replaced.

In its total impact on the company, Brown’s reorganization was far bigger and more complex than the one that brought Xerox to its knees. Brown essentially turned EDS upside down. The SBUs were rolled into a new organization of four lines of business (LOBs) centered on broad market segments. E Solutions would offer a complete range of services for the “extended enterprise,”
linked electronically with suppliers and clients, from supply chain networks to Internet security. Business Process Management would provide businesses and governments with administrative and financial processing and client relationship management. Information solutions would sell IT and communications outsourcing, managed storage,
and management of desktop systems. And A.T. Kearney would specialize in high-end consulting, along with executive search services. (EDS has since added a fifth LOB, PLM Solutions, which offers digitized product life cycle management—from development to collaboration with suppliers—for manufacturing companies.)

The new structure was more than a way to divide up business according to markets. It was designed so that EDS could fully leverage its intellectual capital for the first time, drawing on people from all parts of the company to provide solutions for clients. Collaboration among the lines of business would enable EDS to bring every client a value proposition based on its full “end-to-end” capability— from business strategy consulting to process redesign
and management to Web hosting. It wouldn’t work unless the people from the old business units learned not only their new jobs but also new ways of working together. At the same time, they were under orders to raise productivity at a 4 to 6 percent annual rate, making about $1 billion a year available for reinvestment or the bottom line. Moreover, the speed of new product introduction and delivery
could not slacken.

Taken from: Execution The discipline of Getting things Done