Changing and Surviving in Business
A Practitioner’s Guide
By Thomas Kennedy B.Comm. FCA
The author:
Tom Kennedy is a Chartered Accountant with over thirty years in business and has extensive experience in Finance and in Human Resources including Change Programme Design and Delivery. In designing Change Programmes he has also studied the subject widely and made site visits to understand other approaches and has undertaken benchmarking studies.
This book encapsulates knowledge and understanding around the Business Change Process that has accumulated over extensive years as a practitioner.
Other works by the same author:
Targeting Performance
Available on line
Copyright 2009 Thomas Kennedy – all rights reserved
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DEDICATION
For Pat Connell whose energy, optimism and commitment to change I greatly admire. Pat and I did the Change Team work on ‘Plan 2000’ for the huge Guinness Brewery in Dublin. We had a great adventure.
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OVERVIEW
Business Change is normal. You can change or be changed. Stand still in business and you reduce your chances of survival.
However Change is a complex subject and if you wish to create a change ready organization there are complex activities that must mesh together in a balanced way to ensure success.
The approach of this book, with an emphasis on easy readability for the busy executive, is to set out the problem in a series of easy to read and remember grids. Each Grid is followed by further narrative on the topic represented by the grid.
The guide gives a comprehensive ‘to do’ list set out in grids
The Grids are:
THE OVERVIEW
THE MARKET DRIVEN ORGANIZATION
LEADERSHIP
STRATEGIC INNOVATION
FINANCIAL JUSTIFICATION
DETAILED PLANNING
RELENTLESS COMMUNICATION
NEGOTIATION
ACROSS BOUNDARY MANAGEMENT
COMPETITIVE TIME FRAME
Followed by: SUMMARY AND FEW LINERS
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GRID ONE
THE OVERVIEW
STRATEGIC INNOVATION
LEADERSHIP
RELENTLESS COMMUNICATION
FINANCIAL JUSTIFICATION
MARKET DRIVEN ORGANIZATION
COMPETITIVE TIMEFRAME
DETAILED PLANNING
NEGOTIATION
I am adopting a working assumption that you, the reader, are prepared to stand in the future and are prepared to describe in a few sentences of ordinary every day language how you think your company should look and feel when it arrives at the end of the next stage of its business change journey. Of course experience will show you that rather like climbing an endless mountain, every ridge you climb over will reveal further heights to climb. But don’t worry you can do it, and change is a journey not a destination.
Ask yourself. Would I hire me myself as the person to undertake this journey?
Be honest now. Don’t expect to have all the talents needed. Do be prepared to form alliances and team up with those who will assist on the journey. Remember a team can be stronger than the sum of all its parts.
This is not a very long Guide and I have tried to make every sentence count. So don’t rush it. Take time to reflect. Open the mind. All you need are a few powerful ideas. You can tailor the rest to the specific needs of your organization.
When do you make changes?
Is it when absolutely necessary, when the company is on the ropes and the wolf is at the door?
Yes of course, but when is the best time to institute changes?
The best time is when you are strong. When the profits are good and the outlook is fine. That’s the best time.
If you are up, then down may be just around the corner. When you are strong you have resources and resilience. The banks will listen to you. The parent company will listen because with your performance you will be one of their darlings of the hour.
Don’t wait for the future to come to you. Seize the moment. Continue to build and grow strong. Continue to plan and do try to stay about five years ahead of the curve.
If you are a unit within a multinational don’t wait for the initiatives to come down the line. There will be lots of programmes from the top. But within an organisation with International Sourcing and Globalisation there is no safe niche. The unit that awaits instructions from above will put its fate into very ruthless hands. Keep the initiative, strive to differentiate and to be perceived in the Group as leading edge and or as offering some unique something which puts your unit up there with the best in class.
Change is hard work. Be aware your company may become war weary with constant change. It is necessary to constantly reinvigorate the process to maintain the excitement.
Yes, excitement, it is exciting to be doing new things and to be in control of your destiny.
I believe people like change. But what they don’t like is to be changed. So they have to be brought along with the process at all times.
Lose your people and you won’t be able to lead. Leadership is only possible with the consent of the led. Of course you can slash and burn, especially in an emergency, but at minimum you have to bring the survivors along for the rest of the journey.
When the need for a Change Programme is first articulated there is a tendency to go into task mode. ‘Lets count the bodies, how do we cut the numbers, what capital spend do we need?’
Even in an Emergency we cannot become headless chickens. We must keep our heads even if others are losing theirs. Of course you may feel the need to get going if your job is on the line. But there is no worse disaster than running in the wrong direction!
So stand back and consider:
We need a Directional Framework. In the grid there are three headers that ensure we have the right direction and approach
Market driven organization
Leadership
Strategic innovation
We are talking major change in this guide.
This means talking about turning the Organization inside out. We will be setting out to obtain consent from those who will have to undergo the change. Almost, as one of my pejorative colleagues once remarked, we will be asking turkeys to vote for Christmas.
Not turkeys. People, people with real lives, families, hopes and aspirations, energy and commitment.
They will be asked to change radically how they do business, perhaps including some radical downsizing.
We need a framework that can stand the test of logic and reality.
When we have our strategy we will need delivery mechanisms for the Change Programme.
These are considered under
Detailed Planning
Relentless Communication
Negotiations
There are also Up-line and Inter-company aspects of the Change Programme
These are covered in
Financial Justification
Across Boundary Management
Competitive Time frame.
We will deal with each in turn. But do remember the need to pause and take stock.
Setting the Strategic direction of the business is the first priority. Change as envisaged has to be relevant and not ’Change for Change sake’. The Change plan must sit with the Business plan.
Each topic in this Summary Grid is developed in a separate grid to follow. The key message here is that successful Change requires co-ordinated movement on a number of fronts.
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GRID TWO- THE MARKET DRIVEN ORGANIZATION
PRODUCT PORTFOLIO
APPROPRIATE STRATEGY
CUSTOMER DRIVEN
PRODUCT QUALITY
INTERNAL CUSTOMER
COMPETITIVE PRICING
LINKS TO BUSINESS STRATEGY
CUSTOMER SERVICE
In a large organisation it is possible to think of the customer as somewhere else.
Production units are often seen as sources of supply that should push the product out through a hole in the wall and not think outside their own internal processes.
I presume it is self-evident that a Company should be driven to serve the needs of the market. Sales completed and paid for are the blood of the business. Without cash flow nothing is possible.
To be world class we need to start with a Market Review.
Where is the customer going? How are the customer’s needs to be anticipated and served? The customer of today expects change and improvement and some excitement about his purchases, how are you giving this?
In this day and age Product Portfolio can be a narrow definition. The customer buys a package that includes Product, but also service and delivery, follow up and quality.
A word about the Internal Customer:
Many large organisations do not serve directly the customer.
Baggage Handlers in an Airport probably don’t work for the Airline and never meet the customer. But their activities have a major impact on the perceived value of the airline ticket. Are they servicing the Airlines customer needs to a world-class level?
Similarly large production units have no direct interface.
But everyone has an internal customer. The Raw Materials Function will have a customer in the Production Function.
These customer interfaces are measurable and quantifiable. Delays, outages, wrong delivery are all measurable. What can be measured can be monitored. It is possible therefore to drive customer consciousness down into the organisation by developing the concept of the Internal Customer and to set measurable delivery parameters between Internal Customer and Internal supplier.
Check it out:
Product Portfolio - Are there enough new and innovative products in the range. Where are they going in the market place? Can new markets be created with new customers?
Customer Service how does the total package measure up in terms of response time, delivery, reliability, follow-up and speed?
Product quality - how does quality shape up to customer expectations. Are we the best for the price?
Competitive Pricing - No good if everything is best of best if it is too dear for the customer. How are margins, can the margins fund growth and investment and new product development as well as generate shareholder returns?
So an Appropriate Strategy to serve future customer needs must be in place and understood before we develop a Change Strategy. Otherwise efforts may be miss-directed.
When the Customer Strategy has a shape it can then be a cornerstone. Ensure it links to the Business Strategy before designing the Change Programme.
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GRID THREE - LEADERSHIP
TRUST
RECOGNISE NEED TO CHANGE
STAND IN THE FUTURE
APPEAL TO THE HEART
ARTICULATE VISION
CULTURE
DEVELOP LEADERS
DEVELOP ORGANIZATIONAL CAPABILITY
Everything starts and ends with leadership. If you are a leader, ask yourself. How do I make a difference around here?
Do not confuse Leadership with managing. Managing is an administrative activity.
Leadership is about courage, enthusiasm, being demanding of self and others. Leadership springs from the well of drive and enthusiasm. It is visionary, confident and inspirational. Leadership requires an ability to be lonely and to speak out when the truth needs to be spoken, to inspire trust and to have integrity.
However leadership is not about one leader. A leader can go it alone but will not defeat the great unmoved. A leader has to be able to form coalitions of like-minded individuals who will put their careers on the line to support the Leader so as to foster and drive change in the organization.
There are all sorts of personalities in an organization. Beware the political animals. They may look like leaders but will dance on the strings of political correctness and disappear when it is necessary to take initiatives that involve risk or challenging up-line.
A good definition of Culture is ‘the way things are done around here’
The Leader sets the tone for the way things are done.
The leader also has major influence on the Management style. He must:
Develop trust. The first inclination of people is to give of their best. This implies trust.
Develop leaders. The key role of the leader is to develop the capability of the organization to handle change
Excellent leaders don’t appeal to the wallet. They appeal to the heart. They recognise that people contribute more fully when they feel included. They communicate by involving. They recognise that monetary reward is not the only form of recognition. They look for reasons to say thank you, to give public acknowledgement of personal or team achievement. They invest in people through coaching and involving them in task and project groups.
The leader sets principles around behaviours by indicating what is acceptable and what is not.
For example:
In the area of Feedback a leader might postulate the following
Acceptable Practices
Straight Talking
Frank disclosure
Specific to the issue
Not acceptable
Shoot the messenger
Avoidance of issues
Leaving things hanging
Personalised rather than on the issue
Again for example;
On Open Communication
Acceptable Practices
Honest disclosure
Sharing information
Active listening
Emphasise informality
Not acceptable
Unnecessarily restricting information
Economy with the truth
Hidden agendas
Over reliance on funnels of communication
The Leadership Team is responsible for the survival of the firm. They must constantly stand in the future and ask questions around direction. They must articulate the vision, build trust in those who follow their lead and appeal to the pride and the heart of those in the workforce.
The Leadership must assess the possible impact of the proposed Change Program on the Organization and assess the risks and likelihood of successful achievement. The day to day has to continue and there must be a plan to develop organizational capability around managing the changes. This may require setting aside managers who are not change-orientated reorganization to free up resources, recruitment and use of consultants.
Capability gaps should be analysed against that required for future plans and appropriate steps must be taken as soon as possible.
Reorganization to face future challenges will send powerful messages into the organization.
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GRID FOUR
STRATEGIC INNOVATION
SIMPLIFY
NEW COMPETENCIES AND CAPABILITIES
STRUCTURE
PLANT & PROCESSES
CUSTOMER FOCUS
INFORMATION SYSTEMS
RADICAL AND INCREMENTAL
COMPETITIVE ADVANTAGE
Strategic Innovation requires the creation of combinations of actions hitherto thought to be impossible. This requires a systematic programme to look at new methods of operation in every part of the organization.
This need stems from the recognition that generic strategies are not enough to Survive. We must go further and expect to be a world-class business. We must make step changes that lift the business to new levels.
It is necessary to resolve the dilemma of opposites and to deliver both low costs and high quality.
In today’s world we must deliver ever-higher quality whilst continuing to lower costs. Margins must be generated through new product development and new services not currently on the menu.
Strategic innovation need not necessarily be new but it will be new to your business.
It is important to benchmark with the best. A company in a different line of business may be the best in class at some aspect of your business, e.g. order procurement or distribution. Research the environment and adapt to your world.