Successful Business Transformation


9 implementation principles that will guide you toward a successful transformation:

The problems facing every company are different. They largely depend on history, culture, capabilities, and information technology. However, the importance of vision and communication cannot be overestimated.


Therefore …

A clear vision of the tasks ahead and good communication skills will enable you to navigate around the most difficult obstacles and prevent the organization sliding back into its old habits. The following principles will guide you toward a successful transformation:

  1. Think like a revolutionary

  2. Build an urgent case for change and convince the board

  3. Establish a ‘guiding coalition’

  4. Create a compelling and coherent vision for change

  5. Communicate the vision

  6. Enable and encourage people to change

  7. Look for quick wins

  8. Work around the resistors

  9. Consolidate the gains and maintain the momentum

Ed: These are principals that form the core of my friends at the Beyond Budgeting Institute – bbrt.org – and form the business model of such diverse companies as AstraZeneca, Arla, Danfoss, Handelsbanken, HILTI, Lego, MAERSK, Michelin, Sodexo, SKF, Timpson, Volvo and many more.

But getting back to point number 2,

because it is crucial to discuss how we sell the case for change to the people that matter.

Who are the key ‘influencers’ that you need to convince?

In most companies, the two primary persons to convince will be the CEO and CFO. However, it is of great importance to engage the whole organization. I will get back to that later.

While the case for change might appear to be compelling to you, it can seem too vague and “in the future” for others.

Hard-pressed managers need more organizational change like a hold-in-the-head. Therefore, the reasons must be compelling and the case well prepared and presented.


So how do we convince key influencers?

Ask yourself the following questions:

  1. What will it involve?

  2. What are the costs and benefits?

  3. Which parts of the business are affected?

  4. Is this the only option?

  5. What evidence do we have that it will work?

  6. What are the risks?

  7. How long will it take?

  8. How will we know if we have succeeded or failed?

Addressing them objectively will strengthen your credibility and increase your chances of success even though these questions are difficult to answer. 


Remember …

One common pitfall of implementation is believing that the total transformation of the model can be driven by finance (or any other one function) alone, and failing to engage other parts of organization such as Human Resources or members of the management team.

Author: Anders Olesen – Director, Beyond Budgeting Institute.  E-Mail: info@bbrt.org

transformation

Curated by Trevor Lee

http://www.ep-i.net

http://www.ceo-worldwide.com

@trevorblee

 

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Experiential Discovery Learning


A guest post from Alan Matcham

Partner in Accelerance – Leadership for Business Performance

Bridging the knowing-doing gap

knowledge-2

Knowing is not the problem

Organisations are full of intellectually bright executives who have no trouble articulating a good game. Consequentially they produce an endless array of professional looking, well intentioned strategic plans, presentations, action lists, commitment statements and meeting minutes. The problem is that most, if not all, of these well intentioned initiatives fail to deliver on the majority of what they set out to achieve. This is known as; “The Knowing-Doing Gap.” The difference between what you know needs doing and what actually gets done.

Jeff Pfeffer the renowned Professor of Organisational Behaviour at Stanford Graduate School of Business and co-author of “The Knowing – Doing Gap” states it very clearly, “If you know by doing, there is no gap between what you know and what you do.”

Working with Executives over many years I have found there to be two constants in any effective learning or transformational experience. The first is the power of discovery and the second is the power of doing. Combined, these approaches have a significant impact in translating new insights into positive action. They are also inextricably linked because to discover you need to do and to do you need to discover.

This has huge implications for anyone involved in Executive Development. Designing interventions that make executives intellectually richer with more content, more concepts, more models, more theories and more plans runs the risk of fuelling the knowing-doing gap. On the other hand if you design interventions that are grounded in real business issues and learning by doing then the change that is sought will more likely be achieved.

Discovery & Doing

At its heart discovery is learning from the unorthodox and the unusual and appreciating there is learning in everything. It is about taking time to “walk in other worlds”, to get your hands dirty, to ask great questions, to let go, to see, to feel and to experience new, different and challenging perspectives and ways of doing things. In doing so the aim is to bring new and fresh insights to address an increasing array of highly complex and adaptive business challenges related to change, innovation, creativity, agility, collaboration and transformation

Organisations seeking to create a cadre of executives who will lead change, build a more innovative culture or transform their organisation in some fundamental way will not do so by seeking inspiration or insight from people in the same industry, with the same world view or with the same basic DNA. That approach inevitably leads to sameness not difference.

I go to a meeting with a group of managers who attended the programme. Met them earlier where they fired questions at me. Thought initially this programme was a bit weird.

What do visits to Salvation Army, eating in the dark with blind people and talking to researchers from Shell have to do with leading better in the bank? I was mistaken.

Entering and discovering a completely different world and to hear how motivated others are, how they take responsibility and innovate is an inspiration to think about your own role.

During the meeting today, I hear how participants take initiatives to break through their own ways of doing and realise concrete improvements. What triggers me most is that they do not talk about what others should do better, but what they themselves can do differently and better.”

Genuine quote

Chairman of a major European Bank – 2012

How and what to discover?

If you believe, as I do, that the ultimate aim of executive education is to help people think things through for themselves and their unique context then discovery should be at the core of any learning strategy. The role of the expert facilitator or programme director is to create the context within which discovery learning is optimised. This is achieved by encouraging a set of skills and behaviours which:

  • Develop curiosity

  • Develop the ability to ask great questions

  • Engage all the senses

  • Learn how to learn and find learning in everything.

  • Observe the world through different lenses

  • Experience and feel new or different emotions

  • Try new things through experimentation and testing

In my experience the most effective discovery experiences have tended to follow certain basic steps which are outlined below. Each step requires significant attention but perhaps none more than the actual execution of the experience itself. It is crucial that all participants play an active role and are fully engaged.

Over the years I have led many discovery experiences. Below are a few examples of what is possible and the learning that is available. All are based on genuine examples where the discovery experience has been tailored to specific learning objectives to help resolve specific business challenges.

The Discovery experience

The Learning

The Business Challenge or Issue

Junior school in rural China

Challenging the traditional system of learning

Culture change

Salvation Army in Holland

A cause worth serving, humility and compassion

Employee engagement.

Blind Community in Hong Kong

Overcoming adversity and working with all your senses

Collaboration, resilience and communication.

Creating and reciting poetry in Singapore

Everyone has capability and talent. Building leadership confidence

Effective communication and meaning making.

Playing Jazz and Blues in Chicago

Creativity and team work as well as fun

Interdependencies and team work. Joy in work.

Prisoner reform group in Holland

Changing deep seated behaviours and potential in everyone

Behavioural change and business transformation.

Monastery and meditation in Europe

How to reflect and be in the moment. Self awareness

Finding time to think and reflect rather than just do.

High end restaurant in Vietnam

Discipline, clarity of role, all one team and client insight.

Customer intimacy

Children’s charity for those out of mainstream education in UK

Engagement, trust, compassion and meaning

Personal and team transformation

In conclusion

Knowing is not enough and knowing more is not enough, the translation into doing is everything if meaningful change is to be achieved. Doing and knowing should not be mutually exclusive and the most effective executive programmes understand this and design in these critical attributes.

About the author:

Alan Matcham (alan.matcham@btinternet.com): Is an internationally experienced executive development programme director, facilitator and educator. A passion for making work fit for people and people fit for work. His expertise is focused on Leadership and Management transformation, working to release the untapped potential in all employees. He has a record of enabling public and private sector organisations rise to the complex challenges of the 21st century.

Curated by Trevor Lee

http://www.ep-i.net

http://www.ceo-worldwide.com

@trevorblee

A Check List for Entrepreneurs


A by-no-means exhaustive list but I hope useful for those in start-up mode.

• It’s usually better to have a co-founder than go it alone.

• Being an entrepreneur is not about being in love with an idea, it’s about being in love with running a company.

• Having a highly homogeneous (background, education, values, preferences, etc) very early team is better than not — cuts down on time-wasting arguments.

• If there is any doubt about hiring a candidate for your first 5-6 positions, there is no doubt — do not.

• You cannot hire a co-founder.

• Figure out one thing each of your investors is genuinely really good at, and insist they help you with that. Among other things it will save you from their help in other areas.

• Leadership by example is the most effective type. It’s a little irrational, but it inspires people.

• Have a cardboard box at board meetings where attendees must deposit their smartphones at the start for the entire duration of the meeting.

• If you have a co-founder, give them a board seat. If you can, keep one more for yourself, and leave it empty.

entrepeneur

Trevor Lee – EP International

http://www.ep-i.net

http://www.ceo-worldwide.com

@trevorblee

We provide C-suite services in the field of talent acquisition, development and retention.

Banking – A Sustainable Management Model


A banking industry leader like Handelsbanken has built

new management models.

BANKING 1

Conditions today are tough. Managers have to respond fast, the pace of innovation is accelerating, prices are driven by markets, customers are fickle, employees easily change their jobs and shareholders always demand more. Yet, while there is constant discussion of these forces and the need to raise company performance, organisation and management processes remain set in another age. Fixed strategies and budgets inhibit rapid responses, bureaucracy strangles innovation, functional organisation creates barriers to customer service and command and control demotivates employees.

To compete more effectively, organisations have to transform their hierarchies into networks of units with a high degree of local autonomy. Serving customers better must over-ride issues of hierarchy and internal power politics, and rigid management processes that create fixed performance contracts (such as budgets) must give way to more adaptive management processes. These are the main changes needed to build a coherent, systemic management model – also known as the beyond budgeting model – to enable whole companies to achieve sustained superior performance.

This model is now substantiated by the sciences most relevant to management today, complexity theory and behavioural science. A practical expression of the model is embodied in beyond budgeting’s twelve principles of devolved leadership and adaptive processes.

RADICAL DECENTALISATION
The underlying concept behind the new model is radical decentralisation. The organisation revolves around the customer and no longer around products and shifts away from static hierarchies to a flexible network of highly autonomous units. The consistently high profitability of Nordic bank, Svenska Handelsbanken, is the result of it focusing, for example, on customer satisfaction instead of product volume and market segment targets. There are no centrally organised product campaigns. The bank does not measure the profit or loss of its products, but instead focuses consistently on customer-profitability.

Derived from this strong customer orientation, the leadership and organisation is based on empowerment and responsibilities are distributed deeply throughout the organization. Decisions are taken as close as possible to the customer (i.e. in branches), which means they are made quickly, competently and at low cost. Over 50 per cent of Handelsbanken employees have individual lending authority. Internal suppliers of services have to live up to their customers’ requirements – and not follow some functional hierarchy. As a result, the organisation becomes even more decentralised.

RELATIVELY SUCCESSFUL
Highly decentralised network-like organisations need appropriate management processes to support them. Beyond budgeting emphasises adaptability. The fixed performance contract is superseded by a relative performance contract. It is of critical importance not to set fixed targets or budgets in advance, against which to measure a manager’s performance.

In place of them, relative goals help managers to compare their performance with the benefit of hindsight against competitors in their markets and peers within the bank.

Handelsbanken’s prime corporate aim is to achieve a higher return on equity than the average for its Nordic (including the UK) competitors. For the past 35 years, it has always surpassed this target. Bonus payments are distributed to employees in the form of profit sharing, based on the actual achievement of this relative goal. No fixed annual plans are made, because, instead of a static budget, planning is a continuous rolling process, which allows dynamic coordination and the use of resources according to need.

This management model, in Handelsbanken’s opinion, is the key to its sustained success. Its cost to income ratio has long been in the 40 to 45 per cent range, the lowest among Europe’s largest universal banks. In Sweden, its largest market, the bank consistently has more satisfied business and private customers than the average of its competitors.

Source material: bbrt.org

Trevor Lee – EP International

http://www.ep-i.net

http://www.ceo-worldwide.com

@trevorblee

We provide C-suite services in the field of talent acquisition, development and retention.

 

Why Mintzberg believes incentives should be scrapped


 

Management guru Henry Mintzberg believes that executive bonuses should be scrapped altogether. “This may sound extreme,” he notes, “but when you look at the way the compensation game is played – and the assumptions that are made by those who want to reform it – you can come to no other conclusion.

The system simply can’t be fixed. Executive bonuses – especially in the form of stock and option grants – represent the most prominent form of legal corruption that has been undermining our large corporations and bringing down the global economy.

“Get rid of them and we will all be better off for it.”

He lists five reasons why senior executives have failed their organizations.

1. They play with other people’s money – the stockholders’, not to mention the livelihoods of their employees and the sustainability of their institutions.

2. They collect not when they win so much as when it appears that they are winning – because their company’s stock price has gone up and their bonuses have kicked in. In such a game, you make sure to have your best cards on the table, while you keep the rest hidden in your hand.

3. They also collect when they lose – it’s called a “golden parachute.” Some gamblers!

4. Some even collect just for drawing cards – for example, receiving a special bonus when they have signed a merger, before anyone can know if it will work out. Most mergers don’t.

5. On top of all this, there are chief executives who collect merely for not leaving the table. This little trick is called a “retention bonus” – being paid for staying in the game!

So is Henry right?  Maybe some guidelines would help.

• Assume that people are motivated by self-fulfillment, not financial incentives.

• Base rewards on teams rather than individuals.

• Evaluate and reward team performance “with hindsight.”

• Give everyone a stake in success.

• Be wary of share options and restricted stock grants.

• Take employee recognition seriously.

 

Trevor Lee – EP International

http://www.ep-i.net

http://www.ceo-worldwide.com

@trevorblee

We provide C-suite services in the field of talent acquisition, development and retention.

The Servant Leader


Leader or servant?

Do the leaders in your organisation have a style tending more toward coercive, persuasive power. Are they larger-than-life figures, or are they more prone to a leadership style based on personal humilityand team support?

Larger-than-life leaders have played important roles in the business world, however if you are more comfortable with inclusion rather than coercion, you may be able to evolve a leadership style that is becoming recognized as a requirement for transforming organizations from good to truly great.

Servant leadership, which is based on the premise of service to a purpose larger than self, emphasizes a holistic approach to work; a sense of community, a sharing of power in decision-making and a vision. So how are servant-leaders different?

HANDSHAKE

Servant-leaders possess a mixture of personal humility and professional resolve. They are servants first, and the desire to lead flows from the desire to improve the life and work of those around and under them.

The servant-leader possesses:

  • High emotional intelligence

  • Ability to conceptualize beyond day-to-day concerns

  • Foresight

  • Commitment to the growth of others

  • Creativity

  • Regard for community (consciousness)

  • An ability for healing and restoring others

  • Empathy

  • Positive attitude

While the concept of servant-leadership may seem counter-intuitive to our image of leadership, results show its strength. The good news is that the talented leader can, with help and guidance, develop the skills of the servant-leader and create truly great organizations.

In summary is your organization on a journey from Command and Control to Coordinate and Cultivate ?

 THINKING

Trevor B. Lee, EP International

@TBLepi

Acknowledgements:
http://www.thtconsulting.com,
http://www.greenleaf.org
http://www.servantleadershipcenter.net

Build a Better Top Team


When your top team fails to function, it will likely paralyse the whole company.


Few teams function as well as they could. But the stakes get higher with senior-executive teams: dysfunctional ones can slow down, derail, or even paralyse a whole company. McKinsey in their work with top teams at more than 100 leading multinational companies, including surveys with 600 senior executives at 30 of them, they identified three crucial priorities for constructing and managing effective top teams. Getting these priorities right can help drive better business outcomes in areas ranging from customer satisfaction to worker productivity and many more as well.

TEAM BUILDING

1. Get the right people on the team . . . and the wrong ones off

Determining the membership of a top team is the CEO’s responsibility—and frequently the most powerful lever to shape a team’s performance. Many CEOs regret not employing this lever early enough or thoroughly enough. Still others neglect it entirely, assuming instead that factors such as titles, pay grades, or an executive’s position on the org chart are enough to warrant default membership. Little surprise, then, that more than one-third of the executives they surveyed said their top teams did not have the right people and capabilities.

The key to getting a top team’s composition right is deciding what contributions the team as a whole, and its members as individuals, must make to achieve an organization’s performance aspirations and then making the necessary changes in the team. This sounds straight-forward, but it typically requires conscious attention and courage from the CEO; otherwise, the top team can under-deliver for an extended period of time.

2. Make sure the top team does just the work only it can do

Many top teams struggle to find purpose and focus. Only 38 percent of the executives McKinsey surveyed said their teams focused on work that truly benefited from a top-team perspective. Only 35 percent said their top teams allocated the right amounts of time among the various topics they considered important, such as strategy and people.

3. Address team dynamics and processes

A final area demanding unrelenting attention from CEOs is effective team dynamics, whose absence is a frequent problem: among the top teams McKinsey studied, members reported that only about 30 percent of their time was spent in “productive collaboration”—a figure that dropped even more when teams dealt with high-stakes topics where members had differing, entrenched interests.

  • Correcting dysfunctional dynamics requires focused attention and interventions, preferably as soon as an ineffective pattern shows up.

  • Each top team is unique, and every CEO will need to address a unique combination of challenges.

  • Finally, most teams need to change their support systems or processes to catalyse and embed change.

Developing a highly effective top team typically requires good diagnostics, followed by a series of workshops and field work to address the dynamics of the team while it attends to hard business issues. The best top teams will begin to take collective responsibility and to develop the ability to maintain and improve their own effectiveness, creating a lasting performance edge.

© McKinsey & Co • Michiel Kruyt, Judy Malan, and Rachel Tuffield – 2011

WHARFSIDE

Edited by Trevor Lee,  EP International

@TBLepi