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White Paper produced by Roberston Executive Search on Business Transformation
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Executive Briefing Series �In Conversation with�� Presented by Robertson Executive Search Contact: [email protected] [email protected] L10/ 155 George Street, Sydney AUSTRALIA 2000
In Conversation With�
Bob Hennessy Chief Executive Officer
BearingPoint
�Change Management: IT Enabled Business Transformation�
October, 2010
Executive Briefing Series �In Conversation with�� Presented by Robertson Executive Search Contact: [email protected] [email protected] L10/ 155 George Street, Sydney AUSTRALIA 2000
Introduction
Change and transformation have become core organisational activities
that have become central to how organisations gear themselves for
competition, deliver ongoing increased margins to shareholders and
better products and services to customers.
A PwC 2004 study of 200 companies found a clear link between
change management, high performance and a high project
management maturity level. They found that 59% of project
failures are caused by organisational aspects.
The key to unlocking value is how change is perceived and the
degree change is embraced in organisations. Information
technology is central in delivering high impact outcomes.
Bob Hennessy, CEO of BearingPoint and several key CIO�s and
executives from leading Australian organisations gathered at
Robertson Search to discuss how they and their teams manage
change and share their collective experience.
What is central to change/transformation programs?
Bob shared his early experience with change management, circa
1982, with respect to the steel industry. The organisation wanted
to change the production methodology from specific runs of
Executive Briefing Series �In Conversation with�� Presented by Robertson Executive Search Contact: [email protected] [email protected] L10/ 155 George Street, Sydney AUSTRALIA 2000
products to instead, produce what clients needed at any
anytime.
Bob shared how he and his team built a change management
prototype to determine the effect and impact of the change in
processes. This enabled him to �sell� the concept to the larger
organisation and especially the workforce.
Bob contrasted this experience to a change program that he
dealt with in 2010: this Fortune 500 company was commencing a
$2billion change program and was advised it could be done in a
16 week period, by their advisors. It became clear in the post
implementation review, that 4 to 6 of the key stakeholders
admitted to not owning let alone knowing, about the project.
Suffice, it to say, this program was not successful.
These examples highlighted the dilemma faced by executives:
when will organisations and change leaders learn and practice
the essentials of managing change, successfully?
A few years ago, McKinsey published a study based on 40 large
scale industrial change projects. They found that the ROI of such
projects was 143% when an excellent Organisational Change
Management (OCM) program was part of the initiative; but only
35% when there was a poor OCM program or no program.
Executive Briefing Series �In Conversation with�� Presented by Robertson Executive Search Contact: [email protected] [email protected] L10/ 155 George Street, Sydney AUSTRALIA 2000
The 11 most successful companies in the McKinsey study had
excellent OCM programs and shared the following features:
* Senior and middle managers and frontline employees
were all involved;
* Everyone's responsibilities were clear;
* Reasons for the project were understood and accepted
throughout the organisation.
�Change management or transformation is all about
and around people � not just systems or the next great
methodology (which assists with program management but
is not about the process of managing change).�
What are the stages of transformation?
Bob spoke about stages of transformation and where change
management fits within project life cycle or transformation
program and made the point that change management is not a
�nice to have� but a must have to avoid failure.
The three stages of transformation that he highlighted were:
1. Positioning the strategy defines the new business model
and operations
2. Realisation implements changes across people, process
and technology
Executive Briefing Series �In Conversation with�� Presented by Robertson Executive Search Contact: [email protected] [email protected] L10/ 155 George Street, Sydney AUSTRALIA 2000
3. Transition migrates customers and operations from the old
to new order
The diagram above illustrates how transformation management
is essential in:
1. the positioning of the business strategy with all stakeholders;
2. ensuring that there is a cohesive and transparent strategy to
manage this change
3. how to transition to customer migration.
What are the risks involved with change?
Bob went on to discuss the risks involved with change:
1. Leaders assume the organisation is ready for change.
2. Not enough people know the business reasons for the
change.
3. Top and middle management do not support the change.
4. The change is developed without input from those whom it
affects. This problem is compounded by inadequate
information sharing before, during and after the change.
1. Positioning
2. Realisation
3. Transition Reta Wholesal
Governance
Program Management
Vendor Management
Architecture / Design Authority
Business Representation
Transformation Management
Bundling & Pricing
Business Model
Core Capabilities Partners /
Suppliers
Value Proposition
Marketing
Target Customer
ChannelsCustomer Service
Bundling & Pricing
Business Strategy
Core Capabilities Partners /
Suppliers
Value Proposition
Marketing Target Customer
Channels Customer Service
Process
Transformation Customer Problem
Campaign
Sales
Order Provisioning
Billing & Receivables
Service Monitoring
NextGen Systems
Billing / Collections
Order Management
Website / Portal
HR, AR, GL
CRM Ticketing
Workforce Infrastructure Management Inventory
Leadership
Organisational
Change Culture
Motivation Structure
Roles / Responsibilities
Communications
Products
Customer Migration Data Migration
Data Quality Relationship
Satisfaction
Communications
Executive Briefing Series �In Conversation with�� Presented by Robertson Executive Search Contact: [email protected] [email protected] L10/ 155 George Street, Sydney AUSTRALIA 2000
5. Managers� and employees� job roles, accountabilities and
performance metrics define and reward the �old� way of
conducting business.
6. Employees lack or do not receive the knowledge and skills to
make the change.
7. Leaders do not budget resources to help avoid the first
six risks.
What are the critical success factors?
1. Organisation & Governance
Transformation Program outcomes should be aligned to
strategic objectives and executive performance metrics
Executive leadership and commitment to Transformation
Program is critical
Strong stakeholder engagement
Balancing innovation and risk against strategic objectives
2. Change & Communication
Effective, consistent and timely communication at all levels of
the organisation
Ensure a comprehensive change management program to
embed the Transformation into the organisation
Embed a culture of continuous improvement that continues
post Transformation Program
3. People
Executive Briefing Series �In Conversation with�� Presented by Robertson Executive Search Contact: [email protected] [email protected] L10/ 155 George Street, Sydney AUSTRALIA 2000
Acquire and / or leverage best possible available expertise
Leverage vendor capabilities
Integration of existing suppliers (if relevant) into the
Transformation Programme
4. Finance
Sufficient budget via the submission of a successful business
case, to allow delivery
Iterative Financial and Statistical Analysis
Articulate benefits from Transformation Program and track
through to realization
5. Approach
A robust and empowered governance, to ensure that the
program delivers on time, to cost and quality
Sustained support from the Executive Stakeholders
Robust risk management
6. Information
Ensure metrics are specific, measurable, achievable, realistic
and timely
Ensure metrics are accessible
Why transformation projects fail?
Bob spoke extensively about this topic and out lines the following
errors and model:
Executive Briefing Series �In Conversation with�� Presented by Robertson Executive Search Contact: [email protected] [email protected] L10/ 155 George Street, Sydney AUSTRALIA 2000
Error #1: Not establishing a great enough sense of urgency
Error #2: Not creating a powerful enough guiding coalition
Error #3: Lacking a vision
Error #4: Under communicating the vision by a factor of ten
Error #5: Not removing obstacles to the new vision
Error #6: Not systematically planning for and creating short
term wins
Error #7: Declaring victory too soon
Error #8: Not anchoring changes in the corporations culture
The �Australian� Factor
Bob further highlighted the �Australian� factor. In his experience
there is a greater degree of complexity and depth in the supply
chain and management thinking in Australia, which change
initiators do not account for.
Executive Briefing Series �In Conversation with�� Presented by Robertson Executive Search Contact: [email protected] [email protected] L10/ 155 George Street, Sydney AUSTRALIA 2000
It would appear that there are more complex business planning
systems in Australia compared to other geographies, as we �play
high and low�. We are more diversified and also more regulated.
Australian demographics mean that we often have to outsource
or import talent, which in itself modifies how organisations
approach change. We are a multicultural workforce and this
reflects in how we approach change.
A case in point, as asserted by the group, was that there have to
be more women in IT and especially in leadership roles. He
commented that he believed that women add an extra dimension
in stakeholder and people management in large scale
transformation projects. The Australian experience in that there
are many women in change communications but not enough
being nurtured by functions like Finance and IT, to make a
significant difference. Change encompasses the organisation,
but it is often the Finance and IT functions that form the basis of
internal operational excellence. The female diversity aspect in
these areas needs to be improved.
Bob concluded that success depended on managing these risk
factors and successfully accounting for the �Australian� factor.
Conclusion
The CIO and their teams need to become a driver of business
rather than a cost centre.
Executive Briefing Series �In Conversation with�� Presented by Robertson Executive Search Contact: [email protected] [email protected] L10/ 155 George Street, Sydney AUSTRALIA 2000
There was significant consensus that transformation programs
work best when there is the �smell of death� hovering over the
organisation � change or die.
The people who design transformation roadmaps are too smart
ie: �it doesn�t matter what I know, it is what can I get my
organisation to behave like it knows�, that counts. Change
management isn�t just what you do after you�ve planned out your
transformation ... it needs to be built into the thinking as an input
or even a constraint to the aspiration.
Underlining this was the realisation that change from ground up
is key if organisations are to streamline for efficiency and deliver
value.
Executive Briefing Series �In Conversation with�� Presented by Robertson Executive Search Contact: [email protected] [email protected] L10/ 155 George Street, Sydney AUSTRALIA 2000
Attendees
Company Attendee Title
APN Tim Catley CIO
BearingPoint Bill Katsaros Partner
BearingPoint Bob Hennessy CEO
DHS Steve Sloan Director
Macquarie David Reeve CIO
Deloitte David Spreadbury Director
Consultant Frank Ruscio Consultant
TNT Express Gary Smith ICS Director Asia Pacific
GrainCorp Glenn Mason CIO
Associate Partner
Karsten Hansen Associate
Partner
Paul Rush Partner
Robertson Executive Search
Peter Goddard Managing Partner