Peter Drucker

1. The supervisory level in your business is like a Sergeant Major.

An Army depends on its Sergeant Majors and they determine its success in battle.  Similarly, your business depends on your “Sergeant Majors”, your supervisors.  They “run” your business and determine its success.

2. Do your change programs treat Supervisors with the respect they deserve?

Do you bypass them and interact directly with “their troops”.  Or do you first win them over to supporting the change initiative and then let them win over and prepare their teams?  Using the way they always manage their teams: mutual trust.  Who do their troops trust more: Senior Executives or their Sergeant Major during times of uncertainty?

3. Do You communicate directly with your Supervisors?

Or do the change messages get filtered by middle management?  How many layers do the change messages need to pass through before they reach the critical front line workers?

Activation

1. Assess each change initiative.  Do your supervisors have a central role in the shaping of the change  solution and in the preparation of the workforce for the change?
2. Sketch out the channel Do you and the change team deal directly with your supervisors?  Line managers should support the communications but not own it.
3. Review the communications messages sent to date.  Are the messages about the change relevant to each worker at a personal, micro level?  Do they answer the critical WIIFM – what’s in it for me? Or are they generic, corporate gibberish that alienate your work force?

Resources

“Communicating Change” by TJ Larkin
“Leading Change” by John Kotter
“Our Iceberg is Melting” by John Kotter

Bill Gates

We’re entering a new world in which data may be more important than software.

Tim O’Reilly

That is the question.  The cost of a business process can increase dramatically if the right IT enabling tools are not used.  Enterprise Resource Planning (ERP) software, perhaps the most complex of all business software, is designed specifically to support business processes.  It is rare that an ERP will support the business processes exactly as required in its vanilla form and so tradeoffs must be assessed against the broader strategic context of the business.  For example:

Single Platform vs Best of Breed:  Integrating best of breed, third-party software into a ERP, introduces new challenges: interface management, multiple sources of the “truth,” increased support costs etc.

Vanilla vs Customised:  Should your company build part or all of its software?  If the software is not a strategic differentiator then you may consider changing your processes to suit a software application as is out of the box.  This diverts implementation costs from software customisation to change management.

These are just some of the strategic questions which must be answered by the Executive Team as a whole and not left to the CIO alone.

W. Edwards Deming

McDonalds is less known for its food than for the consistency of its delivery.  It is the same anywhere in the world.  The Big Mac Index is now a valid measure used by economists globally.  McDonalds executives can sleep at night because they have a system that manages itself, the same way every day.

Any business can be McDonaldised: bottler, aircraft maintenance, law firm, call centres, warehousing, medical, government, recruitment, insurance claims, crane sales and ice cream trucks.
Good processes reduce the reliance on people.  If your people are having a bad day, goods still need to get delivered on time.  If they are sick, costs must continue to be managed. If they are tired, quality must remain high.
Processes shift intellectual property from people to business rules.  Which one is more consistent?  The business is impacted less by the loss of key staff.  Induction of new staff is faster.
Know the key principles of process redesign.  Effective process design involves the ongoing balancing of design constraints against the needs of the organization.

Your most unhappy customers are your greatest source of learning.

Bill Gates

When is the last time you asked your customers “do you find it easy to do business with us?”  Have you ever “spent a day in the life of your customer?”  What really drives their buying behaviours and what is the total cost to them of buying from you?  What surprises would you find and how would you turn these into opportunities?

Really Talking to Our Customers Can Surprise Us

Total Cost of Doing Business With You: Do your customers really care about your latest discount initiative when what they really want is on–time delivery because the current, late deliveries are costing them more than the value of your discount?

Returns are the Voice of the Customer:  Is the level of returns too high? Is this because of poor quality? Or poor design that does not meet their needs?

Turn Complaints Into Compliments: Do your organisation systematically capture the customers’ complaints, analyse the root causes, resolve them and measure the outcomes?

Add Value or Perish: What problem are you solving for your customers? What is the relative value of your solution compared to that of others within the value chain?

Returning Customers: Do you measure your customer churn and take actions to reduce it?  Are your staff remunerated to keep current customers?

Customers’ Touchpoints With Your Organisation? Is a single person accountable for resolving a customer issue? Or do your customers get bounced between the silos?

Since it costs five times more to obtain a new customer than to keep one, it makes sense to invest in and automate customer service through better processes.  Customers like certainty and ease of dealing with you.  Intimate knowledge of the customer is the beginning of all good process design.  Make it happen.

Activation

How often do you, as a senior executive, talk to your customers?  Call your 10 top customers now and set up a meeting with them.

Consider asking your customers to work within their organisation for a day and learn what it is like dealing with your organisation.

Do you measure customer satisfaction on a regular basis?  What do you do with the information?

Resources

• Customer Centred Org??

However beautiful the strategy, you should occasionally look at the results.

Winston Churchill

Your Operating Strategy must drive the four key elements of Business Transformation: Customers, Process, People and Technology.  Keeping these in balance improves the delivery of dollar benefits.

Whatever your Operating Strategy may be, any attempt to change the status quo must first start with a clear understanding of what the customer wants and how they want it.  Business processes must deliver exactly what the customer wants.  Engaging people throughout a change initiative gives them ownership of the solution.  Technology enables the automation of processes and business rules.

So what is your Operating Strategy?

Do you need to stabilise your operations for an expansion into, say, Asia?

Do your current operations provide the platform into which to integrate an acquisition?

Do your customers find it difficult to do business with you?

Perhaps your customers are not receiving the quality of product or service that they expect?  Is delivery timely?

Are you looking to reduce total operating costs?

Are you looking to improve the flexibility or scope of your products without increasing the overall cost and so offer more to your customers (hence increase revenue and margins)

Activation

Do your current business transformation initiatives contribute to achieving the objectives of your strategy?

Assess how each of your business transformation initiatives utilises each of the four elements: customer, process, people and technology.  Are one or more of these elements not considered sufficiently?

What gaps remain in your Operating Strategy after all your current initiatives have been considered?

Resources

“Strategy Maps”, Robert Kaplan and David Norton, Harvard Business School Press, 2004

“Welch, an American Icon”, Janet Lowe, John Wiley and Sons, 2001

“The Customer Driven Company”, Richard Whiteley, The

Patrick Hagerty, Founder, Texas Instruments

CEOs initiate Business Transformation projects with all the right intentions.  Perhaps the cost structure is too high, the customer finds it difficult to deal with us or we need to standardise our operations for upcoming mergers.  Whatever the reason, business transformation is now acknowledged to be a strategic tool within the CEO’s arsenal.

So why does study after study show that between 60% and 80% of transformations either fail to deliver their objectives or simply fail outright and are cancelled?  Why do extremely complex projects, such as landing a man on the moon or building the Sydney Harbour Tunnel, succeed while the transformation of a company of 500, 1,000 or 2,000 employs fails?  Reasons can include:

Culture. The transformation is at odds with the organisation’s values, norms and behaviours and threatens the status quo.  Resistance to change may be overt or covert.

Lack of Process-Centric Approach. An organisation’s business processes define what it does and delivers.  The McDonaldisation of the enterprise gives certainty that the customer is receiving the right product or service.

Lack of Buy-In From Key Stakeholders. WIIFM – What’s In It For Me?  The needs of the stakeholders must be addressed.  The critical, supervisor level is often insufficiently engaged.

Technology-Led. Technology is a tool, as are a hammer and a forklift.  Tools alone do not improve the bottom line or customer service.  They enable business processes that do.

Insufficient Funding. A lack of rigour in the business case may underestimate the true cost of the transformation.  Underfunded transformations usually cut critical, people change management activities in the latter part of the project.

Activation

How do your current initiatives stack up against these criteria?

Can you picture in your head clearly what your organisation will look like when the transformation is finished?

Review the assumptions in the business case.  Are they realistic?

Resources

“Leading Change”, John P. Kotter, Harvard Business School Press

“Leading the Revolution”, Gary Hamel, Plume

“The Process Edge”, Peter Keen, Harvard Business School Press