Beyond Performance

Summary

Chapter 6: Act How do we manage the Journey?

By Group 5

How to Manage the Transformation Journey?

By Managing Energy in the Organization and implementing
changes through Initiatives
Analogy: Change the wheels of a bike while riding it)
Structure the Change
Energy

Distribute Ownership
Evaluate Outcomes

Initiatives

Prototype

Scale Up

Energy: How to Generate and manage it

Use Change Engine Model to generate and manage energy
1. Give the transformation a headline
2. Generate themes
3. Layout specific initiatives

Structure the Change

Elements of Change Engine

Distribute Ownership

1. Assign Formal Accountabilities

2. Encourage Self-directed/Viral

Evaluate Outcomes
1.
2.
3.
4.

Track progress of Initiatives

Monitor Health Improvements
Measure Performance
Monitor Enterprise Value generated

Initiatives: How to implement a change?

Implement an initiative in a 3 phased approach: Test, Learn
and Scale Up

1. Test

2. Learn

Build Prototype to Test & Learn

(Double Pilot)

1. Proof of Concept
(Will it work at all?)
2. Proof of Feasibility
(Will it work at Scale?)

3. Scale Up
3 Ways to Scale Up
1. Linear
2. Geometric
3. Big Bang
Needed for improving Org. Health

Leverage
1. Pivotal individuals
2. Critical Interactions

Question: How much can external firms

help you in your transformation journey?
At what stage of your transformation journey
should you involve external Consulting firms?
How deep should their involvement be?

Appendix

Example Case Study

CASE: How to implement a transformation initiative?

Example of Telefonica de Espana:
Problem: Companys EBIDTA shrunk by 10%; Cashflow down by 15%;
Changing market conditions; Low employee morale

Solution: Julio Linares instituted change focusing on Energy

Structure

Headlines:

Transform company into profits

Themes:

Growth, Competitiveness and

Commitment

Initiatives:

Lean Process, Online transactions,

Customer segmentation

Ownership

Initiatives Owned by Line Management

with support from PMO.
Relevant people given opportunity to
participate.

Evaluate

Monitored and Reviewed progress for

continuous improvement

Result: Overall health improved. ROIC doubled, Cashflow and EBITDA

improved (tripled).

Case Study: Philips

Transformation headline (From Jeroen Tas):

Transform

Themes:
Cost

Philips into a leaner, profitable organization

Cutting

Specific Initiatives
Consolidate

IT Systems

How To?
CVP

Proof

of Concept
Proof of Feasibility - Missing

Linear/Geometric (high decentralization, resistance

to change, degree of customization)