Professional Documents
Culture Documents
SERIOUS CHANGE
2019©
ANTICIPATING THE NEED FOR SERIOUS CHANGE
WHAT DO THE FOLLOWING STATISTICS TELL YOU?
• From Fortune's 'most admired companies' list in 1983, not a single company made it to
the 1993 list.
The message for executive leaders should be clear:
2
ORGANISATIONAL GROWT H AND DECLINE
PHASE 1: ENTREPRENEURIAL
Product, process or service invention
Creation of a replicable pattern to exploit the potential that ensures:
o Reliability of product, process or service
o Profitable manufacture/provision
o Distribution to customers
Clear vision
Few people, high energy, high commitment
Natural team-working
Inventive, risk taking, learning from experience
Little formality, flexibility, adaptability
Quick, visible return on effort
LATE PHASE II: THE POISONED INHERITANCE AND THE EMERGENCE OF THE CONDITIONS
FOR FAILURE
Poisoned inheritance: A failure to realise that today's success is a product of
yesterday's actions
Previously 'excellent' practices become uncompetitive in a changing environment
Failure to look closely at, or learn from, mistakes
Errors creep in and go undetected
Technological arrogance
Inward focus
Procedures driven bureaucracy
Risk averse attitudes start to prevail
Nepotism and political paternalism
Empire building
3
SECOND CRISIS: END OF PHASE II
“Most organisations have their face to the Chief Executive,
and their arse to the customer”
Jack Welch
C.E.O., General Electric
End of value creating growth
Increasing competition
Market beginning to shift
Losing touch with customers
Confusion
Declining morale
Hits particularly hard on people with Phase I history
4
THREE STRATEGIES1
TO REGAIN COMPETITIVENESS
1
Adapted from G. Hamel & C. K. Prahalad
5
n Back to basics push
- Process re-engineering
- Total quality management
6
“Success is a lousy teacher. It seduces smart people into thinking they can't
lose, and it is an unreliable guide to the future”
Bill Gates
C.E.O. Microsoft
“One of the hardest things is to get the maximum out of a rising business.
The worst sins are committed in boom times, when everybody feels satisfied.
That's when managers get fat and arrogant”
Jack Welch
C.E.O. General Electric
So the question is what can the executive leader learn from this? How can they anticipate
the need for change and avoid the corporate decline and demise/liquidation?
To anticipate the need for change successful leaders focus inward to look for the signs of
complacency:
― An uncompetitive cost structure
― A bloated bureaucracy
― Procedures driven
― Too much reporting and control
― A failure to look closely at mistakes
― Silo thinking, political fiefdoms
― Non-performance based people management systems
― A culture of political paternalism
― Technological arrogance
7
“I have often thought that if Microsoft were a car, we'd have a very large
gas pedal and a very small brake. There'd be a very large windscreen at the
front, to see where we're going, but no rear-view mirror - we know the
competition is right on our tail, so we don't need to look back “
Mike Murray, Microsoft
They continually look for evidence of possible Strategic Inflection Points; the point when
the technology or the market is beginning to move into a 10x change.
The problem here is to distinguish the signal (of a 10x change) from the noise (i.e.
other insignificant, inconsequential events). This means having 'Big Ears for Small
Signals'. Andy Groves suggests the following techniques to anticipate change2 :
― Continually apply the silver bullet test to your competitors. If you had only one
bullet to take out your main competitor, continue to ask who it would be. Are
there signs it is changing?
― Look for changes in your key complementors. The other businesses from whom
your customers buy complementary products. So your product may work better or
not work at all without their product e.g. computers need software and software
needs computers
― Are people around you who previously had 'It', beginning to lose 'It', i.e. previously
competent people or businesses may be losing 'It' because 'It' is beginning to
change?
― Make sure that you listen to the Cassandras
2
Source: A. Groves – Only The Paranoid Survive
8
HOW PEOPLE REACT TO CHANGE AND
HOW TO HANDLE THEIR REACTION
When people appear to be resisting change it would be truer to say that they are actually
resisting loss and transition. Thus, the effective leader will realise that the first step in
managing resistance is for them to understand the nature of transitions and how to
manage them.
William Bridges in his book ‘Managing Transitions’ identifies three overlapping, but
distinguishable phrases in the process of transition:
― Endings
― The neutral zone
― New beginnings
The executive leader needs to be able to recognise these psychological responses (in
themselves as well as others), the predictable behavioural indicators and how to
manage these transitions
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Endings#
Sorrow,#pain,#feelings#of#loss#
Sabotage,#acCve#resistance#
Avoidance,#denial#
#
Look&for&what&people&have&
to&give&up& Neutral#Zone#
Jungle,##
Moaning#and#groaning#
Confront#with#the#brutal#facts#
Old#comfort#disapears#
The#new#structure#is#not#yet#in#place#
Temporary#ways#of#working#rule#
Beginnings#
Enthusiasm,#it#starts#to#work#
#
People#feel#the#spirit#
Enjoy&first&li-le&successes&
Acceptance#and#growth#
Create&temporary&ways&of&working&
#
Emphasize&behavior&
Envision&the&future&
Celebrate&first&successes&
75# &
10
3 Emo$ons'during'change'paradox:'the'leaders'of'the'change'are'beginning,'their'
followers'are'for'at'least'60%'in'the'Endings'and'Neutral'zone'phases.'
CHANGE'AHEAD'
Gra3tude'
Learn'and'grow'
Denial'
Renewal'and'forgiveness'
Protest' new'a=achment'
Anger'
Ready'to'go,'to'bond'
Sadness' Fully'understanding'
and'Missing'
Acceptance'
See'the'posi3f'side'
Fear'–'Terror'–'Panic''
Probing';'Tes3ng'
Ra3onalisa3on'
(some3mes'Depression)'
3
Adapted from Noel Tichy, the leadership engine, 2001
11
CHECKLISTS
SOURCE:
WILLIAM BRIDGES
MANAGING TRANSITION
ADDISON-WESLEY, 1991,1997, 2003
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MANAGING ENDINGS: A CHECKLIST
YES NO
____ ____ Have I studied the change carefully and identified who is likely to lose
what–including what I myself am likely to lose?
____ ____ Do I understand the subjective realities of these losses to the people who
experience them, even when they seem like overreaction to me?
____ ____ Have I permitted people to grieve and publicly expressed my own sense of
loss?
____ ____ Have I found ways to compensate people for their losses?
____ ____ Am I giving people accurate information and doing it again and again?
____ ____ Have I defined clearly what is over and what isn't?
____ ____ Am I being careful not to denigrate the past but, when possible, to find
ways to honour it?
____ ____ Have I made a plan for giving people a piece of the past to take with them?
____ ____ Have I made it clear how the ending we are making is necessary to protect
the continuity of the organisations or conditions on which the organisation
depends?
____ ____ Is the ending we are making big enough to get the job done in one step?
FINAL QUESTIONS
What actions can you take to help people deal more successfully with the endings that are
taking place in your organisations? What can you do today to get started on this aspect of
transition management? (Write yourself a memo below.)
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MANAGING THE NEUTRAL ZONE: A CHECKLIST
YES NO
____ ____ Have I done my best to normalise the neutral zone by explaining it as an
uncomfortable time which, with careful attention, can be turned to
everyone's advantage?
____ ____ Have I redefined it by choosing a new and more affirmative metaphor with
which to describe it?
____ ____ Have I reinforced that metaphor with training programs, policy changes,
and financial rewards for people to keep doing their jobs during the
neutral zone?
____ ____ Have I created the temporary policies and procedures that we need to get
us through the neutral zone?
____ ____ Have I created the temporary roles, reporting relationships, and
organisation Al groupings that we need to get us through the neutral
zone?
____ ____ Have I found what special training programs we need to deal successfully
with the neutral zone?
____ ____ Have I found ways to keep people feeling that they still belong to the
organisations and are valued by our part of it? And have I taken care that
perks and other forms of “privilege” are not undermining the solidarity of
the group?
____ ____ Have I set up a transition monitoring team to keep realistic feedback
flowing upward during the time in the neutral zone?
____ ____ Are my people willing to experiment and take risks in intelligently
conceived ventures–or are we punishing all failures?
____ ____ Have I stepped back and taken stock of how things are being done in my
part of the organisations? (This is worth doing both for its own sake and as
a visible model for others' similar behaviour.)
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____ ____ Have I provided others with opportunities to do the same thing? Have I
provided them with the resources–facilitators, survey instruments, and so
on–that will help them do that?
____ ____ Have I seen to it that people build their skills in creative thinking and
innovation?
____ ____ Have I encouraged experiment and seen to it that people are not punished
for failing in intelligent efforts that did not pan out?
____ ____ Have I worked to transform the losses of our organisations into
opportunities to try doing things a new way?
____ ____ Am I regularly checking to see that I am not pushing for certainty and
closure where it would be more conducive to creativity to live a little
longer with uncertainty and questions?
____ ____ Am I using my time in the neutral zone as an opportunity to replace bucket
brigades with integrated systems throughout the organisations?
FINAL QUESTIONS
What actions can you take to help people deal more successfully with the neutral zone in
which your organisations currently finds itself? What can you do today to get started on
this aspect of transition management? (Write yourself a memo below.)
15
MANAGING THE NEW BEGINNING: A CHECKLIST
YES NO
____ ____ Do I accept the fact that people are going to be ambivalent toward the
beginning I am trying to bring about?
____ ____ Have I taken care of the ending(s) and the neutral zone, or am I trying to
make a beginning happen before it possibly can?
____ ____ Have I clarified and communicated the purpose of (the idea behind) the
change?
____ ____ Have I created an effective picture of the change and found ways to
communicate it effectively?
____ ____ Have I created a plan for bringing people through the three phases of
transition–and distinguished it in my own mind from the change
management plan?
____ ____ Have I helped people to discover as soon as possible the part that they will
play in the new system–or how the new system will affect the part they
play within the organisations?
____ ____ Have I ensured that everyone has a part to play in the transition
management process and that they understand that part?
____ ____ Have I checked to see that policies, procedures, and priorities are
consistent with the new beginning I am trying to make so that
inconsistencies aren't sending a mixed message?
____ ____ Have I found ways, financial and non-financial, to reward people for
becoming the new people I am calling upon them to become?
____ ____ Have I built into my plans some occasions for quick success to help people
rebuild their self-confidence and to build the image of the transition as
successful?
____ ____ Have I found ways to celebrate the new beginning and the conclusion of
the time of transition?
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____ ____ Have I found ways to symbolise the new identity–organisational and
personal–that is emerging from this period of transition?
____ ____ Have I given people a piece of the transition to keep as a reminder of the
difficult and rewarding journey we all took together?
FINAL QUESTIONS
What actions could you take to help people deal more successfully with the new
beginnings they must make if your change effort is to succeed? What could you do today
to get started on this aspect of transition management? (Write yourself a memo below.)
17
MANAGING IN A WORLD OF NON-STOP CHANGE:
A CHECKLIST
YES NO
____ ____ Have I accepted the fact that non-stop change is the unavoidable reality
today, or am I still fighting it?
____ ____ Do I have an overall design in which this particular transition makes sense?
____ ____ If I do not have such a design, am I working to create one for myself and
my people by "connecting the dots" or identifying the "end of a chapter"?
____ ____ Am I being careful not to introduce extra, unrelated changes while my
people are still struggling to respond to big transitions?
____ ____ Am I watching out that I don't stake too much on a forecasted future?
____ ____ Am I making (and asking others to make) life-cycle projections to identify
and start creating replacements for policies, systems, and structures that
have passed their mid-life points?
____ ____ Am I planning and managing the transition from "occasional change" to
"change as the norm" and encouraging others to do the same?
____ ____ Do I honestly think of the status quo as a temporary and expedient resting
place in a time of constant change?
____ ____ Do I talk of change as the best way to preserve the essential continuity of
the organisations?
____ ____ Have I clarified the mission of my organisations and helped others under
me to do the same for their level of the organisations?
____ ____ Do I have a deep feeling for this mission, or am I merely mouthing words?
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____ ____ 2. Listening to people carefully and letting them know what I hear them
saying?
____ ____ 3. Understanding what matters to people and working hard to protect
whatever is related to that?
____ ____ 4. Sharing myself honestly (without letting honesty be a cover for
hostility)?
____ ____ 5. Asking for feedback and acknowledging unasked-for feedback on the
subject of my own trustworthiness?
____ ____ 6. Remembering not to push others to trust me further than I trust them?
____ ____ Have I worked hard to unpack old baggage, heal old wounds, and finish
unfinished business?
____ ____ Do I respond to these challenges creatively and help others to do the
same–or do we get caught up in competitiveness for a piece of a shrinking
pie?
FINAL QUESTIONS
What actions could you take to help people deal more successfully with the non-stop
change in which your organisations currently finds itself? What could you do today to get
started on this task? (Write yourself a memo below.)
19
TAKING CARE OF YOURSELF: A CHECKLIST
YES NO
____ ____ Have I determined how my situation and my future have been changed by
the recent, the current, or the planned organisational changes? What
exactly is going to be different for me?
____ ____ What part of myself am I losing or am I likely to lose in the transition that
is triggered by my change? Something that has been important to me is
ending. What is it? What is it time for me to let go of?
____ ____ What losses in my life outside of work may be amplifying the feelings I'm
getting from the endings that are taking place on the job?
____ ____ Can I identify signs of mourning in myself? If so, do I accept them as
natural, or am I trying to get over it and move on quickly?
____ ____ Have I tried to separate my reaction to the present from the resonance it
may be setting off within me? And if the resonance is strong, have I sought
professional counselling?
____ ____ Have I stopped and reflected on the continuities in my life (including those
I've temporarily lost touch with) and done whatever I need to do to
strengthen them?
____ ____ Have I made the necessary temporary arrangements and agreements to give
myself a temporary time-out from decisions and responsibilities that can
wait?
____ ____ Have I found quiet times and stable places to give myself a respite from
the chaos I so often feel around and within me these days?
____ ____ Have I set short-range objectives for myself to restore a sense of
movement and achievement during this time?
____ ____ Have I taken the time to take stock of where I stand in my life now, both in
relation to the goals I have set myself in the past and in terms of my own
present dreams and needs, which might make other goals more rewarding
to me?
____ ____ Am I actively trying to see myself with new eyes, especially in terms of
what I desire, my abilities, my resources, and my basic temperament?
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(Remember DART.)
____ ____ Am I pushing myself to break out of my old ways of seeing my life and the
options I have today?
____ ____ Am I asking why? and why not? when I look at how my life is at the
moment? (And am I not accepting the ordinary, common sense answers to
those questions?)
____ ____ Am I letting myself play with outrageous possibilities, viewing them as
paths that may lead to something workable in the long run?
____ ____ Am I thinking of analogies and metaphors for my situation ("It's like a . . .)
and then trying to change them and come up with new ones?
____ ____ Have I pushed myself (preferably with others' help) to write down 15 or 20
different things I could do in my present situation?
____ ____ Have I designed a learning venture for myself, a way to acquire the
knowledge and skills I need to deal successfully with my new
opportunities?
____ ____ Do I have a "project plan" (as well-thought-out as I'd make for a work
project) for what I'm going to do with my life and career at this point?
____ ____ Have I taken into account transitions that are likely to occur as I pursue
that plan, and have I taken steps to manage them?
Finally, am I remembering the only four rules of living that I'm likely ever to need?
____ ____ Am I showing up?
FINAL QUESTIONS
What actions could you take to help yourself deal more successfully with the personal and
organisational transitions in which you currently find yourself? What could you do today
to get started on this task? (Write yourself a memo below.)
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CAUSES OF RESISTANCE TO CHANGE
22
TWO TOOLS FOR
HANDLING RESISTANCE TO CHANGE
Allies
o Use as disciples
Adversaries
o Win over
o Distract or fragment
o Relocate (put out to grass), neutralise
o Take out of play
Supporters
o Use allies to build coalitions and network with supporters
Fence-sitters
o Use allies and supporters to convert and bring on board
Blockers
o Leave alone
o Relocate (put out to grass), neutralise
o Take out of play
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FORCE FIELD MAP
A force field map helps us to realise that the more we push or drive, the more we
increase the resisting forces. We do better by analysing the resisting forces; What are
they? Why are they there? How strong are they
24
In the example, there is a need to increase the quality of service. The current level of
service is kept in quasi-equilibrium by a field of forces, some driving towards change,
some resisting it.
The strength of the respective forces is indicated by the length of the arrowed lines.
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HOW TO CREATE THE CONDITIONS FOR
SERIOUS CHANGE
People don't change unless they have to.
Bad situations or opportunities create the objective conditions that drive the need for
change.
Just because the need is real doesn't mean it is seen as such. This is a subjective issue.
Hearts and minds need to be won over, the need for change needs to be felt. Pain,
anxiety or restless discontent fuels the felt need for change.
Thus, the need must exist in reality, or be a reasonably predictable outcome of
current trends and be felt by people.
26
WHY DO SERIOUS CHANGE EFFORTS FAIL
• Not aligning structure, systems & processes and culture to the vision
• No focus on the critical few, high probability of success actions that will
make the real difference (the value drivers)
27
CHANGE: BASIC INGREDIENTS FOR SUCCESS
ü Part to Play: Clarity on the roles people will have in the new
world and what is in it for them (WIFT)
ü Speed: act quickly and decisively. Take the most critical actions
within one hundred days
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HOW TO LEAD SERIOUS CHANGE EFFORTS
CREATE A VISION
Ø Create a vision - a powerful picture of what you are trying to achieve, of what you
want to become - to direct the change effort
Ø Develop broad strategies for achieving that vision - for turning it into reality
Ø Describe the new behaviours that you wish to see in the organisation. These will spell
out what the values look like when they are 'lived'
COMMUNICATE
Communicate the vision
Use every possible way to tell everyone what the new vision is, why it is necessary and
what is needed to get there. Ways to do this include:
keep it simple... cut the jargon
use examples, metaphors... paint a verbal picture
multiple forums... spread the word
repetition... ideas then start to sink in
allow people to challenge... two way is stronger than one way
explain apparent inconsistencies... or they undermine the credibility of other
communication
lead by example... important people behaving in ways consistent with the vision
overwhelm all other communication
Communicate directly to each stakeholder group:
Identify specific stakeholder concerns (e.g. distributors, dealers, customers, staff,
suppliers etc.)
Prepare specific communication messages directed at each one to address those
concerns and spell out clearly how the change will impact them, what's changing and
what isn't
Anticipate rude questions,
develop consistent answers
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CREATE A SENSE OF URGENCY
• People don't change unless they have to
• Sell the problem/opportunity, not just the solution (vision)
• Raise the urgency level and create a 'we can do this' spirit. To do this, use tactics like:
• confront people with competitive market realities
• identify and discuss crises, potential crises and big opportunities.
• bombard people with information on opportunities
• provide more financial and customer satisfaction data to more people
• ensure that more people talk more often to unhappy customers, suppliers and
shareholders
• instil relevant facts and honest talk into everything and get rid of senior management
"happy talk" (i.e. unfounded optimism)
• eliminate the obvious examples of excess
• set stretch goals
• stop measuring performance based on narrow functional goals; measure
accountability for broader business goals
• create crises, allow errors to blow up, expose managers to major weaknesses
compared with competitors
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AUDIT STRUCTURE, PROCESSES, SYSTEMS FOR ALIGNMENT WITH THE VISION
• Evaluate structure, systems and processes for alignment with the vision. If
inconsistent, replace or re-design so that they facilitate rather than block achievement
of the vision
• Empower people to take the action that will achieve the vision by
• getting rid of obstacles: things that block the achievement of the vision (such as
supervisors or senior managers who block needed change)
• providing employees with appropriate support (such as training)
• Encourage risk-taking and non-traditional ideas and actions
• How structure can undermine the vision
31
ACHIEVE QUICK WINS FOCUSED ON THE VALUE DRIVERS
• In post M&A and turnaround situations one of the early quick wins will inevitably be
designing a new organisation and staffing up. Speed is of the essence here; the
quicker this is done the better (within 30 days). This is necessary to prevent confusion,
apprehension and falling morale as well as the 'barnyard behaviour' so typical of a
post M&A situation. We should also strive to avoid putting 'turtles on fenceposts' by
using objective criteria to put the best person in the right post regardless of other,
political factors
32
THE EFFECT OF QUICK WINS ON THE SUCCESS OF CHANGE EFFORTS
33
MAINTAIN THE MOMENTUM - BUILD ON THE QUICK WINS
Use the increased credibility of early successes to change the remaining
more difficult systems, structures and policies that still do not fit in with
the vision.
Keep the momentum going with new projects and new catalysts for
change.
34
THE SEVEN DEADLY SINS IN IMPLEMENTING
MERGERS, ACQUISITIONS AND MAJOR CHANGE
AND HOW TO AVOID THEM
THE SOLUTION
Use Value Driver Analysis. A process that gets the executive group to convince
themselves (at the same time and using the same information) which actions are the
ones that will capture shareholder value quickly.
This is how it works
STEP 1: GET ALL THE KEY EXECUTIVES AND MANAGERS TO LOAD UP WITH INFORMATION AND DECIDE: -
― What actions within your own areas of responsibility and control should be taken
to increase revenue, decrease cost or otherwise capture the value of the change.
The actions identified might relate to revenue, operating cost, cost of goods sold,
fixed capital investments, working capital investment, cost of capital and /or
effective tax rate
― For each action identified, what is your estimate of the quantitative impact (on
revenue operating expense, cost of goods sold etc.), the time frame and the
assumptions underlying your estimate of impact (e.g. units sold through the new
channel, volume savings on purchases, capital expenditures or onetime costs
required)? Use these assumptions to calculate a simple measure of shareholder
value for each action (such as free cash flow).
35
― The probability of success of each action. Assess this by identifying: -
― Use the data captured in the value driver interviews to convert estimates and
assumptions into a simple measure of share holder value (e.g. free cash flow) and
rank each value-driving action based upon its financial impact and probability of
success
― Conduct a value driver working session. The purpose is to build among the senior
executive team commitment and consensus on the key post-transition actions and
the relative impact they are likely to have upon value creation. This is critical.
― This purpose is accomplished by enabling the executive team to candidly explore
alternative views of the value drivers, the use of financial data and probability of
success data allows the executive team to objectively and constructively evaluate
and rate the value drivers, test assumptions, validate ideas and build consensus on
the 20% of actions that will drive 80% of the value, with the greatest probability of
success
36
SIN 2 : CONTENT-FREE COMMUNICATION
THE CHALLENGE:
Most communication in a major transition is 99% content free.
These communications:
― are more about making pronouncements than connecting with people
― emphasise style over substance
― confuse talking with communicating
― fail to connect with the real information needs of employees, customers,
suppliers,
― investors and other stakeholders
― So how do we avoid these mistakes? How do we: -
― secure stakeholder understanding and acceptance
― build support for the change
― minimise the crippling effect of uncertainty on performance
― keep people focused and energised rather than confused and perplexed
THE SOLUTION
Effective transition communication is based on these principles: -
SILENCE IS NOT AN OPTION, EVEN IF YOU DON'T HAVE ALL OF THE ANSWERS
In the absence of real information people fill in the blanks with their own information.
Minor events are given great meaning. Simple mistakes become sinister plots.
Unrelated events become causal links. Fuelled by fear, uncertainty and doubt, the
answers they create are invariably worse than the reality that faces them.
YOU MUST KNOW WHAT EACH GROUP OF STAKEHOLDERS IS MOST CONCERNED
ABOUT
― Employees will be concerned about job security, income, personal influence,
power and career opportunities
― Customers will be concerned about changes in price, quality, responsiveness,
timely delivery, credit policies and alterative sources of supply .
― Suppliers will be concerned about having to resubmit competitive bids, changes in
policy on payables, new purchasing agreements and changes in ordering practices,
volume and delivery demands
― Shareholders and financial analysts will be concerned about the validity of
management reasons for doing the deal and whether there will be a return on
investment quickly enough
― Local authorities/communities will be concerned with the impact on the local
economy and tax receipts
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To discover their real needs you must conduct a Stakeholder Analysis. First: identify all
stakeholder groups across all locations. Make sure that customers are at the top. Second:
gather data quickly from as many stakeholder segments as resources permit, using
interviews, focus groups and surveys should be done as soon as possible after the
announcement (and repeated after 2 months with the employee groups if momentum
has been lost). Ask your stakeholders the following:
• What is your understanding of the reason for the deal/change?
• Do you see value for yourself in the deal/change?
• Have you been told how the change affects you and other stakeholders?
• What are your perceptions of the other company?
• What have you heard from other customers, suppliers, business partners?
• What are your concerns?
• What would spark your enthusiasm?
• What challenges do you see ahead?
The guiding principle should be : identify their Early Urgent Concerns (E.U.C.$) fast and
eliminate them fast (or lose support fast).
You must have an integrated information strategy that addresses stakeholder's
concerns and answers their questions; builds on their hopes, speaks to them through
channels that they trust, in terms that they can understand and does so soon.
This is a campaign to win hearts and minds. Flood the communications channels with
targeted messages. Repeat those messages again and again to drive home the meaning and
minimise misinterpretations. The objective is clarity, quantity and customisation - every
group needs to feel that the message is directed at them.
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― STEP THREE: each issue and audience will intersect at a cell. Craft a short simple
position statement for each cell (twenty five words or less) that summarises the
company's position on the issue relative to that audience. If you don't have
positions worked out yet, start with what you know. If an issue is irrelevant for a
particular audience, cross that cell out.
― STEP FOUR: The third dimension of the matrix is communication channels - memos,
face-to-face meetings, small group sessions, press releases, town-hall meetings etc.
The more channels that you use to repeat the message the better.
― STEP FIVE: To enlist the support of middle management, use the communication
matrix to coach and counsel them on stakeholder concerns. Help them to develop
a list of the rude, difficult questions they are likely to face from different groups
and prepare answers. Rude questions and answers helps to prepare them for the
worst, builds their confidence and will make them feel like insiders.
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SIN 3 : CREATING A PLANNING CIRCUS
THE CHALLENGE:
In order to avoid breakdowns in execution managers put a lot of effort into planning
the transition. Most companies tend to gravitate towards one of two planning
extremes:
― They form too many transition teams to co-ordinate decisions. This slows progress
and dilutes accountability, creating a planning nightmare
― They avoid anything resembling a participative process and end up creating a
small "members only" club
How do we avoid this?
THE SOLUTION
The purpose of the transition team is to make rapid progress on things that create
real economic value, really fast. Their purpose is not to complete the hundreds of tasks
that surface as part of a major transition
Common mistakes and how to avoid them
MISTAKE 1: Most companies create too many teams representing every function,
business unit and geographical region including cross-functional teams for key
products, services and system integration.
PRESCRIPTION: Group the value drivers into categories to determine how many teams
you realistically need (there should be fewer teams than value drivers). Create detailed
action plans to produce focus and fast pace.
MISTAKE 2: Most companies put too many people on each transition team. Too many
people leads to difficulties in scheduling meetings and slowness in reaching decisions,
with the result that nothing much gets done
PRESCRIPTION: Keep transition teams small, from 3 to 5 people. This facilitates easier
scheduling of meetings, quicker decisions and clearer accountability
MISTAKE 3: Teams have too much autonomy. This creates three areas of concern.
Firstly, transition teams often discover that the assumptions that drove the deal and
figured in the price are inaccurate or invalid, or that the costs of capturing savings are
well in excess of what was expected. Executives may become detached from these
findings or fail to appreciate the care with which they were investigated. Secondly, as
they pursue their assignments, the transition teams may lose sight of the value drivers.
Thirdly, autonomous teams readily share information or consolidate their requests for
information.
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PRESCRIPTION: Each transition team should be sponsored by a member of the executive
team, who should be considered a member and be kept informed of progress and
results.
MISTAKE 4: the transition teams are launched too late. When a merger or acquisition
is announced it can be months before the deal is closed. During this period most
companies wait until the deal is actually completed before it forms and launches the
transition teams.
PRESCRIPTION: Form transition teams a soon as possible after the announcement.
Legislative constraints (for example, on the kind of data that are shared between
companies, what is communicated and what can be done jointly in the interim
period) do not prevent basic planning so that when the deal is finally done the
transition teams can hit the ground running!
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SIN 4 : BARNYARD BEHAVIOUR
THE CHALLENGE
Mergers, acquisitions and other large-scale changes are exercises in organisational
uncertainty, in "acute structural anxiety". People from one organisation fight with
their peers in the other in order to establish a 'pecking-order'.
This induces decisions that favour form over function, titles over accountability and
hierarchy over clarity. The common response to this is either the replication solution
(i.e. copy and customise the organisation chart of a company that you want to
emulate); the assimilation solution (superimpose your organisation chart over the
acquired company's assimilating any unique elements into your structure); or the
accommodation solution (count the number of executives in each organisation,
design a chart to accommodate all). The result is an organisation that serves politics at
the expense of performance and personalities at the expense of productivity. Some
win, some lose, but all are hurt.
How do we avoid this?
THE SOLUTION
Publishing an organisational chart will not create organisational clarity by itself.
People want to know more than who they report to. They want to know what is
expected of them, what they are answerable for, what decisions they own, what
decisions they share. Boxes and lines don't answer these questions
So, what we need to do is define roles and build the organisation chart out of this role
clarity
This is how:
― Start with the value drivers
― Define the impact that each executive position has on driving value in the new
organisation
― Define the results for which each executive position is accountable Identify what
decisions each position owns, what decisions it shares and the interdependencies
between all of the executive positions
― Do the same for subordinates
― The resulting set of accountabilities and interdependencies will define a detailed
structure that supports the business strategy.
Now the organisation chart can be drawn and published.
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SINS 5 & 6 : PREACHING VISION & VALUES AND
PUTTING TURTLES ON FENCE POSTS
THE CHALLENGE:
Corporate cultures, "the entrenched set of behaviours that define how a company
does things" must be merged or changed. How do we change the culture and avoid
the trap of trying to merge cultures (or change them) by formulating and
communicating a common vision and a common set of values, and preaching that
everyone lives the values.
How do we make sure that new positions are filled with the best, most credible
people and so avoid the sin of taking care of your own staff or alternatively
attempting to show impartiality between the two organisations in the filling of new
posts. Either way the result will be that too many people will end up in jobs that can
neither be defended nor understood. They become, in effect, like 'turtles on fence
posts'.
“IF YOU SEE A TURTLE ON A FENCE-POST, YOU KNOW SOMEBODY PUT IT THERE”
Chinese proverb
THE SOLUTION
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Doing this will make it clear that the path to success in your company is in emulating
the defined behaviours
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SIN 7 : REWARDING THE WRONG BEHAVIOURS
THE CHALLENGE
How do we preserve human capital, retaining and motivating the people who will
make a real difference
What is the role of financial incentives in this? Meaningful progress rarely occurs in
acquisitions and mergers until executive compensation is sorted out. The bigger a
person's stake in the game, the more intense their interest, and the more they will
stretch to capture the rewards.
How do we avoid complex, long drawn out incentive planning that is preoccupied with
funding formulae, eligibility criteria, delivery mechanisms, tax treatments and
administrative requirements.
THE SOLUTION
What gets rewarded gets done. So, to get people to behave in ways that support the
value drivers (the 20% of actions that will generate 80% of the value in an acquisition)
rewards must be aligned with what needs to be accomplished. How can we do this?
Develop and implement Value Creation Incentive Plans (VCIPs). These customised
plans are often called 'equity simulators', because they mimic some of the risks and
rewards of ownership of equity without actual shares or options.
VCIPs are self funding, high-stakes, simple to communicate, attention grabbing
incentives.
Here is how VCIPs work:
Produce an incentive pie out of the incremental shareholder value that will be
created under the accelerated transition scenario.
Give managers and key individual contributors slices of the pie based upon their
contributions to incremental value. This may involve meeting strategic development
milestones, achieving market penetration objectives, re-engineering operations or
processes, meeting revenue growth or profit objectives etc.
Pay particular attention to the funding formula; it needs to balance risk and return to
the shareholders with the opportunity cost and compensation level for the
participants.
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ACTIVE LISTENING
ACTIVE LISTENING is the technique of listening carefully, then rephrasing the content of what
the other person said and the feelings they seem te be experiencing. It is an effective way
to make sure you really understand and it often propts the other person to clarify or say
what they really mean.
A KEY PHRASE that can be used is: “You’re saying… and you seem…”
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MENTORING DO’S AND DON’TS
Do Don’t
Be yourself and share your knowledge and Don't expect the mentee to follow in your
experience. footsteps. He or she may not share your career
goals.
Set realistic expectations and boundaries for the Don't neglect the mentee. Respond quickly to
mentoring relationship. Explain your role as a requests, even if it's just to say that you can't meet
mentor, how much time you can offer, the best right away. Let the mentee know where he or she
times to meet, the best way to reach you, and can go for information and assistance if you can't
your preferred working style. help. Don't make promises you can't keep.
Plan what you intend to say, particularly at first Don't wing it, particularly at first meetings.
meetings. What points do you want to cover and
in what order? How do you want the mentee to
feel?
Ask good questions. What are your goals? What Don't dominate the conversation or spend too
do you want to know? How can I know? How can I much time talking about yourself.
help? Listen carefully to the answers.
Encourage the mentee's long-term as well as as Don't limit your discussion to the mentee’s current
short-term growth. job.
Provide a "safe haven" where the mentee can be Don't judge the mentee or breach a confidence.
free from judgment and free to express his or her
concerns and opinions. Give positive feedback.
Remind the mentee that learning comes from
overcoming hurdles and failures, as well as from
successes.
Be sensitive to style and cultural differences. Don't give in to stereotypes. Don't give up if the
Differences influence the relationship most in the "chemistry" isn't right immediately. Remember
beginning. Over time, sharing common values and that an effective mentoring relationship is built on
a common organisational identity can override trust, caring, and commitment rather than
real or perceived differences. Focus on chemistry.
commonalties as professionals and members of
the organisation.
If you have a long-distance mentoring relationship, Don't assume that distance should end the
systematically plan telephone meetings, e-mail relationship.
check-ins, and similar communication strategies to
keep in touch. Schedule extra time to spend
together when you happen to be at the same
location
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NOTES
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