Archive for the ‘Organizational Transformation & Culture’ Category

On values-driven change management

Every business leader knows businesses must adapt to their environment or become discredited and irrelevant over time. But how do you do this as quickly and painlessly as possible?

While there are many leadership styles, the odds of a successful transformation improve when a leader’s values and behaviours are congruent with the mandate of the company, and are seen as aspirational.

Maurizio Bevilacqua, the mayor of Vaughan, Ont., is spearheading significant cultural change, transforming operational productivity, enhancing service levels and improving employee engagement while bringing newfound respect to city politics. His values-driven approach to leadership offers many lessons for people tasked with leading major transformation in any organization.
The mayor is no stranger to the public sector. He has served in government for many years, including as a Member of Parliament for Vaughan for 22 years. In 2010, he left federal politics and was elected mayor of the city. From the get go, Bevilacqua adopted a different leadership style from a typical politician. His approach relies less on command and control management and more on setting the right example and instilling in the culture aspirational, humanistic values.

Values-driven leadership is not new in the private sector. Many of the world’s most successful business leaders — Steve Jobs (Apple), Herb Kelleher (Southwest Airlines) and Jerry Greenfield and Ben Cohen (Ben & Jerry’s) — have imprinted similar values in their companies with great results.

Bevilacqua’s values-driven leadership is demonstrated through a variety of practices and programs. For example, positivity, servitude and goodness are regularly invoked as guiding principles from strategy development on down to personal actions at Vaughan City Hall.

The mayor believes in improving employee engagement through small but personal gestures such as praising the dedicated efforts of employees both privately and publicly, placing a personal phone call for special occasions or simply saying thank you. The commitment isn’t just lip service. He and the members of council provided written commitment to the Vaughan Accord — a 12-point document that defines the principles of public service — a promise of responsible, co-operative, transparent and effective governance.

So far, the mayor’s approach has paid off in spades. Vaughan is now among the top municipal performers in Canada in voter satisfaction, economic development and staff excellence. To wit, a recent Citizen Survey revealed that 90 per cent of Vaughan residents are “very” or “somewhat satisfied” with city services overall, while 95 per cent rated quality of life “good” or “very good.” These numbers have all increased during the Bevilacqua’s tenure.
Furthermore, a fresh, business-friendly environment has led to a 18.3 per cent increase in new business creation since he assumed office. Similarly, his values-driven change has had a positive effect on staff excellence; employee engagement and demonstrated leadership competencies are up 13 and 17 per cent, respectively, compared with 2009.

Mayor Bevilacqua’s leadership style and methods are congruent with other best practice change practices:

  • Develop an inspiring narrative and values Leaders need to appeal to their staff’s spirit as well as logical brain using a simple message communicated regularly;
  • Engage all stakeholders Ignoring some groups, especially skeptics, may short change the effort and create unwanted opponents;
  • Model desirable behaviours Credibility is everything. If leaders talk the talk, they need to walk the walk;
  • Support your staff Nothing slows momentum faster than a leader who does not help their team overcome roadblocks; and
  • Be patient Real change takes time, courage and perseverance

Without a doubt, Mayor Bevilacqua is on the right track to transforming Vaughan. Yet, he should be mindful of the sage words of Pericles, Athen’s leader during the Peloponnesian War. “What I fear more than the strategies of our enemies,” lamented Pericles, “is our own mistakes,” a warning all leaders should heed.

To discuss this topic please email me at mitchell.osak@ca.gt.com

Why do smart executives make bad decisions?

Why do seemingly intelligent and well-meaning executives make bad business decisions?

As consultants, it’s a question that organizations task us with answering, often through postmortem reviews of failed strategic initiatives. The idea is to develop a better understanding of how and why pivotal (and ultimately poor) choices were made in hopes of not repeating the mistakes.

We look at the analysis undertaken, the managerial deliberation and how the final decisions were made. In each case, we discovered that the root cause of the bad choice(s) was not the decision-makers themselves — i.e. stupidity on the part of management — but rather a dysfunctional process for making decisions.

Optimizing the decision-making process can go a long way to improving the level of analysis, managerial buy-in and the quality of the decision. And — perhaps most importantly — it could spare your organization from being responsible for the next Edsel or New Coke.

Worst practices

Rigid silos
Whether purposefully, a product of geography or a matter of culture, employees in many organizations are “siloed” in discrete units or departments. Rigid silos restrict the flow of ideas, hampering the collaborative process required for developing sound analysis and making informed decisions.

Executives who possess a siloed worldview — i.e. “empire builders” — can be particularly toxic. Unlike lower-level managers, these individuals have the power to inhibit the allocation of necessary resources and the development and implementation of strategy that serves the interests of the larger organization.

Excessive politics
Politicking is inevitable when any group is gathered to make an important decision. The trouble occurs when politicking gets out of control and supersedes sound logic. This sort of dysfunction breeds and emboldens bias and ago, which can hijack the process and lead to lousy decision-making.

Common examples of excessive politicking include: prioritizing departmental or career goals at the expense of corporate ones; keeping key stakeholders in the dark through the widespread use of back-channel communications; and overemphasizing consensus building or “what will fly” over what makes the most sense.

Muddled processes
Most large organizations assert the importance of strategic problem solving and retain scores of managers who possess this skill. However, many of these firms fail to create and follow the right practices for guiding and empowering these individuals to reach their full potential.

The process — if it even exists — often follows inadequate preparatory work and is too brief, under-resourced and devoid of key stakeholders. Worse, the individuals who are in the room often possess a shared analytical framework thus and lack the skills, expertise and vision required for distinguishing between a good idea and a bad one.

Best practices

There is no silver bullet for creating and sustaining an effective decision-making process. Every company and situation is unique. However, getting the organizational fundamentals right can go a long way toward mitigating and eliminating many of the aforementioned issues. Generally speaking, best practices include:

  • Developing and implementing a systematic decision-making methodology and process
  • Encouraging open and frank discussions about all options, assumptions and scenarios
  • Providing access to high-quality and actionable data
  • Using practical and coherent criteria for evaluating decisions
  • Having engaged and impartial leaders overseeing the process

For more information on our services and work please visit Quanta Consulting Inc.  Follow me on Twitter @MitchellOsak or connect through email at mosak@quantaconsulting.com

What business leaders can learn from the Seattle Seahawks

Now is probably not the most fashionable time to praise the Seattle Seahawks. Last weekend’s Super Bowl saw the team give up their lead with 2:02 left on the clock and proceed to come up just short of winning by throwing an interception in the last minute. But individual failures do not make of break a team. The long game is what matters, and the Seahawks have demonstrated two years running that they are among the most elite, dependably top-performing franchises in the league.

Below, I’ve outlined some characteristics of the Seahawks’ formula. No doubt, the team’s philosophy can seem a little hokey, but there is no denying that their transparent, competition-driven approach works. These insights should be of great interest to business leaders looking to maximize productivity at the lowest possible cost, and the lessons therein applicable to firms looking for better ways to find and manage talent, develop a supportive culture and align their organization around a central mission.

Recruiting talent

During recruitment, companies talk about their values and expectations — but often in an ad hoc or incoherent fashion. This is because many firms do not invest sufficient time and energy in identifying what kind of organization they are. As a result, new hires often discover they’ve been sold a false bill of goods. This can result in reduced engagement and performance and, worse, increased turnover.

The Seahawks recruit differently. Here’s an excerpt from the brochure they provide to prospective players. According to Coach Pete Carroll,

“We wholeheartedly believe in competition in all aspects of our program, and the only way to compete is to show it on the field. We’re dedicated to giving all of our players a look to find out who they are and what they’re all about so we can field the best team possible.”

This document details a philosophy of competition that is clear and direct. It sets an accurate tone from the original point of contact, letting every prospect and their agents know what will be expected and how they will be measured. This simple step helps to mitigate the likelihood of unpleasant surprises down the road.

Managing talent

The fact that more and more can be measured now — both in terms of productivity levels and strategic success — can put managers under a microscope. This inevitably results in an adversarial, “what have you done for me lately” management style and a general risk aversion when it comes to decision-making. Needless to say, this in turn can lead to diminished long-term competitiveness, poor morale and, again, increased turnover.

Seahawks management takes a different tack. Despite poor play for much of the final game, Coach Carroll never wavered from his season-long game plan and reliance on all players in his line-up. He stayed loyal to key players such as Russell Wilson. And, he was not shy about using new players like Chris Matthews. While Mr. Wilson was mediocre during most of the first half, he did lead the team back strong in the late 2nd quarter to the end of the game.Mr. Matthews led the Seahawks in passing reception yards in the final game, despite not catching a pass for the entire season and being a shoe salesman not too long ago.

Rewarding talent

Recruiters tend to bring certain assumptions to the table regarding what kind of person is best for a certain job. These biases often include a preference for candidates from a certain school, possessing a certain degree or having had certain work experience. These assumptions usually go unchecked because many organizations lack the performance measurement systems necessary to uncover what actually works — and what doesn’t. This can result in qualified, and often less expensive, talent being overlooked. Just as troublesome, it can result in weak performance being unwittingly rewarded in terms of hires, promotions and salaries.

The Seahawks, on the other hand, are hard-nosed and pragmatic in their approach. Everyone must compete for their positions every day, regardless of where they come from or what salary they command. Crucially, the Seahawks aren’t afraid of putting un-drafted and untested free agents on the field. These players tend to put in their best effort in exchange for the opportunity. For example, they signed Russell Wilson, who many teams passed up on because he was considered too small, for less than $1-million per year. He went on to be an all-star quarterback. This not only provides the Seahawks with more affordable talent, it motivates their big guns to avoid resting on their laurels and to continue to demonstrate why they deserve to be on the field.

For more information on our services and work please visit the Quanta Consulting Inc. web site.  Also, please follow me on Twitter: @MitchellOsak

5 steps to rebrand your business

The successful rebranding and strategic pivot of Tangerine, formerly ING Direct, was the product of strategic insight, thorough analytics and diligent planning. Just as critical was the firm’s ability to pull off a complex transformation in a time of market uncertainty and regulatory change. With 70% to 80% of change initiatives ending in failure, Tangerine holds many lessons for companies looking to strategically reposition themselves or undertake other change initiatives.

“Managing change can be both challenging and rewarding,” says Peter Aceto, president and CEO of Tangerine. “Since we all perceive change differently, it is a journey that must be met with honesty, regular communication, reassurance and, above all, a positive attitude.”

ING Direct was purchased by Scotiabank in 2012. The new entity had two ambitious goals to be achieved by 2014: first, to rebrand under a new name and identity (soon to be Tangerine); second, to expand beyond the firm’s core positioning (tagline: “Save your money”) to include new services and products relevant to their Web-based customers (tagline: “Forward banking”).

Execution missteps, such as ignoring cultural issues, poor planning or lack of management follow through, make real change very difficult to pull off. The challenge for a 1000+ employee bank like Tangerine is to execute major change initiatives with existing resources without compromising existing revenues, service levels or regulatory compliance.

“While it definitely had its challenges,” says Mr. Aceto, “I can say that we’ve come out stronger than ever before while staying true to our core values and the brand that Canadians know and love.”

Tangerine’s leadership deserves credit not only for formulating the right strategy, but also for executing on that strategy — arguably a much bigger challenge. The company pulled off the repositioning without missing a profitability beat or alienating its parent company. Since announcing its name change, Tangerine has exceeded its profitability and custom acquisition goals without compromising its image.

What best practices for managing change can other companies learn from Tangerine?

Start at the top

Successful change requires cross-functional involvement by senior leadership throughout the entire transformation process. Management accountability ensures appropriate focus, ownership and resources, as well as providing timely attention when unexpected problems arise (as they inevitably do). In alignment with Scotiabank, Mr. Aceto personally led the brand transition from the initial discussion through the planning and execution. He was also active in removing resource and organizational roadblocks when they occurred.

Create a narrative

A “change story” should be developed at the outset, connecting the change with who you are as an organization, how you generate consumer value and where you are going. Where cultural change is required, management needs to deploy detailed programs outlining target behaviours, processes and practices. Tangerine expended a considerable amount of effort developing a positive narrative for its customers, employees and partners — namely, that the acquisition was the best way of enabling future growth beyond the core business.

Communicate regularly

The likelihood of misinformation, rumour and uncertainty is quite high during transitions. To avoid these traps, leaders must regularly communicate to all stakeholders in a direct, honest and succinct fashion. Initially, key messages should articulate a desired end-state, a high-level roadmap and the benefits and risks associated with the strategy. Once the transformation has begun, communications should reinforce the narrative, acknowledge positive role models and provide progress updates.

Pay attention to the human element

Management actions early on signal to workers the priority and tenor of the change initiative, as well as what life will be like post-change. Successful change pays attention to each employee by creating individual metrics and adjusting priority lists. While plans and processes are important, ignoring the human dimension can scuttle buy-in and morale and increase business risk. When necessary, Tangerine’s managers undertook the “tough” conversations with employees in the spirit of mutual respect.

Don’t mess with success

Tangerine’s leadership, planning and execution were vital to ensuring the transformation happened in fewer than 18 months. However, credit must also be given to the role played by Scotiabank. Many acquirers feel compelled to take charge and be highly prescriptive in their oversight. Scotiabank’s post-acquisition leadership team understood much of what they were buying was a unique culture and aligned early on with Tangerine’s senior team to avoid over-managing during the transition or in ongoing operations.

For more information on our services and work, please visit the Quanta Consulting Inc., web site.

Using behavioural economics to trigger action

Behavioural economics posits that all human behaviour, including in business, is shaped by irrational and unconscious influences, such as bias, social pressure and cognitive inertia. The notion of psychology as a driver of economic action is not new: As an academic discipline behavioural economics dates back to the 1970s, and the foundational principle back at least to Adam Smith’s The Theory of Moral Sentiments (1759). Behavioural economics has, however, only in recent years found widespread currency within the business world, spurred by a plethora of bestsellers, including Thinking Fast and Slow (2011) by Daniel Kahneman and Predictably Irrational (2oo8) by Dan Ariely.

Increased interest from the business community is due to the insights gleaned from the discipline, which have been used to successfully “nudge” customer behaviour in a variety of sectors, such as wealth management, insurance, customer products and retail. Specifically, behavioural economics has been used by product managers to guide consumers toward certain product choices (i.e., “choice design”), by marketers to develop brochures and Web sites that more persuasively communicate marketing messages and by service managers to design better support experiences.

The field can provide hundreds of potential “triggers” to augment behaviour, depending on the business objective, situation and context. Psychologists Robert Cialdini, Noah Goldstein and Steve Martin identify 50 different possible applications in The Small Big: Small Changes That Spark Big Influence (2014). Three among the list include:

  1. Leverage social proof: People will make the same decisions as a group with which they identify. Nudge people to adopt a new behavior by showing them a training video featuring their peers doing the same thing.
  2. Invoke first names: Get and keep people’s attention by frequently using their first name. A sales representative’s repeated use of a prospect’s name will cue their attention through the clutter of other sensory inputs and focus attention on the key message.
  3. The power of loss avoidance: Individuals strongly prefer avoiding losses to acquiring gains. Marketing studies have shown that consumers would rather avoid a $5 surcharge then get a $5 discount even though the net effect is the same.
    Case study: behavioural economics in action

Communications Case Study

A technology company was struggling with customer support issues, resulting in unsustainable levels of customer churn, high support costs and wasteful discounting. We were tasked with identifying the root cause of the problem and recommending fixes.

We reviewed the support scripts and escalation processes and listened to call records. Using the lens of behavioural economics to look for unconscious biases, explicit and implicit incentives and insidious social pressures, we discovered both that the existing scripts were ineffective and that the prescribed escalation process was not being followed by most service reps.

While management believed more resources and training were the answer, we convinced them to first experiment with a pilot program that featured rewritten scripts and process redesign. These changes included a variety of nudges to trigger the desired service experience, including:

  • Establishing a rapport from the get-go: People are more easily persuaded by those that they like and have some connection with.
  • Starting with the bad news but ending on a high note: Getting bad news out of the way shows empathy, acknowledges responsibility and allows for a good finish.
  • Following the script: Because a good process is only effective if it is consistently applied, we recommended having service reps formally and publically commit to following the revised protocol.

By implementing insights gleaned from behavioural economics, customer satisfaction scores increased, service escalations fell and cross-selling rates improved.

Behavioural economics for your business

As mentioned earlier, how you should apply behavioural economics insights to your business depends on your circumstances and your goals. However, here are five general tips to guide your strategy:

1.  Understand the business context:  What business problem are you trying to solve?
2.  Audit key customer decision points:Look for hidden bias, social and incentive pressures and opportunities to catalyze desired actions.
3.  Prioritize your opportunities: The economic, operational and brand impact of each decision should be considered.
4.  Identify suitable nudges:This should involve an optimized choice design that guides actions and decisions toward your desired result.
5.  Experiment, measure and scale: Only then will you discover the optimal strategy for your business.

For more information on our services and work, please visit our web site at Quanta Consulting Inc. 

6 traits of great cultures

Several studies confirm the correlation between corporate culture and financial performance, employee engagement, levels of innovation and customer satisfaction. Companies such as P&G, Southwest Airlines, FedEx and Starbucks have been able to differentiate and excel in highly competitive markets in part by developing and sustaining healthy cultures. By the same token, the toxic cultures of firms such as GM, Blackberry and Air Canada have contributed to declining market performance.

In short: culture matters. But what exactly is culture?

A culture can be defined as the norms, practices, history and values of an organization — in other words: “how things are done around here.” The health of a culture is generally quantified through employee engagement scores, with Canadian companies averaging 40-50% engagement.

These days, companies are looking to enhance their organizational life without turning their company inside out. While the differences facing each firm often call for unique approaches to cultural renewal, best practices cut across different sectors and organizational structures and are always based on inspiring leadership and skilled management. Below, I’ve identified six tips for developing a highly successful corporate culture.

Lead by example
Leaders don’t work on culture, they work in it, tracking it, modelling the right behaviours and communicating core messages. Savvy leaders look beyond yearly employee surveys to regularly gauge sentiments and enlist feedback during weekly chats or informal events. David Agnew, CEO of RBC Wealth Management Canada, undertakes frequent branch visits, meets directly with clients and regularly and directly communicates with all of his team, as well as rank-and-file employees.

Tell your story
Every company has a story. Great leaders capture and articulate this story in an inspiring way in order to develop a powerful mission or ethos that serves as an organizational “North Star” (or guiding principle). A good example of a North Star is Google’s inspiring mission to organize the world’s information and make it universally accessible and useful.

Provide purpose
In a healthy culture there is an implicit — if not explicit — awareness of the connection between mission (what value you deliver), values (what inspires your activities), actions (what needs to be done day-to-day) and behaviours (what becomes second nature). Employees within these cultures tend to strongly identify with their company’s purpose, values and goals, improving both engagement and satisfaction.

Solicit feedback
Internal practices, tools and policies play a vital role in promoting or hindering desired behaviours. These practices need to be regularly reinforced and tweaked as necessary to ensure high performance and adaptability to new conditions. Some proven steps include having monthly town hall meetings, encouraging interactions outside of work and utilizing knowledge management systems.

Inculcate and reinforce
It is easier to attract and build an esprit de corps and promote the right behaviours when the firm has effective mechanisms to manage human capital. RBC Wealth Management Canada has extensive on-boarding and training programs for new hires, culture-reinforcing performance management systems and ongoing practice management for seasoned professionals. “It really helps us to attract and retain the industry’s best people,” says Mr. Agnew.

Embrace differences
Healthy cultures are not homogenous. Numerous studies have demonstrated that higher organizational performance and innovation come from diversity, not uniform workforces. Though RBC has a dominant ethos, it does not seek out one specific kind of employee, believing diversity of talent and style can help contribute to continued growth. “There are no shortcuts to establishing and maintaining a positive culture,” says Mr. Agnew. “It requires an investment of time, effort and resources at all levels of the organization.”

For more information on our services and work, please visit the Quanta Consulting Inc. web site.

Social business replaces social media

Busy managers should be excused if they are not current on every development in the social media world. In discussions around digital transformation, one question regularly comes up: “Where is social media heading?” Based on our research and project work, we have identified four emerging social media trends. Overall, social media is morphing from a communication tool to a larger social business enabler.

1.  It is not just for the marketers

Marketing no longer has a monopoly on social media programs. Other groups like HR (for external recruiting), product development (for innovation) and customer services (for product support) are increasingly driving usage on these platforms and delivering business value.

2.  Content strategies are evolving

Most marketing efforts “push” content out more than 90% of the time. Marketers (and other departments) will progressively become more social, seeking a balance between pushing information and engaging their customers in dialogue around the content. Moreover, visual content will likely become more prominent in these social and collaborative conversations. Expect new social apps to better support the embedding of visual content (including live video) into conversations to better deliver sales demos or technical support.

3.  Resetting the community button

Many attempts at community cultivation are failing due to a lack of resources and mismanagement. Equally important is the dearth of dialogue-fostering social elements in the content, such as relevance and uniqueness that cater to specific interests. “At its core, social media is about being social. Your social strategy should be designed to deliver an interesting core message that wants to be shared,” says Marilyn Sinclair, president of communications company All About Words. Companies are steadily getting serious about building focused communities that emphasize social sharing.

4.  The rise of social analytics

To better target business problems, understand customers and generate enterprise-wide ROI, firms are beginning to analyze, listen and learn from customer experiences, and tap into the social pulse of customers, advocates, influencers and their collective networks. These learnings will improve the quality and quantity of social media interactions.

Social business initiatives are all about enabling workers to collaborate with customers through social media to solve problems or capitalize on opportunities. To do this, participant conversations will need to cross functions, locations and devices, blurring the barriers between the internal and external roles. This transition won’t be easy for every firm. Gartner, an IT research firm, predicts, “Through 2015, 80% of social business efforts will not achieve the intended benefits due to inadequate leadership and an overemphasis on technology.”

The following success factors can help a firm exploit the trend towards social business:

  • Make strong leadership and expert change management a priority

When it comes to leveraging IT, the corporate Achilles Heel is often internal adoption. All senior leaders — and not just the CIO — should prioritize social business initiatives, model the right behaviours and deploy the right change resources and tools to drive employee acceptance. For example, some CEOs are appointing Chief Digital Officers to drive digital adoption across the organization. In other cases, companies have created senior, cross-functional steering committees to secure alignment, focus and investment. Technology is merely the delivery system

  • Establish a clear and compelling purpose for social business from the outset

Most organizations look at collaboration as a technology platform issue not as a solution to a specific business problem. Having a platform view isn’t necessarily wrong from an enterprise perspective but it frequently leads to band-aid approaches that don’t get to the root cause of problems and typically get bogged down in organizational inertia.

“Organizations fall in love with the newest ‘thing’ and they want to be cool, but they forget that their objective is to compel an audience to do something specific. Clear, consistent and compelling messaging that address social business needs across all platforms is key,” says Sinclair. “Technology is merely the delivery system.” Social business is best enabled when the business problem drives all key decisions including technology choice.

  • Consider systems and cultural tweaks to support social business

Many companies today are not well organized to conduct social business. For example, community management and customer-service efforts often lack sufficient capabilities including tools, people and skills to deliver credible programs that address customer needs. In other cases, a firm’s organizational dynamics (e.g., siloed structures, and oblique processes), performance measurement tools and culture norms do not promote free flow communication let alone collaboration.

Companies can maximize the value of their social media investments and efforts when they shift from a marketing-centered, “push” approach to an organization-wide, problem-solving strategy that engages both the community and firm. The first step in leveraging social business comes from exploring how a company can meaningfully talk and listen to their customers and stakeholders to collaboratively address their needs through the right business solution.

For more information on our services and work, please visit the Quanta Consulting Inc. web site.

Organizing for global growth

Management guru Alfred Chandler asserted that business excellence comes about when “structure follows strategy.” Unfortunately, many Canadian firms with global ambitions fail to heed this axiom. In their drive to tackle international markets, they often pay insufficient attention to how certain groups, like marketing, end up being organized and perform their functions. This neglect can kibosh even the boldest plans. Fortunately, managers can fall back on a rich trove of best practices.

Companies go global as part of an organic growth strategy or because of an acquisition. The potential returns are great but so are the risks. Given the high stakes, leaders should tread carefully but not too hesitantly.

Managers need to address three key questions up front:

1. Which organizational model — centralized at the home base or decentralized at the local office — can best deliver the growth plan?

2. What are the tradeoffs between a single, global message/program and more tailored, local campaigns?

3. How do you foster integration, collaboration and sharing of best practices between the different offices and teams?

Addressing these questions will expose latent tensions and implementation issues (and new synergies) between various approaches and groups. The story of how two firms addressed the challenge of going global differently illuminates some best practices and key pitfalls. Lets start with a company that has done it right — Manulife Asset Management, the investment arm of insurance giant, Manulife Financial.

Though a global business, it was not leveraging its international marketing and distribution capabilities to market as a local one. The leadership was looking to drive more cross-pollination of best practices and tools, better servicing of local client needs and more efficient processes and practices. A senior Manulife executive, Anthony Ostler, was brought in to reorganize the entire marketing structure. Some of the major changes included: establishing a centralized CMO office; retuning roles and responsibilities, as well as workflows; and promoting richer communication. After 12 months of transformation, the results were impressive. Lead generation and RFP success rates soared and margins widened while overall marketing spend fell.

What they did right:

  • Collaboratively redefined success and the marketing and change strategy that would deliver it, aligning all teams and offices to that single vision
  • Looked at the business holistically but did not shy away from getting the details right, like refining employee career paths, adjusting metrics and optimizing workflows
  • Adopted a “hub and spoke” model that centralized key activities like strategy and RFP creation and decentralized others like product development and local marketing support.

Ostler believes “Focusing on the client experience helped to guide all the decisions and was critical to success. At the same time, efficiencies could be recognized by globalizing certain aspects and we moved aggressively to do this. This client focus coupled with efficiencies helps the business to grow.”

At the other end of the spectrum is a professional services firm that acquired a successful overseas competitor in order to get a foothold in a market it deemed vital for growth, and to ensure retention of its multinational clients. This was not a hostile takeover and the clients viewed it favourably. However, after 18 months the forecasted revenues were not materializing despite significant marketing investment and considerable head office attention.

What they did wrong:

The new firm was managed in a controlling, overly formal fashion that was at odds with the professional services firm’s more entrepreneurial culture and practices. For example, local marketing programs were abruptly cancelled in order to capture early cost savings. Since both offices shared many of the same clients (often on the same project), the acquiring firm assumed the habits and needs of these clients were similar across geographies. In reality, each client subsidiary acted very differently leading to problems and gaps in service and delivery. Finally, the acquiring firm lacked the stamina to fully integrate many of the systems between the two companies. As a result, they were never able to leverage their important knowledge and human capital management systems and achieve the desired productivity and innovation gains.

Going forward:

Since every situation differs, a “one size fits all” approach in areas like organizational design and sales & marketing planning rarely works. Organizational, channel and program integration is not easy but must be relentlessly pursued in order to maximize program efficiency & effectiveness, minimize internal strife and drive collaboration. Using proven change management tools is critical. At its core, excelling as a global company is about dissimilar people working together. Ignoring the needs and aspirations of your teams will compromise organizational performance and business results.

For more information on our services and work, please visit the Quanta Consulting Inc., web site.

6 steps to transformation

To everything, turn, turn, turn.

There is a season, turn, turn, turn.

And a time to every purpose under heaven.

The Byrds

In today’s dynamic business environment, it is axiomatic that firms must in some part reinvent themselves to compete at a high level. Yet, this is easier said than done. Transformation is hard and as economists say, ‘there is no such a thing as a free lunch’. Fortunately, change agents can fall back on some battle tested lessons to improve their chances of success.

Many Canadian companies such as Target, Blackberry and Rogers are dealing with industry, customer, or technology challenges. These issues can range from battling a disruptive competitor or adapting to a zero growth market to trying to leverage the potential of digital technology or adjusting to new consumer behavior. Should they rise to the occasion, firms can ramp up competitiveness, boost profitability and enhance their brand image.

Genuinely transforming an organization’s core strategy, key activities or operating model is part art and part science – and loaded with risk. The challenge is akin to converting a car into a bus during a road trip: The car needs to adroitly mutate without breaking down or running off the road. The driver must be mindful of picking the right destination, taking the right route, choosing the right passengers and maintaining a vigorous but safe speed.

I have witnessed many successful transformations over the past 25 years. Though each case is different, winning companies tended to have strong Boards that empowered current or incoming CEOs to:

1.  Unify cross functional leadership around a new vision and change rationale, both of which were turned into a compelling narrative and an ambitious change plan;

2.  Quickly engage employees, suppliers and partners to build support for the new vision and roadmap;

3.  Test ‘sacred cow’ assumptions about what drives revenues, brand image, customers and costs;

4.  Make tough decisions around priorities, funding and resourcing, as they fit within the new vision;

5.  Go for quick wins that build on early momentum;

6.  Course correct the plans and activities when necessary.

The recent shake-up at Rogers is a good example (so far) of how to kick off a transformation. It is no secret that Rogers has had issues with poor customer service and rapidly changing market dynamics. A new CEO, Guy Laurence, was brought onboard in December 2013 to turn things around. At the outset, he spent a few months analyzing the entire business. One of the first things Laurence did was travel the country listening to employees, customers and partners about what ailed the company, the root causes of problems and where were the sources of growth. These learnings served as the foundation for a new customer-centered strategic vision focused on two go-to-market pillars – consumer and business – versus wireless, cable and media. Next, Laurence designed a simpler two-division structure that could drive both these pillars. Tough choices were (and will be) made around strategic priorities, staffing key positions, as well as defining new roles and responsibilities. Finally, Laurence is spending time communicating this plan down and across the company. Time will tell if his efforts bear fruit.

Yet, leaders should be mindful of hidden or unintended consequences during transitional periods. While a successful transformation can rejuvenate an organization, it can also hamstring a firm over the long-term. Risks are embedded in the financial and personnel trade offs that need to be made early in the change process. In particular:

Loss of talent

Inevitably, significant talent and institutional knowledge will be lost, the value of which is difficult to estimate early in the process. Rogers’ new structure eliminated the CMO position and replaced it with three smaller jobs. This decision left CMO John Boynton without an appropriate role and no job. Losing a wireless industry pioneer and seasoned marketer (#28 on Forbes’ list of the World’s Most influential CMOs) is never a good thing, potentially compromising long-term management depth and expertise. Having said that, Roger’s structural change is another firm’s gain.

Things get worse before they get better

Changes in structure, people and practices always bring hiccups. It takes time and money (e.g., you may need to invest IT) to execute with excellence, which you may not have when you need to deliver strong quarterly numbers. Furthermore, the confusion, strife or uncertainty around change efforts can lead to drops in employee engagement and brand image scores not to mention unintended employee and customer turnover. Not surprisingly, Laurence has acknowledged the potential for challenges over the next couple of quarters.

Change is inevitable. Leaders will improve the odds of transformation success if they follow best practices, stay the course and not ignore the potential ramifications of the decisions they make early in the process.

For more information on our services and work, please visit the Quanta Consulting Inc. web site.

Building a high performance culture

When it came to defining the number one driver of organizational performance, no one hit the nail on the head quite as well as esteemed management scholar Peter Drucker who stated unequivocally, “Culture eats strategy.” Drucker understood companies that build powerful cultures tend to outperform their peers over time. However, building or revitalizing a culture is easier said than done. The challenges should not prevent leaders from embarking on what will be a long and potentially painful journey. Where do you begin, especially in mature organizations?

A culture is an organization’s norms, practices and values as defined by its senior leadership, history and market position. Culture is vital to corporate and employee performance in that it acts as a mobilizing spirit, an enterprise-wide lingua franca, and a strategic anchor. Building a vibrant culture is equal parts strong leadership, defined values, effective change management and supportive organizational tools.

Research has found that firms with high performance cultures (which include strong organizational competencies like rich communications and focused leadership) will significantly outperform their competition. For example, a 2007 McKinsey global study on organizational and cultural performance (encompassing 115,000 employees across 231 organizations) found companies scoring in the top quartile are 2.2 times more likely to generate superior profitability than likely bottom quartile companies. It is no coincidence that many market leaders such as P&G, Apple, Zappos, Google and Disney are known for their strong, enabling cultures.

Given today’s hyper-competitiveness and rapid diffusion of technology, maintaining a vibrant and distinctive culture may be one of the few areas left where managers can generate long-term competitive advantage.

Nurturing transformation is not easy. It will falter without a sustained leadership commitment and changes to management systems. According to Chris Boynton, principal at human capital consulting firm Red Chair, “Culture is the way we do things around here, so the ideal way to change the culture and make it stick is to get the leadership front and centre, and align the management systems around the desired change.”

Through consulting to a variety of sectors, I have identified six ingredients of winning cultures. The role and scope of these drivers will vary depending on the firm’s existing culture, leadership, and external circumstances.

1. A shared vision & values

Strong cultures stress the “we” over the “I” and adopt a unifying creed (i.e. purpose, sense of history)

  • We see our market and customers in the same way
  • We know where we are going
  • We subscribe to the same core values and narratives

2. Free flow communications

Powerful cultures feature high levels of communications

  • There is open and frank conversation on any topic based on a commonly understood lexicon
  • Information flows freely across silos and up and down the hierarchy
  • There are regular conversations between managers and subordinates as well as with key external stakeholders (e.g., customers, suppliers)

3. A right-size organization

Leaders strive to design the optimum management system for the business strategy.

  • There are defined roles & responsibilities and information rights
  • ‘Structure follows strategy’
  • Any organizational change is thoroughly considered and painstakingly executed

4. Commitment to employee growth

Strong cultures view employees as assets, to be nurtured and empowered.

  • Firms seek to get employees in the right roles. ”Even a motivated and trained employee in the wrong role or team, like a nurtured seed in a poor garden, will just not grow and produce,” says Boynton.
  • Workers are regularly challenged with interesting work and supported with the right amount of training and coaching
  • Organizations strive to get their recruiting, hiring, and on-boarding processes right

5. Merit-based performance management systems

Employees will only perform as well as they’re managed. For example, emphasizing the positive is the typical approach to feedback. However, according to Boynton, “Praise drives greater performance than critiques, yet we spend most performance conversations focused on shoring up their weakness.”

  • Performance management systems are transparent, objective and regularly utilized
  • Individual and supplier metrics align with corporate goals and values
  • Companies tolerate a reasonable amount failure but seek to learn from them

6. Comfort with change

Given today’s uncertain business climate, rapid change is critical for success.

  • Change is recognized as a fact of life and a strategic necessity
  • All stakeholders are regularly consulted and engaged before change occurs
  • A high level of trust underpins change initiatives, reducing fear and improving collaboration

No doubt, getting all six characteristics right will not be easy or quick. This is a people-driven exercise so there is no substitute for patient leadership, strong values & narratives, and supporting mechanisms such as collaboration tools and internal training. Fortunately, firms can significantly boost performance if they master only 2-3 of these while continuing to strive for improvement in their under-developed areas. Given the financial rewards, there is no better time to start than the present.

For more information on our services and work please visit the Quanta Consulting Inc. web site