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  Change Management - What the experts say

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Author Topic:   Change Management - What the experts say
Andy Bassett
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Posts: 274
From:Donegal Ireland
Registered: Jun 1999

posted 18 July 2000 03:34 AM     Click Here to See the Profile for Andy Bassett   Click Here to Email Andy Bassett     Edit/Delete Message   Reply w/Quote
Source Economist July 13th

COMPANIES, as every management consultant tells them, live in an era of incessant change. But some are clearly better at changing than others. Two new surveys suggest some reasons. One finds that only one in five change-management projects succeeds. The other shows that companies that are bad at change are far more likely to use outside consultants to handle it than those that are good at change.

When, late last year, A.T. Kearney (yes, a consultancy) asked senior executives in 294 medium and large European companies to rate their change programmes, only 20% were considered a success. An astonishing 63% had made some temporary improvement, but failed to sustain it. The remaining 17% had achieved no improvement at all.

This is an expensive outcome, given that 90% of respondents said that cost reductions were one of the main goals of change. A far smaller proportion (27%) gave increasing revenue as an important goal. Craig Baker, who leads A.T. Kearney‚s European „enterprise transformationš practice, sees the outcome as part of a long succession of research results suggesting that organisational change is hard to achieve. He points out that two-thirds of re-engineering projects seem to fail; and, in Britain, less than half of all „total quality managementš programmes show any demonstrable results at all.

Yet firms keep trying. The second survey, conducted late last year by Atticus, a British consultancy, claims that companies that are „ableš at change show striking differences from those that are „ineptš. Atticus contacted 3,000 companies around the world and got replies from some 400, marking themselves on a scorecard that measured their ability to change. The results showed that, for companies in the top 5%, top managers were more than twice as likely to be involved in change projects as they were in the bottom 10%. The top 5% were also three times as likely as the bottom 10% to have pro-active policies on communicating change.

Even more dramatic was the contrast in the use of external consultants. Asked to say whether „change expertiseš was „embedded as a functional capabilityš, four out of five of the most „ableš companies said yes, compared with one in five of the „ineptš. But none of the „ableš companies said they had handed the task to consultants, which a quarter of the „ineptš businesses did.

A.T. Kearney‚s findings chime with these. The largest gap between companies that were good and bad at change, says Mr Baker, arose because some learnt from change and institutionalised their knowledge, building it into their culture and performance assessment. Companies that are good at change are, he finds, more sophisticated in the way they use consultants, who are hired to work with senior managers rather than to supplant them. Because such companies learn, their changes are more likely to be sustainable.

At GTE, a telephone company based in Dallas, Texas, that is merging with Bell Atlantic and is near the top of the Atticus „ableš table, Bruce Rosenstiel, the quality-service manager, describes one mechanism for continuous change. The company has a tradition of „quality-improvement teamsš that design and implement changes. Employees get incentives to join a QIT: „You get a mug for the first one you are on, a clock for 11, an oil lamp for 41, a crystal star for 51,š he says, proudly. Last year, 90% of GTE‚s employees participated in at least one such team.

QITs tend to drive bottom-up change. GTE also sets up lots of taskforces to manage top-down change. This network, says Mr Rosenstiel, means that „if we identify a new product, we can roll it out very fast.š As for outside consultants, „not since the late 1980s have we used them on managing a project.š They are for training and technical advice, not management.

Another company scoring well on change, Glaxo Wellcome, is also in the throes of a merger. Its British division emphasises the need for communication with staff through events dubbed „open lunchesš and (for staff outside the office) „tea-time chatsš, to explain changes before they take place. As for consultants, says Anne Prichard, personnel director of Glaxo UK, they are used mainly to develop specialist capabilities.

Even so, a company keen to do better at change might be unwise to ban consultants from its premises entirely. But once it was capable of doing the job with only limited outside help, it would know it had arrived in the „ableš category and left the „ineptš. That is certainly a change worth making

No big surprises their!!! Or What do you think?


Andy B

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