Industry-Specific Programs
Strategies for Successful Enterprise-wide Transformations

What makes organizational transformations successful? Many promising large-scale change initiatives fail. Academic researchers and senior industry executives offered insights on strategies for success at a recent program in Philadelphia for senior human resources executives, sponsored by the International Consortium for Executive Development Research (ICEDR), Deloitte Touche Tohmatsu, and The Wharton School.

"The conference stressed that while transformation is implemented differently in every company, there are common themes that are consistent throughout all corporations," said Doug Ready, President of ICEDR. "The executives and other experts stressed that HR needs to be involved early in transformation discussions, guide the firm to adopt system-wide thinking, and help develop leaders capable of leading change. Finally, HR professionals need to be open to taking risks during the change process."

Strategies for Success

Among the insights on factors contributing to the success of organizational transformations were:

  • A compelling need: The "case for change" must be focused and linked to a compelling strategic agenda. Colin Crook, Senior Advisor to the Wharton Fellows and former CTO of Citibank, described when Citibank's CEO announced the need for change when the company was on the verge of going out of business. When a CEO is focused and articulates a compelling call to action, change can happen. The plan was relentless, and it succeeded. He also discussed how Motorola successfully transformed its business in the face of a threat from Intel.

  • A critical mass: The CEO and top team must be committed to the change, and there must be a critical mass of people within the organization who are aligned with the mandate for change. Ray Stata, founder and chairman of the board at Analog Devices discussed the changes that Analog has gone through over the past 40 years. The latest phase of change has involved taking the company apart and putting it back together to encourage cross-silo coordination. One of the more difficult tasks in this most recent process has been to balance the core beliefs and values that have made the firm successful for 40 years with the need to change the organizational structure. Stata noted that organizational commitment is very important because transformation always takes more money and time than managers expect. There also is pressure to abandon change and go back to old ways, so a leader has to understand what the stakes are and how to reach the end goal.

  • Clear communication and prioritization: The processes for implementing the change must be clear, well communicated across the organization, and support the strategy. Elisabetta Bigsby, group head, Implementation Office and Human Resources, at RBC Financial Group, said their initiative to eliminate duplication, establish accountabilities, and delayer Canada's number one bank taught them the importance of communicating top team commitment throughout the organization. She also stressed the need to establish clear rewards and consequences and use prioritizing to stop doing what matters less.

  • Accountability: The accountabilities for change must be well defined. Dennis Baltzley, head of leadership development at Royal Dutch Shell Group, said accountability and feedback for success were critical to the success of their "One Shell" initiative.

Changing Thinking

Crook, co-author of The Power of Impossible Thinking, stressed the importance of changing "mental models" to facilitate change. He was joined by four distinguished Wharton Fellows – Margery Brittain, VP MetLife; Dave Johnson, SVP Commercial Operations Convatec (BMS); Arezu Ingle, VP HR, Thomson; and Tom Matthews, SVP Saks 5th Avenue. They shared their own experiences in organizational transformations.

These small-group discussions enabled the participants to have more detailed conversations on the specifics of implementing successful enterprise-wide transformation. Peter Capelli, professor of management at the Wharton School, concluded the session with a case study.

The Role of Human Resources

HR leaders have a critical role to play in supporting and driving organizational change. Participants discussed a variety of proactive opportunities for HR to make a difference in change initiatives:

  • Become involved early and be a trusted, respected coach to key stakeholders in the change process.

  • Understand both unit and enterprise strategy.

  • Provide practical applications of organization design, change processes, human dynamics — use technical knowledge of organizational development to coach senior executives through the perils of failed implementation.

  • Be a facilitator, architect… "leading from behind" and having the courage to act. Don't wait to be told to be a leader — you have to be one. Be a player and not just an order taker.

  • Monitor the integrity of the change process. Help decide what is needed to sustain or reinvigorate the change initiative.

As a follow-on to this important topic, ICEDR will offer a one-day workshop in London on Implementing Change Strategies. This workshop will enable partner companies to send both HRD executives and line managers to learn the tools needed to implement a successful enterprise-wide transformation.

ICEDR's goal during its semi-annual Forums is to bring HRD executives from leading global companies and business schools together to talk about issues that are top of mind, such as Implementing Enterprise-wide Transformation. World-class thought leaders are brought in for in-depth discussions that result in applications that partners can use at their organizations.

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