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In Conversation With Bob Hennessy, CEO  Bearing Point - Business Transformation
 

In Conversation With Bob Hennessy, CEO Bearing Point - Business Transformation

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White paper produced by Robertson Executive Search on Business Transformation

White paper produced by Robertson Executive Search on Business Transformation

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    In Conversation With Bob Hennessy, CEO  Bearing Point - Business Transformation In Conversation With Bob Hennessy, CEO Bearing Point - Business Transformation Document Transcript

    • In Conversation With… Bob Hennessy Chief Executive Officer BearingPoint “Change Management: IT Enabled Business Transformation” October, 2010Executive Briefing Series ‘In Conversation with…” Presented by Robertson Executive SearchContact: pgoddard@robertsonsearch.com prush@robertsonsearch.com L10/ 155 George Street, Sydney AUSTRALIA 2000
    • Introduction Change and transformation have become core organisational activities that have become central to how organisations gear themselves for competition, deliver ongoing increased margins to shareholders and better products and services to customers. A PwC 2004 study of 200 companies found a clear link between change management, high performance and a high project management maturity level. They found that 59% of project failures are caused by organisational aspects. The key to unlocking value is how change is perceived and the degree change is embraced in organisations. Information technology is central in delivering high impact outcomes. Bob Hennessy, CEO of BearingPoint and several key CIO’s and executives from leading Australian organisations gathered at Robertson Search to discuss how they and their teams manage change and share their collective experience. What is central to change/transformation programs? Bob shared his early experience with change management, circa 1982, with respect to the steel industry. The organisation wanted to change the production methodology from specific runs ofExecutive Briefing Series ‘In Conversation with…” Presented by Robertson Executive SearchContact: pgoddard@robertsonsearch.com prush@robertsonsearch.com L10/ 155 George Street, Sydney AUSTRALIA 2000
    • products to instead, produce what clients needed at any anytime. Bob shared how he and his team built a change management prototype to determine the effect and impact of the change in processes. This enabled him to ‘sell’ the concept to the larger organisation and especially the workforce. Bob contrasted this experience to a change program that he dealt with in 2010: this Fortune 500 company was commencing a $2billion change program and was advised it could be done in a 16 week period, by their advisors. It became clear in the post implementation review, that 4 to 6 of the key stakeholders admitted to not owning let alone knowing, about the project. Suffice, it to say, this program was not successful. These examples highlighted the dilemma faced by executives: when will organisations and change leaders learn and practice the essentials of managing change, successfully? A few years ago, McKinsey published a study based on 40 large scale industrial change projects. They found that the ROI of such projects was 143% when an excellent Organisational Change Management (OCM) program was part of the initiative; but only 35% when there was a poor OCM program or no program.Executive Briefing Series ‘In Conversation with…” Presented by Robertson Executive SearchContact: pgoddard@robertsonsearch.com prush@robertsonsearch.com L10/ 155 George Street, Sydney AUSTRALIA 2000
    • The 11 most successful companies in the McKinsey study had excellent OCM programs and shared the following features: * Senior and middle managers and frontline employees were all involved; * Everyones responsibilities were clear; * Reasons for the project were understood and accepted throughout the organisation. “Change management or transformation is all about and around people – not just systems or the next great methodology (which assists with program management but is not about the process of managing change).” What are the stages of transformation? Bob spoke about stages of transformation and where change management fits within project life cycle or transformation program and made the point that change management is not a ‘nice to have’ but a must have to avoid failure. The three stages of transformation that he highlighted were: 1. Positioning the strategy defines the new business model and operations 2. Realisation implements changes across people, process and technologyExecutive Briefing Series ‘In Conversation with…” Presented by Robertson Executive SearchContact: pgoddard@robertsonsearch.com prush@robertsonsearch.com L10/ 155 George Street, Sydney AUSTRALIA 2000
    • 3. Transition migrates customers and operations from the old to new order 1. Positioning 3. Reta Wholesal Custo mer Transition CustomerService Products Ch an nels Targ et Service Channels Target Customer Relationship Data Quality Customer Business Business Marketin g Marketing Customer Value Value Pro po sitionModel Strategy Communications Migration Data Migration Bund ling & Proposition Pricin g Core Bundling & Core Cap abilities Partn Pricing ers / Capabilities Partners Supp liers / Satisfaction Suppliers Governance Program Transformation Business Representation Management Management Architecture / Design Vendor Order Authority Management Leadership Provisioning Campaign Billing & Motivation Structure Receivables Process Organisational Sales Transformation Customer Ticketing Roles / ResponsibilitiesChange Culture Problem CRM Service Billing / Communications Monitoring Website / Collections Portal NextGen HR, AR, GL Order Systems Management Workforce Inventory Infrastructure 2. Realisation Management The diagram above illustrates how transformation management is essential in: 1. the positioning of the business strategy with all stakeholders; 2. ensuring that there is a cohesive and transparent strategy to manage this change 3. how to transition to customer migration. What are the risks involved with change? Bob went on to discuss the risks involved with change: 1. Leaders assume the organisation is ready for change. 2. Not enough people know the business reasons for the change. 3. Top and middle management do not support the change. 4. The change is developed without input from those whom it affects. This problem is compounded by inadequate information sharing before, during and after the change.Executive Briefing Series ‘In Conversation with…” Presented by Robertson Executive SearchContact: pgoddard@robertsonsearch.com prush@robertsonsearch.com L10/ 155 George Street, Sydney AUSTRALIA 2000
    • 5. Managers’ and employees’ job roles, accountabilities and performance metrics define and reward the “old” way of conducting business. 6. Employees lack or do not receive the knowledge and skills to make the change. 7. Leaders do not budget resources to help avoid the first six risks. What are the critical success factors? 1. Organisation & Governance  Transformation Program outcomes should be aligned to strategic objectives and executive performance metrics  Executive leadership and commitment to Transformation Program is critical  Strong stakeholder engagement  Balancing innovation and risk against strategic objectives 2. Change & Communication  Effective, consistent and timely communication at all levels of the organisation  Ensure a comprehensive change management program to embed the Transformation into the organisation  Embed a culture of continuous improvement that continues post Transformation Program 3. PeopleExecutive Briefing Series ‘In Conversation with…” Presented by Robertson Executive SearchContact: pgoddard@robertsonsearch.com prush@robertsonsearch.com L10/ 155 George Street, Sydney AUSTRALIA 2000
    •  Acquire and / or leverage best possible available expertise  Leverage vendor capabilities  Integration of existing suppliers (if relevant) into the Transformation Programme 4. Finance  Sufficient budget via the submission of a successful business case, to allow delivery  Iterative Financial and Statistical Analysis  Articulate benefits from Transformation Program and track through to realization 5. Approach  A robust and empowered governance, to ensure that the program delivers on time, to cost and quality  Sustained support from the Executive Stakeholders  Robust risk management 6. Information  Ensure metrics are specific, measurable, achievable, realistic and timely  Ensure metrics are accessible Why transformation projects fail? Bob spoke extensively about this topic and out lines the following errors and model:Executive Briefing Series ‘In Conversation with…” Presented by Robertson Executive SearchContact: pgoddard@robertsonsearch.com prush@robertsonsearch.com L10/ 155 George Street, Sydney AUSTRALIA 2000
    • Error #1: Not establishing a great enough sense of urgency Error #2: Not creating a powerful enough guiding coalition Error #3: Lacking a vision Error #4: Under communicating the vision by a factor of ten Error #5: Not removing obstacles to the new vision Error #6: Not systematically planning for and creating short term wins Error #7: Declaring victory too soon Error #8: Not anchoring changes in the corporations culture The ‘Australian’ Factor Bob further highlighted the ‘Australian’ factor. In his experience there is a greater degree of complexity and depth in the supply chain and management thinking in Australia, which change initiators do not account for.Executive Briefing Series ‘In Conversation with…” Presented by Robertson Executive SearchContact: pgoddard@robertsonsearch.com prush@robertsonsearch.com L10/ 155 George Street, Sydney AUSTRALIA 2000
    • It would appear that there are more complex business planning systems in Australia compared to other geographies, as we ‘play high and low’. We are more diversified and also more regulated. Australian demographics mean that we often have to outsource or import talent, which in itself modifies how organisations approach change. We are a multicultural workforce and this reflects in how we approach change. A case in point, as asserted by the group, was that there have to be more women in IT and especially in leadership roles. He commented that he believed that women add an extra dimension in stakeholder and people management in large scale transformation projects. The Australian experience in that there are many women in change communications but not enough being nurtured by functions like Finance and IT, to make a significant difference. Change encompasses the organisation, but it is often the Finance and IT functions that form the basis of internal operational excellence. The female diversity aspect in these areas needs to be improved. Bob concluded that success depended on managing these risk factors and successfully accounting for the ‘Australian’ factor. Conclusion The CIO and their teams need to become a driver of business rather than a cost centre.Executive Briefing Series ‘In Conversation with…” Presented by Robertson Executive SearchContact: pgoddard@robertsonsearch.com prush@robertsonsearch.com L10/ 155 George Street, Sydney AUSTRALIA 2000
    • There was significant consensus that transformation programs work best when there is the ‘smell of death’ hovering over the organisation – change or die. The people who design transformation roadmaps are too smart ie: “it doesn’t matter what I know, it is what can I get my organisation to behave like it knows”, that counts. Change management isn’t just what you do after you’ve planned out your transformation ... it needs to be built into the thinking as an input or even a constraint to the aspiration. Underlining this was the realisation that change from ground up is key if organisations are to streamline for efficiency and deliver value.Executive Briefing Series ‘In Conversation with…” Presented by Robertson Executive SearchContact: pgoddard@robertsonsearch.com prush@robertsonsearch.com L10/ 155 George Street, Sydney AUSTRALIA 2000
    • AttendeesCompany Attendee TitleAPN Tim Catley CIOBearingPoint Bill Katsaros PartnerBearingPoint Bob Hennessy CEODHS Steve Sloan DirectorMacquarie David Reeve CIODeloitte David Spreadbury DirectorConsultant Frank Ruscio ConsultantTNT Express Gary Smith ICS Director Asia PacificGrainCorp Glenn Mason CIOAssociate Partner Karsten Hansen AssociatePartner Paul Rush PartnerRobertson Executive Peter Goddard Managing PartnerSearchExecutive Briefing Series ‘In Conversation with…” Presented by Robertson Executive SearchContact: pgoddard@robertsonsearch.com prush@robertsonsearch.com L10/ 155 George Street, Sydney AUSTRALIA 2000