Leaders of changeCompanies prepare for a stronger futureA report from the Economist Intelligence Unitsponsored by
Leaders of change                                                                         Companies prepare for a stronger...
Leaders of change    Companies prepare for a stronger future    Introduction    T   he focus of change management has shif...
Leaders of change                                                                             Companies prepare for a stro...
Leaders of change    Companies prepare for a stronger future    What are the main forces driving change at your company?  ...
Leaders of change                                                                        Companies prepare for a stronger ...
Leaders of change    Companies prepare for a stronger future    Sales and marketing function is in the    front line of ch...
Leaders of change                                                                                                        C...
Leaders of change    Companies prepare for a stronger future    different. Growth is largely occurring in less-developed e...
Leaders of change                                                                                          Companies prepa...
Leaders of change     Companies prepare for a stronger future     In your view, approximately what proportion of change in...
Leaders of change                                                                          Companies prepare for a stronge...
Leaders of change     Companies prepare for a stronger future      Change management in practice: a focus                 ...
Leaders of change                                                                                        Companies prepare...
Leaders of change     Companies prepare for a stronger future     Conclusion     T  he global economy is always evolving a...
Leaders of change         Appendix                                                                                        ...
Appendix         Leaders of changeSurvey results   Companies prepare for a stronger future                 For the change ...
Leaders of change              Appendix                                                                                   ...
Appendix         Leaders of changeSurvey results   Companies prepare for a stronger future                 What is your co...
Whilst every effort has been taken to verify the accuracyof this information, neither The Economist IntelligenceUnit Ltd. ...
LONDON26 Red Lion SquareLondonWC1R 4HQUnited KingdomTel: (44.20) 7576 8000Fax: (44.20) 7576 8476E-mail: london@eiu.comNEW ...
Upcoming SlideShare
Loading in …5
×

Dean B Nelson KKR Celerant Leaders of Change

774 views

Published on

Dean B Nelson was among the 288 senior executives who participated in this change management survey orchestrated by the Economist Intelligence Unit

Published in: Business
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
774
On SlideShare
0
From Embeds
0
Number of Embeds
2
Actions
Shares
0
Downloads
7
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Dean B Nelson KKR Celerant Leaders of Change

  1. 1. Leaders of changeCompanies prepare for a stronger futureA report from the Economist Intelligence Unitsponsored by
  2. 2. Leaders of change Companies prepare for a stronger futurePrefaceLeaders of change: Companies prepare for a stronger future is an Economist Intelligence Unit report,sponsored by Celerant Consulting. The Economist Intelligence Unit conducted the survey and analysis andwrote the report. The findings and views expressed in the report do not necessarily reflect the views of thesponsor. The report’s quantitative findings come from a survey of 288 senior executives, conducted in November2010. The Economist Intelligence Unit’s editorial team designed the survey. Paul Kielstra was the authorof the report and Gilda Stahl was the editor. Mike Kenny was responsible for the design. To supplement the quantitative survey results, the Economist Intelligence Unit conducted in-depthinterviews with relevant experts. We would like to thank all interviewees for their time and insights.January 2011 About the survey were in senior management. Respondents hailed from North America (44%), Western Europe (40%) and Latin America (16%). Survey participants came A total of 288 senior executives participated in the from a wide range of industries, with just over 75% change management survey, which was conducted from organisations with annual revenue greater than in November 2010. Of those who responded, 42% US$1bn. For more details on the survey sample and were C-level executives or above and the remainder results, see the appendix of this study.© Economist Intelligence Unit Limited 2011 1
  3. 3. Leaders of change Companies prepare for a stronger future Introduction T he focus of change management has shifted, according to a survey conducted by the Economist Intelligence Unit and sponsored by Celerant Consulting. Although companies remain, as always, cost conscious, they are putting much more emphasis on growing market share and preparing for the future. Similarly, organisations are increasingly devoting their attention to the sales and marketing functions. This further reflects the shift in emphasis towards growth and the future and away from cost cutting. Apparently, executives are leaving the preoccupations of surviving the downturn behind. Yet companies are still, all too often, unable to execute change. The responsibility inevitably resides with their leaders.2 © Economist Intelligence Unit Limited 2011
  4. 4. Leaders of change Companies prepare for a stronger futureLooking to the futureA lthough downside risks remain, the world’s big economies appear to have returned to growth, albeit slowly. The Economist Intelligence Unit forecasts that GDP in North America will increase annually byaround 2% in real terms and in Western Europe by a little less than that. The engines of growth, however,will now be in the developing world: China and India should average annual real GDP growth of over 8% inthe next few years, and Latin America should average around 4% per year.Contraction and recovery: actual and estimated GDP growth, 2006-14(%) North America Western Europe Latin America China India1512 9 6 3 0-3-6 2006 2007 2008 2009 2010 2011 2012 2013 2014 Source: Economist Intelligence Unit, Global Forecast. Meanwhile, companies are adjusting to the new landscape, moving beyond the emphasis on survivalthat dominated considerations during the economic downturn. This does not mean returning to strategiesthat worked in earlier, better times; the world has changed too much. Instead, the three main goals ofcorporate change initiatives over the next year—according to respondents to a survey conducted by theEconomist Intelligence Unit and sponsored by Celerant Consulting—are increasing revenue (cited by55%), preparing the organisation for the future (52%) and cost reduction (50%).© Economist Intelligence Unit Limited 2011 3
  5. 5. Leaders of change Companies prepare for a stronger future What are the main forces driving change at your company? (% respondents) Consumer goods Energy & natural resources Healthcare, pharmaceuticals & biotechnology Competitive/cost pressures 56 63 46 Customer demand (eg, for better quality, service, different products) 44 34 21 Regulation 10 31 31 Desire to increase market share 51 26 33 Merger or acquisition 12 14 36 Exploiting emerging market opportunities (sourcing and sales) 24 3 18 Investor expectations 17 23 26 Reducing complexity within company 37 17 26 Change for the sake of change 2 0 0 Sustainability/green initiatives 5 9 5 Reduction of headcount 7 3 13 Source: Economist Intelligence Unit survey, November 2010. The overall survey findings represent a discernable shift from the responses to this question in two previous surveys conducted by the Economist Intelligence Unit and sponsored by Celerant, where cost concerns dominated. Last year, for example, 66% of respondents cited cost reduction as the primary goal of change initiatives, while preparing for the future (46%) and increasing revenue (37%) lagged behind. As Rosabeth Kanter, Ernest L. Arbuckle Professor of Business Administration at Harvard Business School and author of Supercorp: How vanguard companies create innovation, profit, growth and social good, remarks, “Change management activities definitely follow the economic cycle. There is a great deal of interest in tightening processes in leaner times. When that runs its course, companies start focusing on growth.” In this year’s survey, the perennial challenge of the overall competitive and cost environment remains by far the leading external driver of change (60%). However, customer demand (36%) comes in second, followed closely by a desire to increase market share (34%). The last two findings strongly indicate a renewed focus on sales and growth, especially in certain sectors. In the consumer goods industry, the drive to grow market share (51%) and customer demand (44%) are cited nearly as often as the competitive and cost environment (56%).4 © Economist Intelligence Unit Limited 2011
  6. 6. Leaders of change Companies prepare for a stronger future According to Dean Nelson, founder of KKR Capstone, “Most companies have recently focused change “Down markets aremanagement on cost”. To improve further, “they need to focus some of their resources on growth”. Down ideally the bestmarkets, he adds, are ideally the best times to engage in growth-related change, because they experience times to engagethe biggest shifts in market share. in growth-related Although the emphasis on market growth and the future is increasing in line with the economic cycle, change, becauseit is important not to exaggerate the shift. This year’s survey results suggest a different emphasis, rather they experiencethan a sea change in where firms are focusing their change efforts. One-half of companies surveyed still the biggest shiftssee the reduction of costs as a primary aim. Ultimately, notes Robert Tartaglia, chief operating officer in market share.”(COO) of Allianz Global Corporate & Specialty, a Munich-based large corporate and specialty insurer, Dean Nelson, founder of KKR Capstone“Change is driven by the needs of the company,” not some “initiative du jour”. At the moment, for many,those needs relate increasingly to the future.© Economist Intelligence Unit Limited 2011 5
  7. 7. Leaders of change Companies prepare for a stronger future Sales and marketing function is in the front line of change T he survey underscores the fact that the focus of change management programmes varies by industry. For example, a leading focus for chemicals firms in the last year has been the supply chain (cited by 45% of respondents from the sector). In contrast, the supply chain was the focus of change management for only 17% of energy and natural resources companies, for which the most common focus of change programmes has been finance (31%). Overall, though, sales and marketing was the most common function to experience change in the last year (41%), coming in first in every region polled and at or near the top for every industry. For manufacturers the figure hit 60%. In the previous year’s survey (using a different methodology), we found that overall sales and marketing experienced significant change, but on a par with procurement, information technology (IT) and general management, and behind finance. This year’s focus on change in the sales and marketing function further reflects the shift in emphasis towards growth and the future and Which areas of your organisation have been the focus of change management initiatives in the last year? (% respondents) Sales & marketing 41 Supply chain/procurement 26 IT 24 R&D/innovation 22 Finance 20 Human resources 15 Customer service 14 The company as a whole in an overarching change initiative 14 Asset optimisation 13 Legal & compliance 10 Senior management as a whole within the company 8 None 1 Don’t know 1 Source: Economist Intelligence Unit survey, November 2010.6 © Economist Intelligence Unit Limited 2011
  8. 8. Leaders of change Companies prepare for a stronger futureWhich areas of your organisation have been the focus of change management initiatives in the last year?(% respondents) Consumer goods Energy & natural resources Healthcare, pharmaceuticals & biotechnologySales & marketing 46 29 41Human resources 12 20 13IT 32 23 15Finance 17 31 18Legal & compliance 5 9 18Asset optimisation 15 9 5R&D/innovation 24 17 36Supply chain/procurement 37 17 23Customer service0 20 5Senior management as a whole within the company 2 14 10The company as a whole in an overarching change initiative 17 9 18None000Don’t know 200 Source: Economist Intelligence Unit survey, November 2010.away from cost cutting. Professor Kanter says, “Marketing always leads growth. You can’t manufacturemore if you are not attracting new customers. So, marketing expenditure goes up when aiming for top-line growth.” A function that interacts with ever-shifting markets and consumer demands will inevitably attract alarge number of change programmes. For example, Scott Wicker, vice-president, sustainability, at UPS,an international shipping and logistics business, notes that as customers have become increasinglyinterested in carbon issues, the company has been training and educating its salesforce in how to use itsemission-reduction record and sustainability performance as a sales draw. “We realised that we had anadvantage and needed to sell it,” he says. “Sales and marketing is being affected the most.” Sales and marketing need to recover from deep budget cuts implemented during the economicdownturn—especially in North America and Western Europe, where the declines in spending weresubstantial. Many companies, though, have been changing the sales/marketing function rather thansimply restoring previous budgets, because the markets where they are selling are now substantially© Economist Intelligence Unit Limited 2011 7
  9. 9. Leaders of change Companies prepare for a stronger future different. Growth is largely occurring in less-developed economies and these require different marketing approaches. With evolving communication channels, such as social networking technology, businesses would have to adjust rapidly anyway. Two years of cutbacks only make the need for some companies to act more pressing. Mr Nelson explains, “The sales and marketing function is a higher-return place to implement real change than management on the cost side. The customer base has changed; the world has changed. People realise that they need to change their sales and marketing approach.” Broad organisational retooling holds some advantages over a narrower focus on a single function, however important. According to the survey findings, companies that have not engaged in change to the sales/marketing function most commonly implemented initiatives that addressed the company as a whole (24%). Professor Kanter points out that sales strength is less of an issue than an ability to innovate across the company and in product offerings. “In the long run”, she says, “you need to be investing in constantly renewing products and services. Innovation is the only way to have sustainable growth.” Larger companies, in particular, are addressing the problem of complexity. For those businesses with over US$5bn in annual sales, simplification is the second-biggest aim of change. Such change is, in Professor Kanter’s words, “an exercise that goes on periodically”. Large organisations add on layers and roles—particularly in good times—and then need to shed them. Mr Tartaglia of Allianz says, “I’ve yet to embark on a change initiative or project where one of the ultimate objectives is not the reduction of complexity”, because of the costs that it brings. Complexity reduction can have multiple advantages. A programme at P&G, a global consumer-products company, to simplify its European distribution system, notes Peter White, its director for global sustainability, decreased carbon emissions and costs.8 © Economist Intelligence Unit Limited 2011
  10. 10. Leaders of change Companies prepare for a stronger future‘A’ for effort, but ‘E’ for execution?A s companies make their strategic choices about how best to change in order to face current and future challenges, change programmes are consuming ever more corporate resources. Sixty-three percentof survey respondents report that more senior executive time was devoted to change managementinitiatives over the past year, against just 7% noting a decline. The equivalent figures for increasedspending are 47% and 11%. Nevertheless, most companies are still remarkably unsuccessful at implementing change. Respondentssay that on average only 56% of change initiatives are successful. This is no surprise to Allianz’s MrTartaglia. Surveying the corporate world as a whole, he sees “a lot more experienced people out there anda better understanding of best practice, but I can’t say I have seen any empirical evidence that companiesare doing better [at change management]”.On average, to what extent…(% respondents) …have the resources spent on your …has the amount of senior executive time spent organisation’s most significant change on your organisation’s most significant change initiatives altered over the past 12 months? initiatives altered over the past 12 months?Increased greatly 10 21Increased 37 42Stayed the same 38 27Decreased 9 6Decreased greatly 2 1Don’t know 4 3 Source: Economist Intelligence Unit survey, November 2010.© Economist Intelligence Unit Limited 2011 9
  11. 11. Leaders of change Companies prepare for a stronger future In your view, approximately what proportion of change initiatives has been successful at your organisation over the past five years? (% respondents) Few 13 Around one-quarter 10 Around half 36 Around three-quarters 11 Most or all 27 None 0 Don’t know 3 Source: Economist Intelligence Unit survey, November 2010. Any reassurance that the low success rate might give to executives about their own company’s failings is false. KKR’s Mr Nelson says, “If you are not getting better at change management, you are probably becoming irrelevant.” If anything, the shifting focus of change is likely to make some elements of change harder—especially leadership. Although change management literature often discusses the processes of change divorced from the content, what is being changed matters. Mr Nelson notes, “Where people struggle is when the nature of what they are trying to change changes a fair amount. They may have been very good on change related to costs, but it might be hard for them to change sales or product development.” Professor Kanter adds that such shifts present a leadership challenge: “It is very different to lead people to engage in innovation than encouraging people to find efficiencies.”10 © Economist Intelligence Unit Limited 2011
  12. 12. Leaders of change Companies prepare for a stronger futureWhere the buck stops: a challenge for leadersT he symptoms of leadership difficulties do not always manifest themselves at the top of the company. Survey respondents cite middle management (38%) as the employment level where bottlenecks occur inchange initiatives, well above senior management (26%) and the C-suite (5%). Significant variations existin individual industries: for energy and natural resources, around one-quarter of respondents cite seniormanagement, middle management, line management and front-line workers as the most likely obstacles,while in the healthcare sector senior managers (31%) lead middle management (28%).In your view, which group of employees presents the greatest bottleneck to change management initiatives?(% respondents)Middle management 38Senior management 26Supervisors/line managers 19Front-line workers/operations 13C-suite 5 Source: Economist Intelligence Unit survey, November 2010. This finding requires a caveat: all of the survey participants were at the senior management levelor above and leaders at some companies may be reluctant to acknowledge their own shortcomings. OfC-level survey respondents at companies where a change initiative has failed in the last year, 36% citeda poor plan as the single biggest cause of the problem. Only 17% blamed a lack of senior managementcommitment, almost as many as pointed to employee resistance (15%). For less senior respondents,though, 28% blamed a poor plan, but 25% cited lack of senior management commitment, and just 10%mentioned employee resistance. Moreover, at those companies where successful change initiatives arefew, survey respondents indicated that senior management created the biggest bottlenecks (42%), ratherthan middle managers (28%). They also named lack of senior management commitment as the biggest 1. Malcolm Higgs, Deborah Rowland, “Emperors withbarrier to change (40%), more than twice as often as other respondents (19%). This is consistent with clothes on: The role of self-a recent article in The Journal of Change Management1, which found that corporate “leaders’ ‘blindness’ awareness in developing effective changeto organisational systems and/or a focus on their own ego needs led them into a range of ‘traps’ that leadership”, Decemberseriously damaged the success of change interventions”. 2010.© Economist Intelligence Unit Limited 2011 11
  13. 13. Leaders of change Companies prepare for a stronger future Change management in practice: a focus ventures in which the benefits are partly intangible. on sustainability Mr Wicker therefore stresses the need to blend environmental with financial gains clearly, as both are a part of sustainability. Similarly, Dr White says, “You need a clear line of sight for sustainability to the The requirements of successful change management company’s purpose.” This ideally should include social are often described in broad terms. The details, and environmental, as well as financial elements, and however, also matter, and invariably differ from field P&G changed its formal statement of purpose to do so. to field. For example, the integration of sustainability The strong link between sustainability and efficiency into companies in recent years has involved substantial frequently helps here as well. change efforts. The experience of P&G and UPS Planning: Effective change requires a good illustrates the process of applying broad rules in roadmap, including clear delineations of responsibility particular circumstances. and steps, preferably with initial easy wins to boost Leadership and communication to create a morale and momentum. This is as true in sustainability sense of urgency: Successful change requires a as other fields, but those working in this area face widespread belief within the organisation that action particular complications. Mr Wicker notes that is necessary. This requires a consistent message from initiatives tend to involve multiple departments senior executives—otherwise employees will assume and sometimes even external stakeholders such as that the issue is not important within the business. communities or non-governmental organisations UPS and P&G start their sustainability efforts with (NGOs). Co-ordinated planning and execution are an unambiguous commitment from the CEO and the therefore typically more difficult than for initiatives Board. Both also have extensive internal educational relating to single departments. and communication efforts to explain the concept. Selecting the appropriate metrics for success may So far, this does not vary noticeably from the general not be as straightforward as initiatives focused on template for change. For companies seeking to become money saved, or a company might not even measure more sustainable, though, success does not depend so them before a given initiative begins. The accurate much on winning people over to individual initiatives as measurement of carbon emissions related to a given convincing them of the need to embrace sustainability activity, for example, can be highly complex. Yet more broadly. Here developments in the outside world such measurement can provide additional business certainly help. UPS vice-president, sustainability, opportunities: UPS, for example, finds it valuable to Scott Wicker, says that increasing awareness of climate be able to give customers information related to the change has made it far easier to win hearts and minds. carbon produced in their shipments. “The emergence of climate change as a business issue is Focus of change: Although in parts of the business driving sustainability,” he notes. the focus of changes has varied with the economic Yet P&G’s Dr White points out that sustainability cycle, sustainability provides an example of one that can be managed in terms of corporate behaviour. This has not. It certainly could have fluctuated between approach requires greater corporate change, but once concentrating on efficiency initiatives that reduce cost employees have been won over to its logic, these flow and those that focus on preparation for the future. Yet more easily. Dr White says that the downturn and recovery brought Building support for particular initiatives: A “no real change” to the balance between these two. sense of urgency must be converted into a willingness Similarly, Lynnette McIntire, who heads sustainability for the company to provide resources to any given communication at UPS, says that recently, “We’ve not programme. With companies carefully shepherding been shifting efforts from cost cutting to opportunity; resources, it can be difficult to advocate sustainability it is more of everything.”12 © Economist Intelligence Unit Limited 2011
  14. 14. Leaders of change Companies prepare for a stronger futureFor the change initiatives in your organisation that did not succeed in the past 12 months, what was the single “Powerlessnessmost important factor in determining their failure?(% respondents) corrupts. People C-suite non-C-suite who are powerlessLack of clearly defined and/or achievable milestones & objectives to measure progress 36 and hemmed in 28Lack of commitment by senior management by rules become 17 25 excessivelyPoor communication territorial.” 14 16 Rosabeth Kanter, HarvardEmployee resistance Business School 15 10Insufficient funding 3 7Other 7 7Don’t know 8 7 Source: Economist Intelligence Unit survey, November 2010. That said, middle management’s reputation is not purely accidental. Professor Kanter believes thatthe finding “definitely rings true”. The reluctance of middle management to embrace change initiatives isunderstandable. Programmes imposed from above can radically shift middle managers’ job descriptions—even their job security. Middle managers also frequently face multiple demands—including for increasedprofits—while being told to find ways to give practical effect to visions of change ordered from above. MrTartaglia acknowledges the problem, but lays much of the blame for this behaviour elsewhere: “Middlemanagers are critical, but it has to start from the top.” Professor Kanter adds that resistance to imposedchange is predictable, especially where it is threatening. “Powerlessness corrupts,” she says. “People whoare powerless and hemmed in by rules become excessively territorial.” Poor communication is a particular problem. Mr Nelson explains that senior executives can forget that,whereas they have been involved in 30 to 40 conversations relating to an initiative before launching it,middle managers may be ill-prepared. “If senior people say that managers need to be, for example, moreinnovative and think that this is enough to get people to act differently, then they are wrong,” he says.© Economist Intelligence Unit Limited 2011 13
  15. 15. Leaders of change Companies prepare for a stronger future Conclusion T he global economy is always evolving and companies need in turn to adjust. Businesses, however, are simply not that good at change—failing nearly half the time, according to the Economist Intelligence Unit survey. As this study shows, getting the most out of change initiatives requires going beyond the basics of leadership commitment, good planning and communication. The following principles emerge. l Treat change programmes as a key, but limited strategic resource. In practice there are limits to how much change a company can absorb—on average survey companies make just 3.6 change initiatives annually. Competitors will be looking at other areas than just cost cutting, including trying to grab some of your market share. Aligning the focus of change with the most pressing strategic priorities has therefore become more important than before. l In preparing for the future, consider whether your sales function needs an overhaul or you need to address an overarching company-wide issue. The most popular area for change programmes over the past year has been sales/marketing. Other businesses, meanwhile, are making a strategic choice to look at company-wide change such as complexity reduction. The key consideration is where change will best prepare the firm for the new competitive environment being shaped by the multi- speed global recovery. l Sweat the details. The broad principles of change management may vary little, but the details vary in ways that matter. As executives opt for new goals and locations for change programmes, they will need to understand the resulting specific requirements of success. These will likely differ from the requirements of changes in the depths of the downturn. Cutting costs, encouraging growth and promoting sustainability need distinct playbooks. l Treat bottlenecks as a symptom not a disease. If middle management is a difficult bottleneck to change, then leadership needs to improve. Bring middle managers into the change process earlier, have them work on the planning, and use them as champions of change. Leadership is not about telling people what to do, but getting them to do it. If more senior employees are the problem, then leadership is dysfunctional and needs to address its conflicts quickly. “Change management”, says Professor Kanter, “is a very broad term for a lot of different activities that are all a part of leadership”. Such leadership will, as ever, be essential as business prepares itself for the future.14 © Economist Intelligence Unit Limited 2011
  16. 16. Leaders of change Appendix Companies prepare for a stronger future Survey resultsAppendix: Survey resultsPercentages may not add to 100% owing to rounding or the ability of respondents to choose multiple responses.What will be the main motivations for your organisation’s How many change management initiatives do you believe yourchange management initiatives over the next 12 months? organisation will launch over the next 12 months?Select up to three. (% respondents)(% respondents) OneIncreasing revenue 15 55 TwoPreparing the organisation for future challenges 24 52 ThreeReducing costs 18 50 FourIncreasing market share 7 27 Five or moreBetter engagement of people (eg, improved communication & involvement) 24 26 NoneNew organisation structure with new roles 3 22 Don’t knowAcquisition/divestiture/merger 9 19Cultural change 11Other In your view, what proportion of change initiatives has been 5 successful at your organisation over the past five years? (% respondents) FewHow many change management initiatives do you estimate 13your organisation has launched in the last 12 months? Around one-quarter(% respondents) 10 Around halfOne 36 13 Around three-quartersTwo 11 24 Most or allThree 27 23 NoneFour 0 6 Don’t knowFive or more 3 24None 2Don’t know 8© Economist Intelligence Unit Limited 2011 15
  17. 17. Appendix Leaders of changeSurvey results Companies prepare for a stronger future For the change initiatives in your organisation that did not On average, to what extent have the resources spent on your succeed in the past 12 months, what was the single most organisation’s most significant change initiatives altered over important factor in determining their failure? the past 12 months? (% respondents) (% respondents) Lack of clearly defined and/or achievable milestones Increased greatly & objectives to measure progress 10 31 Increased Lack of commitment by senior management 37 21 Stayed the same Poor communication 38 15 Decreased Employee resistance 9 12 Decreased greatly Insufficient funding 2 5 Don’t know Other 4 7 Don’t know 7 On average, to what extent has the amount of senior executive time spent on your organisation’s most significant change initiatives altered over the past 12 months? What is the most important measure in determining whether (% respondents) a change programme has been successful in your organisation? Increased greatly (% respondents) 21 Increased Behaviour change in the organisation 42 35 Stayed the same Increased profitability 27 29 Decreased Customer satisfaction 6 10 Decreased greatly Savings delivered 1 9 Don’t know Increased market share 3 9 Employee satisfaction / employee turnover 2 Other In your view, which group of employees presents the greatest 4 bottleneck to change management initiatives? Don’t know (% respondents) 2 Middle management 38 Senior management 26 Supervisors/line managers 19 Front-line workers/operations 13 C-suite 516 © Economist Intelligence Unit Limited 2011
  18. 18. Leaders of change Appendix Companies prepare for a stronger future Survey resultsWhich areas of your organisation have been the focus of In which country are you personally located?change management initiatives in the last year? (% respondents)Select up to three.(% respondents) US 39Sales & marketing UK, Germany 41 8Supply chain/procurement Belgium, Canada, Brazil 26 5IT Italy, Mexico 24 4R&D/innovation Switzerland, Netherlands, Portugal 22 3Finance Colombia 20 2Human resources Chile, France. Sweden, Ireland, Turkey, Denmark, Finland, 15 Norway, Peru, PolandCustomer service 1 14The company as a whole in an overarching change initiative 14Asset optimisation What is your primary industry? 13 (% respondents)Legal & compliance 10 ManufacturingSenior management as a whole within the company 15 8 Consumer goodsNone 141 Healthcare, pharmaceuticals & biotechnologyDon’t know 141 Energy & natural resources 12 Chemicals 11What are the main forces driving change at your company? Financial servicesSelect up to three. 7(% respondents) Professional services 6Competitive/cost pressures Retailing 60 4Customer demand (eg, for better quality, service, different products) Automotive 36 3Desire to increase market share Construction & real estate 34 2Reducing complexity within company Education 27 2Investor expectations IT & technology 22 2Merger or acquisition Telecommunications 20 2Regulation Transportation, travel & tourism 19 2Exploiting emerging market opportunities (sourcing & sales) Agriculture & agribusiness 19 2Reduction of headcount Entertainment, media & publishing 11 1Sustainability/green initiatives Government/Public sector 6 1Change for the sake of change Aerospace/Defence1 1© Economist Intelligence Unit Limited 2011 17
  19. 19. Appendix Leaders of changeSurvey results Companies prepare for a stronger future What is your company’s annual global revenue in US dollars? What are your main functional roles? Choose up to three. (% respondents) (% respondents) Finance 37 $250m to $500m 3 Strategy & business development $500m to $1bn 22 32 $1bn to $5bn 33 General management 28 $5bn to $10bn 14 Marketing & sales $10bn or more 28 16 Risk 12 IT 11 Operations & production 9 R&D 6 Supply-chain management Which of the following best describes your title? 6 (% respondents) Customer service 6 Board member Procurement 3 5 CEO/President/Managing director Human resources 6 4 CFO/Treasurer/Comptroller Legal 20 3 CIO/Technology director Information & research 4 2 Other C-level executive Other 9 5 SVP/VP/Director 58 In which region are you personally based? (% respondents) North America 44 Western Europe 42 Latin America 1418 © Economist Intelligence Unit Limited 2011
  20. 20. Whilst every effort has been taken to verify the accuracyof this information, neither The Economist IntelligenceUnit Ltd. nor the sponsors of this report can accept any Cover: Shutterstockresponsibility or liability for reliance by any person onthis white paper or any of the information, opinions orconclusions set out in the white paper.
  21. 21. LONDON26 Red Lion SquareLondonWC1R 4HQUnited KingdomTel: (44.20) 7576 8000Fax: (44.20) 7576 8476E-mail: london@eiu.comNEW YORK750 Third Avenue5th FloorNew York, NY 10017United StatesTel: (1.212) 554 0600Fax: (1.212) 586 0248E-mail: newyork@eiu.comHONG KONG6001, Central Plaza18 Harbour RoadWanchaiHong KongTel: (852) 2585 3888Fax: (852) 2802 7638E-mail: hongkong@eiu.comGENEVABoulevard des Tranchées 161206 GenevaSwitzerlandTel: (41) 22 566 2470Fax: (41) 22 346 93 47E-mail: geneva@eiu.com

×