You Have a Transformation Strategy, but is Your Organization Part of it?
I’m sure you’ve heard of gorilla glass. It’s probably on the front of your smartphone, and its strength has saved you from a broken phone more than once.
But it’s not just you and your smartphone that gorilla glass has saved. It also saved Corning Inc.The breakthrough product is the result of a cultural transformation at the specialty glass and ceramics maker.
For Peter Volanakis, Corning’s former COO, saving Corning was all about having the right culture in place. It was a culture that allowed a product like gorilla glass to lose money for 14 years before it found its way onto more than 100 million mobile devices. Inside this issue of Insigniam Quarterly, he shares the value of a company’s culture in transformative environments and offers his three keys to transforming culture.
While the Corning story is definitely instructional and inspirational, it’s far from unique. In our decades as international consultants, we’ve seen it time and time again. A company wants a breakthrough transformation. It wants to grow, but it can’t. Its culture is holding it back.
Throughout this issue, we talk about transformations, both big and small. From Delta Airlines buying its own oil refinery to control fuel costs to the keys to a successful merger. And at the center of each of these transformations is culture. Culture is the very core of how the people in an organization think, perceive opportunities, and behave, and it either supports a transformation initiative or culture stifles it.
As the saying goes, “Culture eats strategy for lunch.” It doesn’t matter how well thought out your plans are, if all the elements of your people are not on the same page with your strategic needs, then your initiative will be for naught.
Consider the company featured on our cover, Danone. For the French food products multinational, the culture change included a whole new leadership approach, adapting its culture to emerging markets and listening to its customers. Listening not in the cliché way that we all say we listen to customers. Danone is actually bringing them into the R and D process.
That was a bold step, but it was necessary if Danone wanted to be a global player. It’s time for a hard look at where you want to be and to ask yourself if it’s your corporate culture that’s preventing your breakthrough transformation from taking
flight.
Shideh Sedgh Bina
Founding Partner, Insigniam
Editor in Chief, Insigniam Quarterly
The document provides an overview of an issue of the Insigniam Quarterly magazine. It includes summaries of articles on reinventing procurement at Carnival Corp., companies looking beyond distributors to directly serve customers, reinventing leadership at Barry-Wehmiller, and innovation in China. Other brief articles discuss smart shoes from China, the convergence of cars and computers, and Google's rebranding under its new Alphabet parent company structure.
Pizza Hut is seeking new creative ideas from agencies and may bring on another shop in addition to or instead of its current lead agency, Deutsch. This comes after Pizza Hut's recent branding initiative did not meet sales goals. The document provides demographic, psychographic, and interest data on Pizza Hut's target audiences and major competitors to help agencies develop competitive analyses, audience insights, and identify trends to address in new pitch materials.
KDG ADVERTISING'S capability deck, a brief introduction of our practices, history and case studies. KDGA offers a wide range of capabilities in Communication Strategy, Advertising, Market Planning & Development, Brand Management, Website, Social Media, Interactive Media Design, Development & Implementation.
In order to admire and acknowledge the contributions of businesswomen, the franchise universe up with the edition – The 10 Most Successful Businesswomen to Watch, 2021
This document summarizes how non-profit organizations can generate ongoing revenue by partnering with personal franchise businesses. Personal franchises allow individuals to operate low-cost home-based businesses selling branded products and services. The document profiles three personal franchise options - Send Out Cards for greeting cards, Your Travel Business for travel booking, and Market America/Shop-To-Earn for online shopping - that can provide a percentage of sales to partnered non-profits. It explains that by redirecting regular purchases through these businesses, non-profits can earn thousands of dollars in passive monthly revenue.
This document provides a summary of news and events from Great Dane Trailers in Spring 2016. It discusses the opening of a new production plant in Elysburg, Pennsylvania that will produce dry freight vans for Walmart. It also mentions the expansion of Border International Truck and Trailer Sales with a new facility in New Mexico, Great Dane's sponsorship of Truckers Against Trafficking to raise awareness of human trafficking, and the addition of Crossroads Trailer as the first dealer distribution center for Great Dane flatbeds. The document highlights Great Dane's commitment to championing customer needs through innovation, expanded products and services, and championing employee needs through training programs and creating a dynamic work environment.
The document provides an overview of an issue of the Insigniam Quarterly magazine. It includes summaries of articles on reinventing procurement at Carnival Corp., companies looking beyond distributors to directly serve customers, reinventing leadership at Barry-Wehmiller, and innovation in China. Other brief articles discuss smart shoes from China, the convergence of cars and computers, and Google's rebranding under its new Alphabet parent company structure.
Pizza Hut is seeking new creative ideas from agencies and may bring on another shop in addition to or instead of its current lead agency, Deutsch. This comes after Pizza Hut's recent branding initiative did not meet sales goals. The document provides demographic, psychographic, and interest data on Pizza Hut's target audiences and major competitors to help agencies develop competitive analyses, audience insights, and identify trends to address in new pitch materials.
KDG ADVERTISING'S capability deck, a brief introduction of our practices, history and case studies. KDGA offers a wide range of capabilities in Communication Strategy, Advertising, Market Planning & Development, Brand Management, Website, Social Media, Interactive Media Design, Development & Implementation.
In order to admire and acknowledge the contributions of businesswomen, the franchise universe up with the edition – The 10 Most Successful Businesswomen to Watch, 2021
This document summarizes how non-profit organizations can generate ongoing revenue by partnering with personal franchise businesses. Personal franchises allow individuals to operate low-cost home-based businesses selling branded products and services. The document profiles three personal franchise options - Send Out Cards for greeting cards, Your Travel Business for travel booking, and Market America/Shop-To-Earn for online shopping - that can provide a percentage of sales to partnered non-profits. It explains that by redirecting regular purchases through these businesses, non-profits can earn thousands of dollars in passive monthly revenue.
This document provides a summary of news and events from Great Dane Trailers in Spring 2016. It discusses the opening of a new production plant in Elysburg, Pennsylvania that will produce dry freight vans for Walmart. It also mentions the expansion of Border International Truck and Trailer Sales with a new facility in New Mexico, Great Dane's sponsorship of Truckers Against Trafficking to raise awareness of human trafficking, and the addition of Crossroads Trailer as the first dealer distribution center for Great Dane flatbeds. The document highlights Great Dane's commitment to championing customer needs through innovation, expanded products and services, and championing employee needs through training programs and creating a dynamic work environment.
TBWA creates brand behavior through disruptive ideas across media. With over 12,000 employees in 267 agencies across 77 countries, TBWA focuses on being one of the most creative companies in the world. TBWA is ranked in the top ten worldwide advertising agencies and was named international network of the decade by Advertising Age in 2010. TBWA is part of Omnicom Group and creates marketing solutions for global clients through its specialty divisions.
This document provides information about Bradley | Bowersett, a company that plans business meetings, events, luxury group travel, product launches, and sales performance improvement programs. Some key details:
- Bradley | Bowersett was founded in 1988 in Southern California and has worked with many large companies to connect them with audiences and increase sales.
- They believe in using proven strategies to effectively plan and produce "business building experiences" like meetings, events, and travel to help brands drive understanding and relevance.
- The document describes some of the types of experiences they have produced, including large meetings, incentive trips, private concerts and dinners, and more, to connect brands with audiences worldwide.
Ultra-Luxury Group Travel Experiences Worldwide ... for corporations, sales/marketing performance improvement programs, associations and non-profits. More than 400 successful business building experiences worldwide since 1988 with some of the world's most familiar company and association names. Contact Ed Bradley. ed@bradleybowersett.com
Pepper is an advertising agency in Trinidad and Tobago that has worked with many local companies. The document provides examples of past work Pepper has done for clients, including creating logos, print ads, websites, event planning, and more. Pepper has helped brands like Berger Paints, Grace Foods, ANSA Merchant Bank, and others launch new products, improve their marketing, and achieve their business goals through integrated advertising campaigns. Clients have provided positive testimonials about how Pepper's work has helped increase sales, drive brand awareness, and better communicate their messages.
This document is the 1998 annual report from The Limited, Inc. It contains a letter from the CEO expressing optimism about the company's future prospects due to changes made over the past 4 years to focus on building strong fashion brands. The CEO discusses bringing in new talent, formalizing brand-building processes, and holding intensive strategy meetings between divisions to leverage the power of their brands. Financial highlights are provided for Express, and the annual report concludes with an overview of the company's brand portfolio.
This magazine issue contains articles on branding, creativity, and pitching. It discusses how maintaining branding efforts during recessions can help brands perform better long-term. It recommends following the "7Ps of Branding" - Profit, Persistence, Planning, Performance, Positioning, People, and Principles. It argues against agencies pitching creative work for free, as ideas are their intellectual capital. Free pitching undermines agencies' credibility and ownership of ideas. Creativity is best achieved through a partnership where the goal is meaningful work, not just lowest cost.
Apresentações dos oradores: Philip Kotler, Pedro Guerreiro e Daniel Sá na Conferência Internacional IPAM, realizada em Aveiro no dia 16 de Novembro de 2010.
There is a fundamental disconnect between the way we build and operate our businesses and what our customers, employees, and stakeholders truly care about.
As a result, most businesses spend money on advertising and marketing that doesn’t resonate and messages and initiatives that will never connect with customers and employees.
Customers and employees have more choice than ever before and are very clear about what is important to them.
The document discusses how understanding a company's "innovation DNA" is crucial for developing effective innovation strategies. It provides examples from the author's experience innovating at Coca-Cola and Assurant. At Coca-Cola, the company's DNA of protecting the Coke brand made it difficult to innovate, while using existing marketing and distribution strengths worked better. At Assurant, the company's history of acquisitions meant investing in startups aligned better with its DNA than internal ideas. Understanding a company's inherent strengths and tendencies from its origins and evolution can help innovation leaders craft strategies that produce results with less friction.
Capital One Financial Corporation's 1999 Annual Report highlights the company's explosive growth over the past 5 years since its IPO, including doubling its customer base to 24 million and increasing revenues 512% between 1994 and 1999. The report discusses Capital One's continued focus on its information-based strategy of testing new ideas, customizing products for customers, and driving innovation to build one of the world's truly great companies with sustained financial performance and customer satisfaction. Key metrics show earnings per share and return on equity growth above 20% for the fifth consecutive year.
There are numerous companies which are effectively working upon these aspects pushing the industry ahead with great ideas and innovations. Hence in order to acknowledge their efforts, Insights success has shortlisted “The 10 Best Return On Investment Franchises, 2018”
The world is changing at a rapid pace and so is the Marketing world. And that is how we decided to come up with a MARkezine Edition which will capture the essence of things that are happening around.
The document discusses how companies can successfully reinvent themselves by managing three hidden "S curves": the basis of competition curve, capabilities curve, and talent curve. High performers begin reinventing themselves well before their current business peaks by focusing on these curves through practices like edge-centric strategy, regular changes to top leadership, and maintaining surplus talent. They also stress employees to build strength for future challenges. Managing these curves early allows companies to jump to the next stage of growth through reinvention.
Sandpaper – advice to shape your businessBen Sandman
Business development publication put together for the Australian marine industry (early 2011).
A collection of whitepaper-style articles offering branding, communications and media advice.
P&G focused on building an innovation culture throughout the entire company in order to drive consistent organic growth. Some key steps they took included:
1) Establishing the concept of "the consumer is boss" to make the consumer the central focus of all innovation efforts.
2) Integrating innovation into business strategy, planning, and budgeting processes to involve employees from all functions in innovation.
3) Designing social systems like digital interactions to directly involve consumers in co-designing innovations through rapid prototyping and feedback.
This document summarizes the key findings from a year-long social media campaign called #365Daysofgood that highlighted examples of brands doing good. Some of the top trends they identified include: brands taking action to solve problems rather than just talk about issues; allowing customers to choose which causes they support; focusing on smaller, brand-relevant issues rather than vague promises; prioritizing local communities and grassroots organizations; and repositioning corporate social responsibility efforts to engage younger generations who expect companies to consider social and environmental impacts. The document advocates that marketers can anticipate greater support for purpose-driven marketing from corporate boards and customers in the coming years.
The document outlines 18 Ps of inbound marketing, beginning with Purpose and ending with Process. It provides a brief explanation for each P, highlighting how it is an important factor for modern marketing strategies. The 18 Ps are designed as a checklist to help guide marketers and business leaders through the complex challenges of the multi-channel world.
This document provides an overview and analysis of brand leadership in the current business environment. In 3 sentences:
Brand leadership has changed significantly with the rise of social media, data analytics, and a focus on collaboration. Today's brand leaders must focus on envisioning the future, investing in people, and co-creating with consumers to stay relevant. The article discusses new approaches to brand leadership, including embracing social conversations, making corporate social responsibility strategic, and leveraging big data to provide excellent customer experiences.
This document provides an overview and analysis of brand leadership in the current business environment. In 3 sentences:
Brand leadership has changed significantly with the rise of social media, data analytics, and a focus on collaboration. Today's brand leaders must focus on envisioning the future, investing in people, gathering consumer insights, co-creating with consumers, and making corporate social responsibility a strategic priority to connect with consumers and drive business value. The article examines how brands can navigate this new landscape of leadership by sharing power, joining conversations, innovating, leading through design, and recognizing that both brands and consumers play a role in global progress.
This document provides an overview and analysis of brand leadership in the current business environment. In 3 sentences:
Brand leadership has changed significantly with the rise of social media, data collection, and a focus on collaboration. Today's brand leaders must focus on envisioning the future, investing in people, and co-creating with consumers to stay relevant. The article discusses new approaches to leadership, including opening dialogue with consumers, prioritizing design, making CSR strategic, and gaining insights from both structured and unstructured data.
TBWA creates brand behavior through disruptive ideas across media. With over 12,000 employees in 267 agencies across 77 countries, TBWA focuses on being one of the most creative companies in the world. TBWA is ranked in the top ten worldwide advertising agencies and was named international network of the decade by Advertising Age in 2010. TBWA is part of Omnicom Group and creates marketing solutions for global clients through its specialty divisions.
This document provides information about Bradley | Bowersett, a company that plans business meetings, events, luxury group travel, product launches, and sales performance improvement programs. Some key details:
- Bradley | Bowersett was founded in 1988 in Southern California and has worked with many large companies to connect them with audiences and increase sales.
- They believe in using proven strategies to effectively plan and produce "business building experiences" like meetings, events, and travel to help brands drive understanding and relevance.
- The document describes some of the types of experiences they have produced, including large meetings, incentive trips, private concerts and dinners, and more, to connect brands with audiences worldwide.
Ultra-Luxury Group Travel Experiences Worldwide ... for corporations, sales/marketing performance improvement programs, associations and non-profits. More than 400 successful business building experiences worldwide since 1988 with some of the world's most familiar company and association names. Contact Ed Bradley. ed@bradleybowersett.com
Pepper is an advertising agency in Trinidad and Tobago that has worked with many local companies. The document provides examples of past work Pepper has done for clients, including creating logos, print ads, websites, event planning, and more. Pepper has helped brands like Berger Paints, Grace Foods, ANSA Merchant Bank, and others launch new products, improve their marketing, and achieve their business goals through integrated advertising campaigns. Clients have provided positive testimonials about how Pepper's work has helped increase sales, drive brand awareness, and better communicate their messages.
This document is the 1998 annual report from The Limited, Inc. It contains a letter from the CEO expressing optimism about the company's future prospects due to changes made over the past 4 years to focus on building strong fashion brands. The CEO discusses bringing in new talent, formalizing brand-building processes, and holding intensive strategy meetings between divisions to leverage the power of their brands. Financial highlights are provided for Express, and the annual report concludes with an overview of the company's brand portfolio.
This magazine issue contains articles on branding, creativity, and pitching. It discusses how maintaining branding efforts during recessions can help brands perform better long-term. It recommends following the "7Ps of Branding" - Profit, Persistence, Planning, Performance, Positioning, People, and Principles. It argues against agencies pitching creative work for free, as ideas are their intellectual capital. Free pitching undermines agencies' credibility and ownership of ideas. Creativity is best achieved through a partnership where the goal is meaningful work, not just lowest cost.
Apresentações dos oradores: Philip Kotler, Pedro Guerreiro e Daniel Sá na Conferência Internacional IPAM, realizada em Aveiro no dia 16 de Novembro de 2010.
There is a fundamental disconnect between the way we build and operate our businesses and what our customers, employees, and stakeholders truly care about.
As a result, most businesses spend money on advertising and marketing that doesn’t resonate and messages and initiatives that will never connect with customers and employees.
Customers and employees have more choice than ever before and are very clear about what is important to them.
The document discusses how understanding a company's "innovation DNA" is crucial for developing effective innovation strategies. It provides examples from the author's experience innovating at Coca-Cola and Assurant. At Coca-Cola, the company's DNA of protecting the Coke brand made it difficult to innovate, while using existing marketing and distribution strengths worked better. At Assurant, the company's history of acquisitions meant investing in startups aligned better with its DNA than internal ideas. Understanding a company's inherent strengths and tendencies from its origins and evolution can help innovation leaders craft strategies that produce results with less friction.
Capital One Financial Corporation's 1999 Annual Report highlights the company's explosive growth over the past 5 years since its IPO, including doubling its customer base to 24 million and increasing revenues 512% between 1994 and 1999. The report discusses Capital One's continued focus on its information-based strategy of testing new ideas, customizing products for customers, and driving innovation to build one of the world's truly great companies with sustained financial performance and customer satisfaction. Key metrics show earnings per share and return on equity growth above 20% for the fifth consecutive year.
There are numerous companies which are effectively working upon these aspects pushing the industry ahead with great ideas and innovations. Hence in order to acknowledge their efforts, Insights success has shortlisted “The 10 Best Return On Investment Franchises, 2018”
The world is changing at a rapid pace and so is the Marketing world. And that is how we decided to come up with a MARkezine Edition which will capture the essence of things that are happening around.
The document discusses how companies can successfully reinvent themselves by managing three hidden "S curves": the basis of competition curve, capabilities curve, and talent curve. High performers begin reinventing themselves well before their current business peaks by focusing on these curves through practices like edge-centric strategy, regular changes to top leadership, and maintaining surplus talent. They also stress employees to build strength for future challenges. Managing these curves early allows companies to jump to the next stage of growth through reinvention.
Sandpaper – advice to shape your businessBen Sandman
Business development publication put together for the Australian marine industry (early 2011).
A collection of whitepaper-style articles offering branding, communications and media advice.
P&G focused on building an innovation culture throughout the entire company in order to drive consistent organic growth. Some key steps they took included:
1) Establishing the concept of "the consumer is boss" to make the consumer the central focus of all innovation efforts.
2) Integrating innovation into business strategy, planning, and budgeting processes to involve employees from all functions in innovation.
3) Designing social systems like digital interactions to directly involve consumers in co-designing innovations through rapid prototyping and feedback.
This document summarizes the key findings from a year-long social media campaign called #365Daysofgood that highlighted examples of brands doing good. Some of the top trends they identified include: brands taking action to solve problems rather than just talk about issues; allowing customers to choose which causes they support; focusing on smaller, brand-relevant issues rather than vague promises; prioritizing local communities and grassroots organizations; and repositioning corporate social responsibility efforts to engage younger generations who expect companies to consider social and environmental impacts. The document advocates that marketers can anticipate greater support for purpose-driven marketing from corporate boards and customers in the coming years.
The document outlines 18 Ps of inbound marketing, beginning with Purpose and ending with Process. It provides a brief explanation for each P, highlighting how it is an important factor for modern marketing strategies. The 18 Ps are designed as a checklist to help guide marketers and business leaders through the complex challenges of the multi-channel world.
This document provides an overview and analysis of brand leadership in the current business environment. In 3 sentences:
Brand leadership has changed significantly with the rise of social media, data analytics, and a focus on collaboration. Today's brand leaders must focus on envisioning the future, investing in people, and co-creating with consumers to stay relevant. The article discusses new approaches to brand leadership, including embracing social conversations, making corporate social responsibility strategic, and leveraging big data to provide excellent customer experiences.
This document provides an overview and analysis of brand leadership in the current business environment. In 3 sentences:
Brand leadership has changed significantly with the rise of social media, data analytics, and a focus on collaboration. Today's brand leaders must focus on envisioning the future, investing in people, gathering consumer insights, co-creating with consumers, and making corporate social responsibility a strategic priority to connect with consumers and drive business value. The article examines how brands can navigate this new landscape of leadership by sharing power, joining conversations, innovating, leading through design, and recognizing that both brands and consumers play a role in global progress.
This document provides an overview and analysis of brand leadership in the current business environment. In 3 sentences:
Brand leadership has changed significantly with the rise of social media, data collection, and a focus on collaboration. Today's brand leaders must focus on envisioning the future, investing in people, and co-creating with consumers to stay relevant. The article discusses new approaches to leadership, including opening dialogue with consumers, prioritizing design, making CSR strategic, and gaining insights from both structured and unstructured data.
AIMIA The Connected Consumer Conference | MashUp CX on Customer Experiencebrittneygraham16
MashUp CX is a global consultancy firm specialising in customer experience strategy and design. MashUp CX Director Nicola Mansfield was a guest speaker at AIMIA's half-day forum, 'Connected Consumer: The future of digital retail experience' in Sydney on July 15th. In this forum Nicola shared her thoughts on how retailers can be more profitable and relevant in today's omni-channel world through efficient design thinking.
The document outlines how large enterprises can adopt practices from lean startups to stay innovative and competitive. It discusses how Amgen created a new Advanced Device Technology team with a lean, startup-like approach to prioritize projects based on overall company value rather than individual product timelines. The team focuses on understanding Amgen's portfolio and delivery needs to develop technologies that drive company-wide value. The document argues that enterprises need to emulate lean startup qualities like flexibility, fast decision making, and a willingness to disrupt themselves in order to compete against newer, more agile competitors.
This document summarizes a report written by experts at Heidrick & Struggles on accelerating organizational performance. It discusses how industries are being disrupted at a faster pace due to digital innovation. It also notes that many institutions are failing to adapt to changes in the environment. The report identifies 13 factors that can either drive or impede acceleration. It also outlines four capabilities that leaders need to develop in order to mobilize, execute, and transform their organizations with agility. The document examines what differentiates high-performing organizations and provides a framework for developing an agenda to improve acceleration.
Global Groomers is a business consulting firm that provides services to help small and mid-sized businesses expand globally. It offers expat training programs, market information services, implementation guidance and cultural training. The company was originally founded as a home-based business providing expat training and assistance to local businesses expanding abroad. It is now expanding its operations and changing its legal structure to an LLC to better serve a broader range of clients seeking to grow their business internationally. Global Groomers aims to make global expansion easy for businesses by providing the tools, knowledge and support needed to navigate foreign markets successfully.
We helped Fresh Express achieve measurable ROI by developing a product traceability microsite to provide consumers information about their bag of salad by entering a product code. This increased traffic to their website by 800% within 10 days. We also helped transform their marketing by adding 40,000 newsletter subscribers and signing up 130,000 people for a sweepstakes in just 8 weeks. For Chiquita, we raised brand awareness of their targeted audience from 18% to 36% in six weeks and increased their website traffic by 700% in four weeks by developing an integrated website, CRM, social media and PR program.
This document discusses how purpose can drive companies and provides examples of companies that have successfully implemented purpose-driven strategies. It makes the following key points:
1. Companies need a clear purpose in order to create trust with stakeholders in their network and influence regulators. Leading with a strong purpose aligns partners and the industry behind common goals.
2. Employees and customers want to work for and support companies that make a positive difference in the world. Communicating and living the company's purpose attracts talent and builds loyalty.
3. To introduce purpose, companies should find their core inspiration or "spark", develop a bold vision for how the purpose will guide them, and partner with stakeholders to bring the purpose to life
The document discusses how large companies can innovate in a world that favors smaller, more nimble competitors. It outlines several trends that have shifted power away from large companies, including consumers losing trust in big brands, valuing uniqueness more, and desiring personalized interactions. It then provides recommendations for how large companies can take action, including identifying meaningful and winnable growth opportunities, developing a competitive strategy, creating complementary platforms, applying a portfolio approach to funding innovations, creating innovations that solve problems for both consumers and the business, appointing innovation champions, and recognizing innovation as an experiment.
Our world’s digital landscape is evolving faster than ever before, the only constant is change and most enterprises are struggling to adapt. In this webinar, we deep dive into Digital Transformation – the business strategy that can unlock new, better and bigger growth opportunities for your company.
Over the years we’ve noticed that even amazingly creative and unique companies can struggle with getting ideas off the ground.
Whether it’s a simple fix to an organisational chart, or a bit of nudging in the right direction to help a company to launch a product idea with an impactful return on investment (ROI). Making improvements can turn a new product dream into a reality, and we know the value in having an extra set of eyes (and hands) to help with a company’s innovation efforts.
That’s why we put together this informational guide - to share some of our experiences and help even more teams and companies to leverage their inner talents and unlock their
innovation potential.
In this guide, we’ll share some of our best tips and tricks, including how to:
> Recognise trends and how customer preferences change;
> Focus on your company strengths in order to get the most out of innovation;
> Identify and remove common obstacles to innovation;
> Build levels of innovation that come naturally and are sustained - through the innovation value pyramid; and,
> Use practical exercises to future-proof your innovation efforts.
Who this book is for
Every business needs innovation. It’s commonly associated with it’s long-term success.1 It helps a business to solve problems, save precious time and money, and set it apart from the competition so it can grow faster.
Every employee within a company can contribute to innovation, too. Whether you’re the boss of an energetic startup company, an aspiring leader or an employee at an organisation, you’ll be able to use this guide to help build innovation in your professional scenario.
We’ll use examples of all sorts of different types of businesses: from software companies, construction firms, tech businesses to self-employed consultants. Even if your unique business model is not specifically discussed, you’ll be able to apply the methods without issue.
Innovolo is an active supporter of the idea that innovation is important (dare we say - essential) for any business to thrive.
If you’re interested in knowing why (and how to do it yourself), then read on!
Bradley Pallister
The way businesses need to organize and behave has fundamentally shifted. Across industries, companies, and organizational functions, we have heard many of the world’s most innovative companies echo the same challenge: businesses must urgently embrace a more nimble and entrepreneurial approach in order to stay competitive. We call this challenge of how big companies can leverage scale while staying innovative “big entrepreneurship.” This report aims to deconstruct some of the complex challenges around big entrepreneurship and provide actionable insights for business leaders.
This report was created by Fahrenheit 212, a global innovation strategy and design firm. We define innovation strategies and develop new products, services, and experiences that create sustainable, profitable growth for our clients. We challenge the belief that innovation is inherently unreliable and have spent the last decade designing the method, building the model, and assembling the minds to make innovation a predictable driver of growth for our clients' businesses.
This document discusses the characteristics of successful scale-up companies compared to typical startups. It finds that scale-ups are more likely to have:
1) Experienced leadership, with founders having prior corporate experience and academic degrees, rather than being university dropouts.
2) Functional depth, with founders having 10,000 hours of experience in their field to develop a distinctive capability.
3) Advanced intuition, as older founders in their forties have more experience to intuit market opportunities.
Similar to Insigniam Quarterly Summer 2013 - Enterprise Transformation (20)
The best corporate legacies do not simply occur by chance. They are created by the bold and driven by the visionary. Corporate legacies shine the brightest when they transcend a single product, service or industry.
Take Apple. When the corporate giant combined a phone, a music player and the internet to make the iPhone, Steve Jobs and co. not only created a new future for themselves; they also expanded the idea of what a tech company could be and in what industries it could play. They rewrote the boundaries of what is possible. That is a true legacy.
“Without the iPhone revolution, it is hard to imagine a technology company entering the transport industry or designing a device that can steer cars around while receiving and transmitting streams of data,” John Gapper at The Financial Times wrote earlier this year.
But the sheen of a great legacy can disappear quickly if major missteps are made, drama drives headlines or executive competency is questioned. We have seen several recent examples of this, including HSBC, Wells Fargo and United Airlines. And the risk
of a legacy being tarnished is higher in today’s world of constant connection, where good news travels fast but bad news travels faster.
Samsung is another prime example. For years, the company’s legacy has been built on quality and innovation, but that legacy is in jeopardy following last year’s debacle with the Galaxy Note 7. According to the Reputation Quotient Ratings report by The Harris Poll, in 2015 Samsung was the third most-respected company among U.S. consumers. In the 2017 poll, its ranking fell more than 40 points. For better or worse, corporate legacies are not stagnant—they shift over time with every move leaders make. You will always have an impact.
This issue is full of stories from executives about how they plan to build legacies at their companies. I hope they inspire you to create your own.
IQ Insigniam Quarterly is our award winning magazine. We showcase thought leadership by executives for executives who are dedicated to transforming the practice of management and leadership.
The document provides an overview of the consulting firm Insigniam and discusses topics related to disruption and transformational leadership. Specifically, it introduces Insigniam as a firm that helps large organizations generate breakthroughs through innovation consulting. It also previews several articles in the issue that discuss how leaders at companies like Kaiser Permanente, DBS Bank, and BP have navigated disruption by embracing innovation and transforming their organizations. Additionally, it highlights Insigniam's services and solutions for strategic transformation and growth.
No single topic has been more top-of-mind over the past year for CEOs around the world than organizational culture.
Finally, leaders are recognizing corporate culture for what it truly is: an essential and unavoidable determinant of company performance. It influences, shapes and distorts the perceptions, thoughts and actions of the people within the enterprise—and often makes the difference between success and failure.
Yet some organizations still have to learn this the hard way. Just ask Volkswagen, the Fédération Internationale de Football Association (FIFA) and Toshiba. In 2015, each
of these enterprises was rocked by high-profile scandals that undermined customers’ goodwill and cost significant sums to repair. At the root of each of these scandals was a broken—or even toxic—corporate culture.
In February, after Moody’s downgraded its assessment of Toshiba in the wake of the company’s major accounting scandal, the Financial Times said, “The scandal exposed not only a corporate culture where employees were afraid to speak out against bosses, but also weaknesses across most of Toshiba’s businesses after the inflated figures were corrected.”
Ultimately, it is the CEO who is responsible for building and driving culture throughout the organization. And when that culture becomes a liability, it is the CEO who is held accountable. For example, in April, Amazon’s Jeff Bezos was still seemingly defending
his company after a scathing 2015 New York Times article described a workplace where employees were forced out after suffering from cancer and other personal crises. In his 2016 letter to investors, Mr. Bezos wrote, “A word about corporate cultures: for better or for worse, they are enduring, stable, hard to change. They can be a source of advantage or disadvantage.... We never claim that our approach is the right one—just that it’s ours—and over the last two decades, we’ve collected a large group of like-minded people. Folks who find our approach energizing and meaningful.”
Building a sustainable culture that drives the right results is not easy. In fact, according to Insigniam’s latest Executive Sentiment Survey, two-thirds of CEOs and managing directors report that installing or leveraging the right corporate culture is either not going well or they are still trying to figure out how to make it happen.
When CEOs do get it right, however, culture can lead to unprecedented innovation, growth and performance. As Microsoft CEO Satya Nadella told USA Today, “Ultimately, what any company does when it is successful is merely a lagging indicator of its existing culture.”
So if your company is coming up short, take a careful look at whether the culture is supporting strategy. And do not be afraid to make drastic changes.
ORDINARY PERFORMANCE IS A LOSING PROPOSITION
To win the future, leaders in today’s organizations must be bold. Whether the goal is to increase efficiencies, transform a business model, set a new strategic direction, bring an innovative product to market or drive culture change, to truly break through to be transformational leaders we must reject the status quo. We must stretch to imagine new and aggressive— even uncomfortable—outcomes, and act differently to execute on what we envision. And in the end, we must produce remarkable results.
At Insigniam, our focus has always been to move beyond the ordinary and achieve the remarkable. It’s in our DNA and our name. Insigniam derives from the Latin word “insignia,” meaning “marked as remarkable.” We act to help enterprises create remarkable performance.
These days, so-called unicorns like Uber, Airbnb and Snapchat are often mistakenly lauded as remarkable achievements. But let’s not be confused
by billion-dollar valuations. They signify potential that doesn’t necessarily translate into lasting value and results. Just ask Evernote, Dropbox and Theranos, three embattled unicorns grappling with issues like high executive turnover or questions about the true value of their respective technologies. And then there are Box, Fitbit and Square, unicorns that went public only to generate less-than-stellar results.
For true examples of remarkable results, we need to consider executives like Darren Childs of UKTV. After becoming CEO of the London-based broadcasting company, Childs rejected the status quo and pivoted the network’s strategy to focus on producing original and online content. The ROI? UKTV is one of the most-watched commercial broadcasters in the United Kingdom. Profits and revenues are now nearly three times greater than when he started. Remarkable indeed.
Childs saw his industry rapidly changing and decided to act before it was too late. As volatility becomes the new normal across much of the economy, will you be able to turn opportunities others can’t see into remarkable results? I know this much: Bold, unorthodox leadership is the only way to transform the status quo into something extraordinary.
Shideh Sedgh Bina
EXECUTION: WHERE THE RUBBER MEETS THE ROAD
The strategy may be brilliant, even breakthrough. But if it can’t stand up to competitive, technological and regulatory realities—as well as internal attitudes and processes—the plan’s objectives will most likely go unmet.
It’s all about the execution, which is the focus of this issue of Insigniam Quarterly. In our cover story, Pascale Witz, executive vice president of global divisions and strategic development at pharmaceutical giant Sanofi, discusses changes she’s engineered since joining the company in 2013.
Sanofi, currently in the early stages of a series of new product launches—the most ambitious in the company’s history—faces enormous executional challenges as it introduces six new medicines this year and up to 18 more over the next five years. In pharma, that’s light speed, and Witz will be at the center of the activity. Come 2016, Witz will lead Sanofi’s diabetes and cardiovascular global business unit.
Ramani Ayer, former chairman and CEO of The Hartford and now the member of two boards including Hartford HealthCare, knows the challenges of execution well. “A lot of organizations have great vision and great strategy,” says Ayer, this issue’s Boardroom interviewee. “But execution is what differentiates very successful organizations from those that have not been successful.”
You’ll see other examples in this issue of leading companies smartly executing their strategies amid complex, rapidly evolving business environments. I encourage you to borrow some of the lessons they’ve learned about execution.
Speaking of execution, we’re introducing an exciting new look for Insigniam Quarterly with this fall issue. To enhance your reading experience, we’ve developed a crisp, more modern feel: bolder graphics and photos, brighter colors, new headline treatments and a new selection of typefaces for enhanced readability. Also revamped to reflect these updates is quarterly.insigniam.com, which is now cleaner and better organized.
We’ve created a new department called “Browser History,” a roundup of reviews of topical books, websites and apps to help keep you abreast of the latest trends in business. Another new department, “Perspectives,” provides insights from leading scholars about the world of business.
We will, of course, continue to execute on our mission of transforming the world of business and the practice of leadership and management by creating thought leadership for executives, by executives.
I hope you like our new look, and I look forward to your feedback.
Finding the Factors that Fuel Growth
No one disputes the science behind Mother Nature’s growth process.
For plant life to flourish,the necessity of sunlight,water,and nutrients can’t be argued.
So why would we go about enterprise growth with any less certainty? After all, we have conducted thorough research to unearth the factors that lead companies to not just survive, but thrive.These prerequisites to growth can then be incorporated
at every level.
Take corporate culture, for instance. Some may think that culture is too intangible
to be molded.Yet our research, described in this issue, outlines nine specific facets of corporate culture and how they must be oriented for abundant growth.This,in turn, provides a clear road map for executives.
The same can be said for leadership.When executives fight inhibitory factors such as corporate myopia,and embrace risk and creative processes,growth through innovation is around the corner.
A quick glance at Fortune 500 companies reveals some truly exemplary case studies in growth, such as that of Cardinal Health, which ranks No. 22 on the esteemed list. Our in-depth interview with our cover subject, Donald Casey Jr., the CEO of the company’s medical segment, reveals how Cardinal Health has positioned itself for expansion during a time of unprecedented change in the healthcare industry. In many ways, Casey’s approach has taken into consideration the 10 disruptive forces in healthcare we identify in this issue,and Cardinal Health is now excelling into the future.
Even when an organization is riddled with apathy,suffering from dwindling profits, and facing a seemingly inevitable demise — we’ve found a fertile breeding ground for opportunity.We visit with turnaround expert and Arcadis U.S.CEO John Jastrem, who outlines what to do when it seems like the enterprise is out of options.
The truth is that, given the right tools and information, any company can take decisive
action that will lead to expansion.And in that vein,I present our spring 2015 issue,which considers the many sides of corporate growth from multiple perspectives. Dramatic growth only appears to be just out of reach,and here at Insigniam, we eagerly look forward to partnering with you in the journey to achieve new corporate goals.
Shideh Sedgh Bina
Founding Partner, Insigniam
Editor in Chief, Insigniam Quarterly
The Power of Technology to Transform
Our mission at Insigniam is to transform the world of business and the practice of management and leadership, unleashing the power of inspired human performance while catalyzing breakthrough results and remarkable value.The methods we utilize include breakthrough performance, cultural change, transformational leadership, and innovation within organizations — one way to do this swiftly and effectively can be by the adoption of well-conceived technology strategies. It’s also true that the ability to leverage these emerging technologies can be vitally dependent on how they are embraced by an organization’s culture.
With rapidly evolving technologies providing a new climate for potent organizational change,this issue of Insigniam Quarterly focuses on methods to meet these challenges and fundamentally alter the way business is done.The power of technology to transform can be realized in a number of areas that directly impact key organizational goals.
• Change brought about through technology requires you to think and behave differently, resulting in a big impact on a company’s manner of operating.
• Strong leadership is a prerequisite for a technology-driven transformation.
• Updates and changes in technology are essential for maintaining an
organization’s effectiveness.
• Disruptive leadership can give way to transformative technology initiatives,but
if not implemented properly, they can become disruptive in the wrong way.
• Relating back to the power of words and how people communicate,companies often overestimate technologies while underestimating the network of
conversations and relationships in their enterprises.
In this issue, we share stories of success and innovative thinking, starting with our
cover story on Suresh Vaswani and his efforts as president of Dell Services to drive technology-led transformations both for clients and within Dell. Hint: It’s all about merging the leadership of business strategy and corporate technology.The former CTO at growing online marketplace Angie’s List,Robert Wiseman provides industry- leading insights on how businesses either evolve or die from technology strategies.
Articles on Health 2.0 and the rapid implementation of mobile health care technology reveal opportunities for massive growth in that space.And on the subject of transformative change, we discuss the role of leaders in shaping the conversation around change so that employees can view it as a powerful opportunity.
While seizing this opportunity for transformation is frequently necessary to survive and thrive, not every emerging technology will prove to be a game changer.The key is continuing to look ahead — falling behind isn’t an option.
Shideh Sedgh Bina
Founding Partner, Insigniam
Editor in Chief, Insigniam Quarterly
Transform Your Definition of Transformation
Recently, during a lively dinner conversation with a large group of friends, the subject of change was brought up.A dear friend of mine, herself a C-Suite executive, made a point that change is not only inevitable but also necessary for growth and survival.
While I hardly dispute the value of adaptation, who wants to simply survive? Far too often, people confuse change — a product of the past — for transformation, which is the process of unlocking uncharted possibilities that are completely new and revolutionary.
But transformation, whether you’re cultivating an entirely new corporate culture or bringing a groundbreaking new product to market, can be risky. Consider the iPhone, something I consider to be a transformational product that created, not just added, value. Had the product been based on a gimmick or billed as being able to offer an experience beyond its capabilities, not only would Apple’s reputation — and stock — have paid a price, but so too would have consumer sentiment.This could have had a negative impact on R&D investments as demand for over-hyped smartphone products dwindled.
As we know, this was not the case. Not only has the iPhone been wildly successful but it has also transformed the way we interact and communicate.As is our position at Insigniam, transformations almost always require many large, critical initiatives to be executed simultaneously toward a unified goal, without losing any altitude in current operational efficiency — something we refer to as Breakthrough Performance.
But do all transformations look the same? Hardly. In the case of our cover story — an interview with Mary Kay Chief Marketing Officer Sheryl Adkins-Green — the cosmetics giant’s transformations were calculated and measured, and have resulted in more than 50 years of sustained success. On the other hand, in the case of Hager Group, it took a transformational leader in the form of CEO Daniel Hager to reinvent his family’s company into an unstoppable competitive force — one not only intent on surviving, but thriving.
With that, I present our fall issue, focused on the challenges and successes wrought by transformation.Transformation can be treacherous, but on behalf of everyone at Insigniam, we look forward to partnering with you along each step of the journey to help you arrive at a destination you can only imagine.
Shideh Sedgh Bina
Founding Partner, Insigniam
Editor in Chief, Insigniam Quarterly
This document provides an overview of key issues facing the global healthcare industry in 2014. It discusses demographic shifts leading to increased rates of noncommunicable diseases. Innovation is seen as essential for healthcare organizations to adapt. The document outlines several critical success factors for healthcare transformation, including putting patients first, understanding their needs and experiences, avoiding copying other organizations' approaches, ensuring efficient revenue cycles, and fostering partnerships. Overall it frames healthcare challenges as "wicked problems" that require new approaches to solve.
Leadership Isn't a Solitary Journey
Jean-Pierre Clamadieu, the new CEO at Belgian chemical company Solvay who appears on our cover, is very clear and direct about a keystone to being successful as a disruptive leader.
“You are not a transformational hero who is carrying the weight of the transformation on your own shoulders,”he told us.“You need to have a strong team around you who have the ability to support the changes.”
It’s sometimes hard to think in those terms, especially when considering the responsibilities that leaders are faced with. But person after person told us that disruptive leadership is not a solo act.The vision for your enterprise’s future may be yours — and you have to have a bold vision — but it takes a team of people who have bought into that vision to make it a reality, because that’s what disruptive leaders do.
• They ask tough questions. Not “why didn’t we” questions but “why can’t we” questions.
• They present a bold vision, one that seems impossible on its face.
• They align everything in the enterprise to turn that vision into a reality.
• They inspire everyone on their team and in their organization to make that vision happen.
So if you are still trying to shoulder the burdens of leadership alone, stop.
Look around you and see who you are surrounding yourself with? Are they, as our own Nathan Rosenberg asks in this issue, committed to your vision for the future or merely complying with your directives?
Shideh Sedgh Bina
Founding Partner, Insigniam
Editor in Chief, Insigniam Quarterly
Move the Innovation Needle Faster and Further
As international management consultants for several decades, we have long said that business needs a breakthrough, years before innovation became a catch-all buzzword to address what’s ailing many organizations.
The reality is that many enterprises are mired in red tape, with leaders unsure how to move the needle from complacency to competitiveness. One of our 2013 Insigniam Executive Sentiment Survey respondents puts it plainly:
“If we do not innovate in areas of operations, we will be consistently bringing up the rear and not leading in our industry.”
This plea for transformative innovation inspired the launch issue of Insigniam Quarterly, our thought-leadership journal designed to help businesses fulfill a commitment to reaching unprecedented results.
Our publication is not about our story; it’s about tangible and lasting results from leaders and their organizations around the world.
Inside, leaders who routinely move the innovation needle faster and further share their breakthroughs, from Pete Valenti’s invigoration of Bausch + Lomb’s pipeline to exploring growth and profit from creative leadership at Levi Strauss, Glazer’s, and Ryan, the latter of which is poised to become a disruptive force among the big four tax firms.
Shideh Sedgh Bina
Founding Partner, Insigniam
Editor in Chief, Insigniam Quarterly
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1. VO L U M E 1 , I S S U E 2 | S U M M E R 2 013
TRANSFORMING
DANONE:
Putting customers rst
has helped the food
products multinational
grow beyond $26
billion in revenue.
TRANSFORMATIONCAN AN ENTERPRISE CHANGE ITS SPOTS?
Can you control
the uncontrollable?
In an attempt to wrangle fuel
costs, Delta Airlines buys an
oil refinery.
Why people matter in a
merger or acquisition
Focus on just the bottom line
and your M&A will likely fail.
The key to successful
transformation
How Corning made sure that
culture didn’t eat its strategy
for lunch.
2. Transforming an enterprise with thousands
of employees serving millions of customers
in multiple countries with multiple product
lines and far-flung supply chains can often
feel like herding a building full of cats. How
do you herd a building full of cats?
Tilt the foundation, the very basic principles
on which the enterprise relies.
— MICHAEL R. WALDMAN
3. INSIGNIAM QUARTERLY 1SUMMER 2013
I
I’m sure you’ve heard of gorilla glass.It’s probably on the front of your smartphone,
and its strength has saved you from a broken phone more than once.
But it’s not just you and your smartphone that gorilla glass has saved.It also saved
Corning Inc.The breakthrough product is the result of a cultural transformation at
the specialty glass and ceramics maker.
For Peter Volanakis, Corning’s former COO, saving Corning was all about
having the right culture in place.It was a culture that allowed a product like gorilla
glass to lose money for 14 years before it found its way onto more than 100
million mobile devices. Inside this issue of Insigniam Quarterly, he shares the value
of a company’s culture in transformative environments and offers his three keys to
transforming culture.
While the Corning story is definitely instructional and inspirational, it’s far from
unique. In our decades as international consultants, we’ve seen it time and time
again. A company wants a breakthrough transformation. It wants to grow, but it
can’t.Its culture is holding it back.
Throughout this issue, we talk about transformations, both big and small. From
Delta Airlines buying its own oil refinery to control fuel costs to the keys to a
successful merger. And at the center of each of these transformations is culture.
Culture is the very core of how the people in an organization think, perceive
opportunities, and behave, and it either supports a transformation initiative or
culture stifles it.
As the saying goes,“Culture eats strategy for lunch.” It doesn’t matter how well
thought out your plans are, if all the elements of your people are not on the same
page with your strategic needs,then your initiative will be for naught.
Consider the company featured on our cover, Danone. For the French food
products multinational, the culture change included a whole new leadership
approach, adapting its culture to emerging markets and listening to its customers.
Listening not in the cliché way that we all say we listen to customers. Danone is
actually bringing them into the R and D process.
That was a bold step,but it was necessary if Danone wanted to be a global player.
It’s time for a hard look at where you want to be and to ask yourself if it’s your
corporate culture that’s preventing your breakthrough transformation from taking
flight.
Shideh Sedgh Bina
Founding Partner, Insigniam
YOU HAVE A TRANSFORMATION
STRATEGY, BUT IS YOUR
ORGANIZATION PART OF IT?
LETTER
4. SUMMER 20132 INSIGNIAM QUARTERLY
18
THE TRANSFORMATION ROADMAP
Gregory Trueblood, Insigniam
Are you ready for a change? Are evolutions in your
industry demanding it? Then it might be time to do
what Mohawk Fine Papers did and transform your
business model.
34
2013 EXECUTIVE SHADOWING STUDY
Erica M.Wood, Insigniam
For busy executives, time is money.A few simple
protocols can help them reinvest some of that
capital in innovation and increasing customer value.
38
CHEW CAREFULLY
Shideh Sedgh Bina, Insigniam
Successfully merging two companies requires a
careful examination of the ingredients and how
they work together so as to prevent heartburn
down the road.
42
THE KEY TO TRANSFORMATION
Pete Volanakis helped lead Corning back from
the verge of bankruptcy, but to do that the former
COO had make sure the company’s culture didn’t
eat its strategy for lunch.
FEATURES
TRANSFORMING
DANONE
Putting consumers first
— even inviting them to
be a part of the research
and development
process — has helped
the French food products
multinational grow beyond
$26 billion in revenues.
COVER
STORY
28
TABLEOFCONTENTS
5. SUMMER 2013 INSIGNIAM QUARTERLY 3
EDITOR-IN-CHIEF Shideh Sedgh Bina
shidehbinaIQ@insigniam.com
EXECUTIVE EDITORS Nathan O. Rosenberg
nrosenberg@insigniam.com
Michael R.Waldman
mwaldman@insigniam.com
CHIEF FINANCIAL OFFICER Ralph Gotto
DIRECTOR OF WORLDWIDE Karen Turner
CLIENT SERVICES kturner@insigniam.com
DIRECTOR OF SPECIAL PROJECTS Alexes Fath
PUBLISHER Gordon Price Locke
gordon.locke@dcustom.com
MANAGING EDITORS Elise Anthony
elise.anthony@dcustom.com
Jarrett Rush
jarrett.rush@dcustom.com
CREATIVE DIRECTOR Kyle Phelps
kyle.phelps@dcustom.com
PRODUCTION MANAGER Pedro Armstrong
IMAGING SPECIALIST John Gay
ACCOUNT SERVICE MANAGER Caitlin Faubion
EDITORIAL QUERIES
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Suite 2100
Dallas, Texas 75201
www.dcustom.com
214.523.0300
For Advertising Information, contact Jas Robertson at
214.937.9811 or jas.robertson@dcustom.com
Insigniam Quarterly is published by D Custom, 750 Saint Paul Street, Ste. 2100, Dallas, Texas 75201.
Copyright 2013 by Insigniam. All rights reserved. Letters to the editors may be sent to Insigniam
Quarterly c/o D Custom, 750 Saint Paul Street, Ste. 2100, Dallas, Texas 75201. No part of this
publication may be reproduced in any form or by any means without prior written permission of the
publisher and Insigniam. Printed in the U.S.A. Magazine patents pending. For subscriptions, please visit
www.insigniamquarterly.com.
Q U A R T E R LY
VOLUME 1, ISSUE 2 | SUMMER 2013
“You can have the finest strategy in the world, but it has to
be executed by people and it has to happen in a cultural
context. Culture is the context in which that strategy sits.”
— PETE VOLANAKIS, FORMER COO AT CORNING
THE TICKER
Transformation stories, books, and great ideas
TOP LINE
Transformation by the numbers
BLOOD, SWEAT AND TEARS
Gordon Price Locke, D Custom
Delta boldly tries to control the uncontrollable
BOARDROOM POV
Gordon Price Locke, D Custom
The right board with the right CEO is critical at each
stage of a company’s evolution
THE BIG PICTURE
Sustainable transformation requires
only that you follow the map
CRIPPLED BY PROCESS
Bob Lutz, former General Motors Vice Chairman
In an excerpt from his new book, Lutz takes a look at
the fall of GM and the leadership of Rick Wagoner
IQ BOOST
Katerin Le Folcalvez, Insigniam
Creating a common cause can lead to results
04
08
10
12
16
24
48
DEPARTMENTS
On the cover
Danone is transforming by
putting customers first.
Insigniam and its publisher, D Custom, distribute
this editorial magazine to share the opinions
and insights of companies and their leaders on
impactful global business issues. Insigniam
Quarterly’s inclusion of a company or individual
does not indicate that they are a client of Insigniam.
Remuneration is not provided for editorial
coverage. Individuals appearing in Insigniam
Quarterly have done so with direct consent, or
provided consent by a designated authorized agent
in addition to being disclosed on the magazine’s
audience and purpose.
6. THE TICKER
SUMMER 20134 INSIGNIAM QUARTERLY
THE TICKER
Polaris Industries (NYSE: PII), the maker of ATVs, snowmobiles, and related
vehicles, initiated a 10-year plan in 2008 to boost sales and net income margin
by focusing on its customers and innovation. Even before the start of the push,
the company had hosted idea contests,which initially required paper submissions.
To reinvigorate its idea contests, Polaris turned to Microsoft SharePoint and
innovation software engine Spigit to improve engagement. After implementing
that system in 2012,Polaris received 249 ideas,up from an average of 120 per year
in prior years. Further, Polaris employees increased their collaboration, voting on
good ideas and offering suggestions to improve submitted ideas.
BY CHAD WATT
TECHNOLOGY REVIVES THE IDEA CONTEST AT POLARIS
SUMMER 2013
7. SUMMER 2013 INSIGNIAM QUARTERLY 5
Amazon (NASDAQ:AMZN) struck upon itsAmazonPrime service after years of searching
for a customer loyalty program that was innovative and different from all others.
The idea for Amazon Prime came from Amazon’s internal online suggestion box and
a company software engineer who proposed a free shipping service, according to a 2010
Businessweek article on the retail powerhouse’s service. Company board members and
CEO Jeff Bezos sculpted and improved the idea with Bezos ultimately giving a small team
a short deadline and access to all the company’s resources to implement the idea before
unveiling it on a year-end earnings call in 2005.
Now other retailers, online and offline, have been looking to emulate Amazon’s ultimate
customer loyalty weapon.
STAND UP FOR MEETINGS
Next time you engage another executive or address your
team, don’t sit down. Meetings can be the most powerful
way to energize your employees, or they can be a huge drain
on time, resources, and morale. Tips for creating effective
meetings abound, but one thing that helps in any context is
simply standing up for the meeting. A University of
Missouri study from 1999 shows that sit-down meetings
were 34 percent longer and produced no better
decisions than stand-up meetings. Morning stand-up
meetings have become a hallmark of many fast-moving
technology businesses.
FROM POSTAGE METERS TO
SOCIAL NETWORKS
A PRIME IDEA GOT ALL THE RESOURCES IT NEEDED
STAND UP FOSTAND UP FSTAND UP FSTAND UPSTAND UPSTAND UPSTAND USTAND
THE SUPER-ADHESIVE THAT DIDN’T STICKThe glue on the back of 3M’s (NYSE: MMM) Post-It Note,was initially deemed a failure. The pseudo-sticky stuff was partof an effort by the chemical and manufacturing conglomerateto make a super-adhesive.
The Post-It glue didn’t stick for that application, but, thanks to3M’s longstanding practice of allowing employees 15 percentof their time for creativity, 3M scientist Art Fry perfected theproduct based on an idea that he and a colleague had earlierdiscussed.
“It wasn’t an accident at all,” Fry told the SmithsonianInstitute in 2008. “It was because we had the division vicepresident that committed money to develop new products. Itwouldn’t have happened without that commitment.”
1,000new ideas have
been implemented.
For Pitney Bowes (NYSE: PBI)
to go from its start in 1920 making a
newfangled device called a “postage
meter”for the US Postal Service to a $2.6
billion provider of software and hardware
focused on document management and
shipping,transformation has been crucial.
In the last five years, the company has
worked to engage its entire workforce
in innovative thinking by applying new
technology, including social media, to
share,improve,and implement ideas.
The company has deployed two
internal online forums to generate
new ideas and foster more engagement
from the workforce. Since launching
its Yammer social networking platform
in 2009, more than 6,600 employees
worldwide have posted more than
41,000 messages, according to the
company website. Its IdeaNet internal
web community is built around “idea
challenges” giving employees a chance
to tackle challenges and implement new
strategies.
In its first two years of operation,
employees tackled 52 idea
challenges and, through
2012, about 1,000 new
ideas introduced via
the system had been
implemented which have
generated revenue for the company.
SUMMER 2013
technology businesses.
8. SUMMER 20136 INSIGNIAM QUARTERLY
THE TICKER
WORK AS ART
Author and marketing guru Seth Godin challenges
old-school business values of playing it safe, obeying
rules, and staying in your comfort zone in his new
book, The Icarus Deception. He deconstructs the myth
of Icarus, that flying too close to the sun and pushing
your limits is dangerous,even deadly.Godin challenges
readers and leaders to view work as art.
In thinking about art, “good enough” is never
acceptable for Godin, who argues that leaders who
treat their work as art and strive to create something
remarkable will fly higher than Icarus’ father would
have ever imagined.
Computing giant IBM (NYSE: IBM) stages
innovation-focused events, called “jams” to explore
new ideas and focus on solving specific problems. The
process of IBM’s jams have evolved since their start in
2001 to more focused and curated discussions, said
Liam Cleaver, director of the IBM Jam Program Office,
in a company interview.
Innovation Jams in 2006 and 2008 redefined
markets and products for the company, but it was the
company’s 2003 ValuesJam which was a key inflection
point in how employees and managers interact with
each other and collaborate to make the company a
better place.
At the time, IBM was in limbo, transitioning between
its heritage as a maker of business machines and
computers into a software, hardware and services
provider. Thousands of IBM employees shared heat
and discordant views of the company and where it
was headed. As the Jam continued, according to a
2004 Harvard Business Review article, the discussion
shifted from criticism to construction.
Those thoughts, some harsh, helped newly installed
IBM CEO Sam Palmisano move forward with the
reinvention of the company.
IBM’s share price today is up 137 percent from the
time of the ValuesJam, and the company has extended
its Jam methodology beyond the traditional business
realm to topics including helping U.S. military veterans
excel in college and assisting South Africa in engaging
the nation’s underemployed youth population.
INSTITUTIONALIZING INNOVATION AT IBM
GIVE AN INTROVERT A CHANCE
Author and self-described introvert Susan Cain writes that introverted
leaders often deliver better outcomes than extroverted leaders. Research
fromAdam Grant at theWharton School of Business at the University of
Pennsylvania shows that introverts are more likely to let their employees
run with ideas. Cain writes about the power of introverts in her 2012
book, Quiet:the Power of Introverts in aWorld that Can’t StopTalking.
9. Annual budgets and staff growth aren’t the only things you should be
planning for. A good content strategy can focus your company’s marketing
efforts and generate the kinds of leads that help boost both your bottom
line and your brand reputation.
Do you want to get three times the customers? You need a better plan.
Learn how you can transform your marketing at
dcustom.com/contentstrategy.
If you want to generate more revenue,
maybe you need a new plan.
3XCONTENT MARKETING PRODUCES
THREE TIMES THE LEADS PER
DOLLAR THAN TRADITIONAL
MARKETING AND ADVERTISING.
10. The percentage
of U.S.
employees
not engaged
or actively not
engaged during
the third quarter
of 2011 according
to the Gallup Q12
poll.This number
has been roughly
unchanged over
the last decade.
71%
BY THE NUMBERS
COMPILED BY MATT BECHER
125%
Improvement in M & A success rates
when people are made a priority.
—Insigniam.com
The percentage of
mergers that earn back
their capital.
—Technical Information
Associates, Inc.
The percentage that IBM shares rose during Sam Palmisano’s
years as CEO at IBM,2003 to 2008
— allthingsd.com
>33%
77%
8 INSIGNIAM QUARTERLY SUMMER 2013
TOP LINE
11. $350,000,000,000
The percentage of employees who were engaged
in their work and also said they had a boss who
made them feel hopeful about the future.This
is important because employee engagement
is directly linked to things like customer
engagement, productivity, and profitability.
— Gallup Business Journal
Amount of money actively disengaged employees cost
the U.S. economy in lost productivity annually.
— Gallup
“Culture drives your
business, period.
It’s not the other way
around. Get your
culture right, hold
firm to your values,
and the financial
results will follow.”
— Ingar Skaug
$250 million to $5 billion
increase in revenue after tragedy
69%
69%
31%
% of employeees engaged in
work because of their boss.
% of employeees who are not
engaged in work because of
their boss.
INSIGNIAM QUARTERLY 9SUMMER 2013
The amount revenue increased at Wilh. Wilhelmsen during Ingar Skaug’s
20 years as CEO. Skaug took over leadership of the Scandinavian shipping
company after its top two levels of leadership were killed in a plane crash.
The secret to the company’s success even after such a tragedy, according
to an article at Forbes.com, was the culture at Wilhelmsen.
12. SUMMER 201310 INSIGNIAM QUARTERLY
IBY GORDON PRICE LOCKE
MAKING THE
UNCONTROLLABLE
CONTROLLABLE
It is easy for most executives
to recite road warrior stories.
They almost always include an
airline in their tale. Bad service,
baggage headaches,delays,airport
congestion, prices. Now there is
something new to talk about —
the airline that is not afraid to
make a bold move.
Delta Airlines (NYSE: DAL)
has put its “rules of the road”
culture to work again and again
using employee and leadership
ingenuity to rule the skies.
Delta tackled its merger with
Northwest in 2010 with championship speed. It has emerged as a top-
ranked airline with passengers, beat profit projections in 2012, and is
now turning an eye toward controlling something that’s always been
considered uncontrollable — fuel costs.
Most analysts see air travel as commoditized transportation and that
price is what matters.While competitive pricing is surely important,Delta
has proved that service transformation is too.Delta has now found another
Vinay Dube talks about Delta’s
bold move to wrangle fuel costs by
purchasing an oil renery.
BLOOD,SWEAT&TEARS
13. SUMMER 2013 INSIGNIAM QUARTERLY 11INSIGNIAM QUARTERLY 11
differentiator — a $150 million transformational investment in
supply chain control,owning it’s own oil refinery.
It is apparent Delta’s culture is getting enterprise-wide
transformation right by embracing the initiatives necessary
to make it happen over and over again.Vinay Dube, Delta’s
SeniorVice President for Asia Pacific, shares his point of view.
Dube is an experienced executive and has witnessed his share
of change, risk, failure, and success. Dube paints a picture of
how Delta’s leadership arrived at the decision to purchase an
oil refinery, amidst likely scrutiny of analysts
and pundits in the air travel industry.
BEING OPEN TO BUSINESS AS
UNUSUAL
For many years, airlines have had to circle
around a known set of controllables to run
their businesses. Fuel costs was not one of
those. The lack of control was looked at
differently at Delta. Dube says, “Roughly
40% of your revenues go to pay for oil, and
at Delta Airlines that is about U.S. $10 billion
to $12 billion a year. Up to 20% of that
cost is for refining crude oil — that was the
opportunity.” The airline purchased an oil
refinery in 2012 and created a wholly owned
subsidiary,Monroe Energy,to run it.It is now
at full production.
BIG LEADERS MAKE BIG PROMISES
Transformational initiatives are not always
obvious. “Is my day-to-day different? No.”
Dube says.“But it is transformational for the
airline’s employees in many ways. …We have
a unique business culture, and this decision
cements for the employee that big leaders are
willing to make big promises.”
Culturally, employees feel that Delta’s
leadership is looking out for them.
“Something like this helps surmount the
typical cynicism that exists between employee groups at most
airlines, it shows management is willing to try different things,
willing to stick it out,walk down our own path,”says Dube.
KEEP IT IN PERSPECTIVE
To make decisions like this Dube says,“you have to keep
things in perspective.”While volatile, the run up in fuel prices
are nothing compared to the large increases in refining costs.
The cost to take some measure of control was $150 million,
roughly the cost of one wide-body aircraft.“The perspective
was not to do nothing,” Dube says,“it was if it does not work
and we have to shut the refinery down and resell the asset,they
would have gambled 2% to 3% of one year’s fuel bill. For an
airline that is used to small and large business transformation,
that seemed to attract them like a magnet.”
REMOVE BARRIERS TO CHANGE
Delta proved that looking at the same problem and never
exploring a different point of view can
be damaging. Everyone had to have the
same take-away — they didn’t have to live
with the problem in order to move past a
number of barriers to what initially seemed
counterintuitive.
MAKE FRIENDS WITH RISK
“No other airline has done this before,”says
Dube. “We can buy a bad aircraft and return
it. Since we have 750 aircraft, no analyst will
really say anything like you bought one bad
airplane.Yet, our risk was similar to the cost
of one aircraft. Thus, because it is different,
we can easily be criticized and a $150 million
decision can be reacted to like it is a billion-
dollar decision.” Delta’s decision allows
employees and leaders to focus on running an
airline while they enjoy the reward of lower
fuel costs in 2013 and beyond.
THE RIGHT CULTURE
CREATES SPEED
Delta is accustomed to constant change.
“An airline can’t control the health of the
economy for example,” Dube says, “which
largely determines the passenger market,
however, the question that emerged was: is
there a way we can control this uncontrollable,
called fuel costs?”
The employee culture, shareholders, and top leadership
allowed Delta to consider something quite radical — what
aspect of oil costs can we impact for the better? That path to
execution was all about speed.“Every employee here is part
of a values-based culture.They know our rules of the road at
Delta, which says not everything can be explained or detailed
out for you and unpredictable or different things can happen
along the way — use thorough thinking,good judgment,and
don’t linger on it too long,take action,”says Dube.
ROUGHLY
40%
OF YOUR
REVENUES
GO TO PAY
FOR OIL, AND
AT DELTA
AIRLINES THAT
IS ABOUT U.S.
$10 BILLION TO
$12 BILLION
A YEAR
14. SUMMER 201312 INSIGNIAM QUARTERLY
L
WHY TRANSFORMATION LIVES
OR DIES IN THE BOARDROOM
Large companies, whether public or private, evolve as
they adapt to sustain growth and profitability. Successful
evolution requires the CEO-to-boardroom dynamic be
healthy and focused on driving a business forward with
speed and transparency.
B.C. Forbes, founder of Forbes magazine, once said, “A
business, like an automobile, has to be driven in order to
get results.”To better understand the dynamics between the
board and the C-suite, we turned to two seasoned veterans
of the boardroom, both remarkable
in their accomplishments and
unique in their points of view.
Dr. Philip Neches, co-founder of
Teradata (a $2.6 billion company,
according to 2012 annual revenue reports), former board
member of International Rectifier, and current board
of trustees member for Caltech; and Charlie Kemper,
managing director of Revel Partners and board member of
the association of NewYork CityVenture Capitalists.
COMMITTEES OR COLLABORATORS
The traditional view of a board and the CEO is that
of guiding a company’s financial choices.The hope is that
BY GORDON PRICE LOCKE
The right board members with the
right CEO are critical at each stage
of a company’s evolution.
THE BOARDROOM
15. SUMMER 2013 INSIGNIAM QUARTERLY 13
the CEO and boardroom are also watching the nuances of
whether a company’s strategy is working long term.
The boardroom is a world of committees, and, while
committee work can get boring, it is critical that as a
company evolves, the board is on its toes.When a strategy
is off kilter it can be missed early on, but if the board is
engaged, that will not go unnoticed.“What makes a board
effective in this high-stakes, high-tension environment is
the ability to know when something that was working isn’t
working anymore in time to address it,” says Neches.
That doesn’t always mean making a change at the top.
“Sometimes there is no bad guy, no certainty, nothing
wrong to audit and no one to replace,”says Neches.“Those
are the most difficult discussions,because the CEO and the
board have to manage through lack of progress without
clear indicators.”
Kemper says there are two kinds of boards, open and
collaborative or closed and rigid.
Different boards are effective during
different evolutionary stages of a
company’s life, and as a company
begins to transition from one stage to
another a change in board members
and/or a company’s C-suite may become necessary.
Kemper sites Google as an example. “The young guys
that started Google were great at innovative product
development.They brought in a ‘gray hair’ experienced at
leading growth and execution. When they were ready to
innovate and reinvent again years later, that CEO stepped
aside and one of the founders, now seasoned, along with a
mature and effective board, took over the reins.”
UNCERTAINTY IS THE ENEMY OF
TRANSFORMATION
Neches says successful CEOs and boards accept the fact
that emotion, when used appropriately, creates openness
and results. “A CEO has to be willing to be vulnerable.
They can’t know all the answers,they just need to recognize
something needs to change and can use the board to help
resolve that the current course isn’t the right one.”
In times of uncertainty, it is easy to
play it safe. Kemper says many boards
default to lower risk, shorter term
thinking he characterizes as“five yard
drives versus 80 yard passes.” Neches
states that “boards are fraught with
IN TIMES OF
UNCERTAINTY, IT IS
EASY TO PLAY IT SAFE
“WHAT MAKES A
BOARD EFFECTIVE IN
THIS HIGH-STAKES,
HIGH-TENSION
ENVIRONMENT IS THE
ABILITY TO KNOW
WHEN SOMETHING
THAT WAS WORKING
ISN’T WORKING
ANYMORE IN TIME TO
ADDRESS IT.”
DR. PHILIP NECHES
16. SUMMER 201314 INSIGNIAM QUARTERLY
friction when things seem off track and people can get
entrenched, drink their own Kool Aid, and it gums up
discussions that need to happen.”
THE BOARDROOM IS A PLACE
TO GET VERSUS GIVE ANSWERS
Neches told a great story of why leaders are conditioned
to have all the answers.“Do you know how long it takes
for an elementary school teacher to start to answer a kid’s
question on average?” he asked.The answer,“One second.
As leaders,we sometimes feel we have to answer everything
in the face of uncertainty, just like the elementary school
teacher.” And that, Neches says, can lead to some bad
boardroom behaviors.
Neches shared that when he was brought into NCR
Microelectronics, part of a $6 billion company, to look at
the company’s product portfolio. It was profitable, but not
profitable enough. The company needed a breakthrough
in that business area to earn back its cost of capital in a
$500 million business line. Neches’s recommendation may
seem straightforward — focus more capacity on high-
margin products where the company had good intellectual
property — but getting there was a tough process. In the
end, NCR Microelectronics met its objectives, but the
decision had a lot of upfront uncertainty. By asking the
right questions, a transformation breakthrough happened.
THE CEO’S DILEMMA
Being a CEO is a lonely job, and often there is no one
to talk to. Successful companies have boards that are not
just having meetings for the sake of having meetings.
Neches says that CEOs should expect questions and
expect to listen. “A board that asks hard questions is one
that is engaged and interested,” he says.
Neches says the board has to have the ingredients of
a productive boardroom if transformational ideas are to
move from the boardroom and into action. “The board
can’t just be a reflection of the CEO’s ideals,” he says.“The
board members all need to be heard and understood, and
the respect for differing opinions has to be there.”
THE ROLE OF CULTURE AND THE BOARD IN
TRANSFORMATIONAL INITIATIVES
It may all boil down to the climate the CEO has created
with the board. It may also have to do with the culture [or
makeup] of the board itself.
“There has to be a balance of board members,” Kemper
says.“It is always good to have some board members who
DR. PHILIP NECHES
Co-founder of Teradata, former board member of International
Rectifier, and current board of trustees member for Caltech
1 Reverse the
order of your deck
— Start with the
conclusions, as you
can better gauge the
selling job you have
to do.
2 Go in to listen
more than to talk —
If you have a healthy
BOD environment,
make them part of the conversation to make the
best decision around the idea.
3 Don’t have all the answers — While it is great
to anticipate and be prepared, the harder the
questions, the higher the level of engagement
from board members.
CHARLIE KEMPER
Managing Director of Revel Partners and board member of the
association of New York City Venture Capitalists
1 Look at
the audience
background — Are
board members
from operating
companies, venture
investors, financial
types or industry
experts?
2 Pay close
attention to risk
mitigation — Charismatic CEOs can err on the
side of upside dialogue, thorough thoughts on the
downside will create more success with the board.
3 Don’t forget to touch on execution —
Explain how your leadership team and middle
management will embrace and execute.
CRITICAL ADVICE IN PREPARING TO
SELL TRANSFORMATION INITIATIVES
FACING THE BOARD?
THE BOARDROOM
17. SUMMER 2013 INSIGNIAM QUARTERLY 15
are shareholders as well as industry experts and those with
financial expertise.” Kemper cited AOL as an example of
not getting the right balance between the type of CEO
they have and the mix of board members needed to hit its
transformational needs.
Kemper also stressed culture. “For most companies,
looking at new opportunities to expand, management,
and the culture they build is the number one enabler or
inhibitor. The board and the CEO have to get it right from
the start by empowering middle management,encouraging
a culture appropriate for what needs to be accomplished
long term.”
Kemper said that while it is the CEO’s job to sell
transformation, the board also has several jobs in ensuring
that its CEO is successful. He offered four points of
advice. “The board members should be an open line
of communication, be coaches. They should help the
CEO recruit the right leadership, and use their business
development savvy to help prioritize large growth efforts
in addition to helping the CEO think through strategic
partnerships.”
Neches perhaps summed it up best in reflecting on a
key cultural value that is part of the success of the C-suite
and board relationship at Teradata, a company he founded
34 years ago and helped lead.“It is for employees to have a
sense of missionary zeal in what the company is doing and
the good it could provide the world, and it is still alive and
well today.”
18. THE BIG PICTURE
YOU
ARE HERE
Interview a cross section of
employees to reveal beliefs,
assumptions, and hidden
drivers of performance.
Articulate a transformation framework,
including Breakthrough Outcomes.
Welcome to
Sustainable
Transformation.
SUMMER 201316 INSIGNIAM QUARTERLY
MAPPING
TRANSFORMATION
The greatest cities in the world were changed and shaped by their
subway systems. The systems shaped the cities’ cultural norms,
vitality, and growth. Transformation can do the same for your
enterprise if you know how to implement and follow the map.
REVEAL
FRAM
EW
ORK
CREATED
PRO
JEC
TS
LAU
N
C
H
ED
Establish a Leadership
Coalition, a cross-level,
cross-functional group
that directs and monitors
the organization’s
transformation.
Determine a
Keystone Project,
a mega project
which will cause a
state change.
19. Create Breakthrough
Projects with specific
measurable results.
Rapidly redesign work so
that the transformation
can be sustained.
INSIGNIAM QUARTERLY 17SUMMER 2013
CHANGES IMPLEMENTED
Begin Breakthrough Competencies Trainings.
Develop leadership competencies needed for
the transformations and implement coaching.
REVEAL
The first step to transformation is knowing
what beliefs could be holding you back.
EXECUTIVES
Second, determine how you are going to
break free of those beliefs and transform.
WORK TEAMS
Third, create breakthrough projects that
engage employees in the transformation.
ALL EMPLOYEES
Finally, develop training needed
to sustain the transformation.
1
2
3
4
Start an Enrollment
Campaign that will engage
key constituencies in the
transformation.
Intentionally engage
and train middle
management.
Develop leaders to lead
from a new framework.
21. SUMMER 2013 INSIGNIAM QUARTERLY 19
Ready to change? You might want to start with your business model.
By Gregory Trueblood
22. SUMMER 201320 INSIGNIAM QUARTERLY
Borders never capitalized on the market’s embrace of
the e-reader. Kmart didn’t recognize the customer service
changes that were taking place in the retail industry.
Mohawk Fine Papers, a privately held paper
manufacturer founded in 1931, was recently faced with a
change-or-die decision thanks to a radically transforming
marketplace. For several years, digital technology had been
altering the ecosystem of Mohawk’s distribution-channel
partners, known as “merchant” distributors, and its end-
user customer base of large offset printing firms.
Technology was also spurring a shift from print to
online publishing. Global competitors offering cheaper
services had emerged.The company’s
distribution partners were having a
tough time adjusting, were cutting
back on marketing to end-users, and
were reducing inventories to save
money. Two years ago, it became
starkly apparent that these trends
endangered Mohawk’s survival.
“In just one year, 2011, we realized
that conditions were changing even
more quickly than we had seen
before,” says Thomas O’Connor,
Mohawk’s CEO. “For example, it
was clear that our next generation
of buyers would want to buy our
products on their smartphones.”
And those buyers would prefer
to buy directly from Mohawk.
That’s quite a contrast from the
historic sales channel model of
distributors interacting with
most end-users and fulfilling
their orders. O’Connor issued
a challenge to the company to
revamp the business model —
and quickly.
As an organization like
Mohawk realizes that profound
changes are required to meet
a shifting market landscape,
widespread internal support
for taking bold steps begins
to build. Despite the inherent
organizational forces that
resist dramatic change, once
management commits to
renovating of the business model, momentum for action
grows stronger. The key challenge at this point is to
implement a process that can generate innovative ideas that
lead to the best possible revamped business model.
There are few templates, though, for unleashing business
model innovation in a large corporation — an institution
designed more to produce conformity rather than
transformative ideas. One exercise that has proven effective
aims to encourage participants to make suggestions far out
of the mainstream — some of which might even seem
outlandish. It begins with the study of the business model
map.
THE BUSINESS MODEL MAP
The business model map
identifies the major aspects of a
business — internal and external
— and diagrams the company’s
relationships with customers,
suppliers, and key business partners.
From these ingredients, we can
graphically describe the company’s
recipe for success, and more
importantly, find ideas for a new
formula.
Business model transformation
begins with searching for gaps
he greater the change in
an industry, the greater
the need to change old
business models.The
complexity of large businesses makes that
task difficult. How can you take a disciplined
approach to business model transformation?
That’s a question several companies have
failed to answer as their industries evolved.
BUSINESS MODEL
TRANSFORMATION
BEGINS WITH
SEARCHING FOR
GAPS BETWEEN
MARKET SOLUTIONS
AVAILABLE AND
CUSTOMER NEEDS
T
23. SUMMER 2013 INSIGNIAM QUARTERLY 21
CUSTOMER
VALUE
PROPOSITION
KEY
ACTIVITIES
01
02
03
COST
STRUCTURE
05
CUSTOMER
RELATIONSHIP
06
KEY
RESOURCES
08
KEY
PARTNERS
09
DISTRIBUTION
CHANNELS
07
BUSINESS MODEL MAP
REVENUE
STREAM
04
24. SUMMER 201322 INSIGNIAM QUARTERLY
between market solutions available and customer needs …
even if those needs haven’t been articulated by customers.
To identify those gaps, a team of 10 to 30 people
representing multiple business functions (or from within a
single division if the business model refocusing is solely for
one division) dedicate a few days to brainstorm. Mohawk’s
transformational team consisted of key management
personnel from product development, customer service,
sales, and finance, and a board of directors made up of
retired CEOs. A transformational team identifies the
potential gaps that the organization could exploit with a
new business model through several perspectives:
Value driven
Customer driven
Finance driven
Resource driven
Value-driven solutions create new
value propositions that currently do not
exist, and require innovation of other
elements on the map.You can get at these
points by asking questions such as:
What do people have to “put up
with” or fix about our product that
we could address?
What would people want but
don’t ask for because they think it’s
impossible?
Mohawk addressed this perspective
by realizing that some customers want
to make purchases by smartphone, and
responded with beefed up e-commerce
offerings.
Customer-driven solutions are based
on customer needs, which often tap into
new customer categories.You can get at
these by asking questions such as:
What kinds of new customers could we reach?
Can we sell to new demographics: young men, or
perhaps single parents?
To market our products, should we focus on repeat
buyers or look to increase sales from occasional buyers?
Can we reach customers ‘priced out’ of the market?
What about premium-minded spenders?
In Mohawk’s case, answers included establishing more
direct contact with end-users, which meant a whole new
world for the sales staff.There’s now a focus on selling to the
end customer rather than to wholesalers/distributors. New
customer categories include professional photographers and
consumers through custom photography printing products.
Finance-driven innovation is based on new kinds of
revenue streams, cost structures, and pricing mechanisms
can also unlock new markets. Questions include:
What other ‘methods of use’ are available to our
customers? (i.e., rent, lease, sell, subscription)
How would reducing or increasing the average time
between purchases or the average dollar amount spent
on a purchase impact our business model?
What kinds of cost structures does the company rely
on that we can change (scope, scale)?
For Mohawk, serving smaller orders directly addressed
this perspective.The company’s new online photo sharing
business opened a new revenue stream
from the consumer world.The company’s
website offering printing services for
calendars and books has entirely new
pricing mechanisms to serve a previously
unfamiliar market, as Mohawk used to
be solely focused on large publishers and
wholesalers.
Resource-driven innovation originates
from an organization’s existing infrastructure
or partnerships to expand or transform the
business model.Questions include:
What is our most important asset?
How might that asset be used to satisfy
new market needs?
A longtime supplier to the printing
industry, Mohawk used its expertise in
printing to expand into materials other
than paper. For example, the company
bought a plastics company that sells
magnets and signs customized with photos,
a product line with a higher profit margin
than paper.
As brainstorming wraps up, participants discuss which
ideas seem the most likely to produce changes that can
transform the business. The next step is to develop an
implementation plan that could radically transform the
company in as quickly as a few months.
THE NEW MOHAWK
With a revamped business model, Mohawk is a
profoundly changed organization. That is symbolized
by a decision to drop “Fine Papers” from its name on all
its marketing materials and corporate communications
media. Branding itself simply as “Mohawk,” the company,
A LONGTIME
SUPPLIER TO
THE PRINTING
INDUSTRY,
MOHAWK
USED ITS
EXPERTISE IN
PRINTING TO
EXPAND INTO
MATERIALS
OTHER THAN
PAPER
25. SUMMER 2013 INSIGNIAM QUARTERLY 23
which was already dabbling in e-commerce, went all in last
year — providing more online options aimed at creating
“a seamless purchasing experience for all customers from
merchants to printers to small businesses,” the company
says.This strategy lets Mohawk fulfill small orders that are
not profitable for their distributors.
“The distributor continues to be a channel partner,
but we have many new customers now,” O’Connor says.
Mohawk also consolidated its core paper lines, taking 22
paper grades (brands) down to six, making for a simpler,
clearer presentation of brands and products to customers.
Mohawk is now smaller and makes fewer products, but
is more profitable than it has ever been. Between 2011 and
2012, Mohawk reduced its top line by $50 million, but
increased operating profit by 26 percent through a strategy
that includes selling higher margin products.
Mohawk’s oldest premium grade paper is called
Superfine. It was introduced in 1945 and is the paper-
of-choice for the finest limited edition books, illustrated
art books, museum catalogs and corporate literature
— like annual reports. In 2012, Superfine experienced
a 51% sales growth, due in part to the growing digital
print market and a unique product enhancement — a
proprietary surface treatment called i-Tone — which
improves ink performance on Superfine when run on
digital press equipment.
That the company could make critical course
corrections quickly is a testament to the ability of top brass
to analyze industry turmoil and then create and implement
a transformative business model.
GregoryTrueblood is a California-based Insigniam consultant.
Mohawk used
its expertise in
printing to expand
into markets other
than paper, like
buying a plastics
company and
offering magnets
and signs, a
product line with
a higher profit
margin than paper.
26. SUMMER 201324 INSIGNIAM QUARTERLY
G
General Motors. There may not
be another company in the last 20
years that was in more desperate
need of a transformation than
the auto giant. Having once sold
enough cars to make up more than
50 percent of the U.S auto market,
the company became the picture of
“too big to fail”and lost nearly $40 billion in 2007.
Bob Lutz had a unique vantage point.As a member of the GM executive team,
he was inside the C-suite and saw how CEO Rick Wagoner tried to turn things
around.In Lutz’s new book — Icons and Idiots:StraightTalk on Leadership — he looks
back at his almost 50 years in the car business and the good, bad, and ugly of the
leaders he worked for.
This excerpt is from Lutz’s chapter onWagoner,a good leader that Lutz says was
crippled by bad timing, bad luck, and a company that was still weighed down by
unnecessary costs.
In his new book, former GM Vice Chairman Bob
Lutz takes a hard look at the auto giant and shares
some thoughts on the leadership of its former
CEO Rick Wagoner and what might have caused
the once mighty industry leader to fall.
CRIPPLED BY PROCESS
BY JARRETT RUSH
27. SUMMER 2013 INSIGNIAM QUARTERLY 25
It’s tough to write about Rick Wagoner, mostly because I
like him so much. In contrast to other executives I’ve known
in my career, Rick Wagoner showed little in the way of
“peculiarities.”As a leader,he was always polite,kind,and ready
to hear opposing views without anger or even visible irritation.
His executive suite was modest, as was his style: he eschewed
executive trappings and even excessive compensation,
believing, correctly, that he was not an imperial ruler but a
servant of the shareholders and thus simply a hired hand.
All of this genuine humility, devotion to the company,
and self-effacement was improbably packaged into a physical
presence that suggested the opposite: Rick stood a square-
shouldered six foot five, with no visible fat.A lifelong athlete,
he had played freshman basketball at Duke University and
earned a degree in economics in 1975. He attended Harvard
Business School and received his
MBA in 1977.
Rick then joined GM as an analyst
in the New York Treasury Office, or
NYTO. This operation, far removed
from the automobile business as
most of us know it, has long been the
breeding ground for future GM CEOs. In
fact, in the pantheon of former GM CEOs
in my memory, only one non-Treasury
Office executive was ever able to wrest the
brass ring from the eternal clutches of the
bean counters, and that was Bob Stempel,
an engineer. His tenure ended badly and
abruptly, so the selection criteria went right
back to “T.O. alumni only ... others need
not apply.”
Wagoner’s rise was rapid; he headed
GM’s important Brazilian operation in the
mid-1980s. He became GM’s youngest
chief financial officer in 1992 and president
of North American Operations in 1994.In
1998, he assumed chief operating officer
responsibility, serving under CEO Jack
Smith.
It was during his years teamed with Jack that Rick did
some of his finest, yet little-heralded, work. GM at the time
was known onWall Street as a “great destroyer of capital,” and
it was true. Huge, unwieldy, duplicative in all it did, GM had,
over the years, developed a self-perpetuating, self-reinforcing,
and self-nourishing bureaucracy that cost more and more and
produced less and less.
Jack and Rick realized that the situation was unsustainable.
They set about with enormous determination and energy
whittling the gluttonous organization down to size.
This is not the glamorous part of the car business, the part
where one creates new styles,sees them through to production,
attends introduction meetings, and speaks before enthusiastic
dealers or an interested press. No, the restructuring effort is a
dirty, nasty business: eliminating divisions, groups, functions,
titles,most held by longtime colleagues
and friends. Countless weeks were
spent listening to counterproposals, or
to why the“other guys”should be shut
down, not one’s own operation.There
were no thanks, no cheering, and little
attention from the media. It was just
GM AT THE TIME WAS
KNOWN ON WALL STREET
AS A “GREAT DESTROYER
OF CAPITAL”
GM had, over the
years, developed a
self-perpetuating,
self-reinforcing,
and self-nourshing
bureaucracy that
cost more and
more and produced
less and less.
28. SUMMER 201326 INSIGNIAM QUARTERLY
endless drudgery, like hacking through a piece of property
covered in underbrush with surgical instruments, trimming
away the unwanted weeds while carefully maintaining
operational capability.It was like,as one wag once commented,
“rewiring a Boeing 747 in flight.”
The effort, arduous and long as it was, proved successful.
Several engineering groups became one. Fourteen different
purchasing organizations were unified, bringing procurement
discipline to GM for the first time ever. Organizationally, GM
was the equivalent of a 350-pound man who had painfully
shed 150 pounds.
Rick’s ability to argue,persuade,and persist was instrumental
in the relative success of the “back to basics” initiative. It
was, perhaps, inevitable, given the extreme focus of the two
top executives on the restructuring effort, that the actual
“automobile business” part of the corporation was delegated
to lower operating levels and did not receive the extent of
senior management attention that I have always maintained
is necessary for success. GM had, in fact, a recent history of
introducing cars that were mediocre, mostly
competitive but without a clear-cut purpose
or “reason to buy.” To me, it was a fairly
clear case of an essentially unsupervised
organization with no cogent direction that
found consensus among the various internal
stakeholders and produced vehicles that met
the all-important internal targets but failed to
resonate with customers.
The lack of true product focus and the
damage it can cause had not always been
evident to Rick Wagoner. In one interview
during the 1990s, when asked why GM had
so many finance people in top positions and,
apparently, no “product guy,” Rick carefully
explained that this “product guy thing” was
vastly overrated: if you had good designers,
good engineers, and good manufacturing
people, they would ensure product success. I
remember reading that interview and thinking
“... and symphony orchestras don’t need
conductors, and professional sports teams can
do without coaches.”It just doesn’t work.
Many product disappointments and outright
flops later, Rick, not a “car guy” himself
but enormously intelligent, realized that a
key element was missing and, to everyone’s
amazement, hired me as vice chairman for
Product Development.
My appointment put lie to the oft-cited “incrementalism”
and“caution”attributed to Rick.Those two traits were indeed
significant, but Rick was also comfortable with the occasional
bold,strategic move,even if it entailed risk.Bringing someone
like me on board who was critical, vocal, opinionated, direct,
a willing object of media attention, and capable at times of
eclipsing less visible bosses was contentious in the GM system,
and many of the “lifers” predicted chaos and disaster resulting
from my tenure.
Rick Wagoner’s support of my efforts to revitalize product
development was exemplary, a clear demonstration of one
of his most endearing characteristics: steadfast loyalty to his
handpicked subordinates, leaving them with the certainty of
the boss’s backing.Sadly,this otherwise laudable leadership trait
can cut in both directions:Rick,in many instances,was devoid
of objectivity when it came to people with whom he had
served a long time, who had moved up the ranks with him,
or whom he had known as early as his Treasury Office days.
It was painful to see Rick protect and support many officers
29. SUMMER 2013 INSIGNIAM QUARTERLY 27
who, to my eyes, personified the large corporation culture of
“look good,sound good,prepare well for meetings,and never
disagree with the boss.”
It wasn’t until after Rick’s departure in 2009 that the
hammer fell on many of these experienced, slick, intelligent,
but ultimately near-useless members of the Wagoner team.A
collective sigh of relief marked their departures,
Rick was definitely a procedural executive. He was blessed
with truly exceptional intelligence, mostly left-brain analytical
but,unlike in Red Poling,combined with an understanding of
right-brain value. Rick liked to reduce complex interlocking
issues to understandable, repeatable processes. Given the
impenetrable thicket and lack of executive discipline that he
inherited, this unquestionably provided clarity and value.
The good thing about focusing on process is that it ensures
repeatability and predictability.
The bad thing about over-focusing
on process is that it discourages
creativity, experimentation, and new
solutions. Yet, in large organizations,
many derive comfort from following
“the process,” even if they know the
result will be mediocre at best. Rick,
with his well-ordered mind, liked
process and was not comfortable in its
absence.
On one occasion, eager to show Rick
the benefit of free-flowing creativity, I
asked Design to put on a presentation
of any and all ideas for future vehicles
the most talented of the designers could
come up with for new, untried ways to
put the public on four wheels. It was a great exercise, and as
always in acts of spontaneous creation, no “focus groups” had
been involved because they could no more have imagined
these cars than focus groups of cell phone users could have
come up with the iPhone.
We presented it all to Rick,who was fascinated.He just had
one question: “How do we know whether these directions
we’re going in are correct?” I assured him that we would all
recognize a potential home run if we saw one, but that these
“what if’’proposals had to be seen as the products of the
fertile imagination of talented designers; they were not firm
“product proposals” but rather “thought provokers” or “idea
starters.” Rick still had a problem. How did we know we
were exploring in the right direction? He then outlined his
idea:What if we were to create a high-level panel of leading
thinkers, artists, architects, fashion designers, people who were
young, sharp, cool, and trendy? Expose them to these design
“stimuli”in a scientific way,tabulate the results,and we would
soon see if we were headed in the right direction.
“Rick,”I said,“here we are trying to demonstrate one way to
generate new ideas through an unfiltered creative process. But
you are so quantitatively data focused, you immediately want
to measure,sift,analyze,and generally left-brain-control what is
supposed to be a pure right-brain exercise.” Rick laughed and
said,“I guess you’re right....I always want to see data.”
And see data he did. Under Rick’s leadership, many
quantified “metrics” were established and pursued, the theory
being that if we succeeded in achieving every operational goal,
success as a car company would be ours.Thus, the company
relentlessly pursued “Assembly Hours per Car” (which drove
the manufacturing people to move a lot of subassemblies out of
the plants to suppliers,at a higher cost) and“Time to Market,”
a metric that drove some half-baked
“solutions” like the Pontiac Aztek, the
rapidly developed answer to a question
nobody had asked. A compliant team
of executives will usually compromise
common sense and judgment (both hard
to explain) in the interest of “making
the objective,” for therein lies safety,
approval, and possible advancement.
We had metrics on “Average Cost per
Stamping Die,”“Bill of Material Reuse”
(percentage of known, trusted parts from
the previous model incorporated in the
new one),and“Percentage of the Supply
Base in New Sources” (a euphemism for
countries like China,Taiwan,etc.).
All of these initiatives, and there were dozens, are in and
of themselves useful. But too much emphasis on them in the
case of personnel evaluations and/or compensation will just
about guarantee that the organization will find ways to hit (or
even beat) every single metric without any real operational
improvement, cost reduction, or improvement in timing
having taken place.Of particular concern to me was the lack
of focus on product excellence.To be sure, you can create
a car with a 90 percent BOM (Bill of Materials Reuse),
develop it quickly using low-cost dies with components
from “New Sources,” and assemble it in 18 man-hours. But
is this a car that will be successful, will wow the customer
with styling and features? Or is it just a “numbers car” — a
vehicle that met all internal criteria, but failed to resonate
in the marketplace? In GM’s case, it was, with depressing
regularity,the latter.
31. ING DAD N NEO
Putting consumers rst — even inviting
them into the R&D process — has helped
the French food products multinational
grow beyond $26 billion in revenues
SUMMER 2013 INSIGNIAM QUARTERLY 29SUMMER 2013 INSIIIGNIAGG M QUARTERLY 29
32. SUMMER 201330 INSIGNIAM QUARTERLY
where there’s strong demand for bottled water and products
in Danone’s three other major divisions:Fresh Dairy Products,
Baby Nutrition,and Medical Nutrition.
COLLECTIVE AMBITION
Transforming not just the waters group but the entire
enterprise of Danone required companywide buy-in.
Executives from various divisions got together with the
goal of defining the company’s values and developing a set
of “leadership ingredients,” principles represented by the
acronym CODE: committed, open, doer, empowered. Next,
the process was expanded to include all employees.
“Everyone, from the top executives to people out in the
field to assistants, had the opportunity to contribute to the
vision for the company and its transformation journey,”
Penchienati says. “Sharing that ambition creates strength.
We said,‘This is the future we want to build.What are the
different steps we can take to achieve it together?’”
Various transformation projects were identified and
prioritized, with multifunctional teams assigned to each.
Employees at all levels were given the opportunity to
In addition to its world leadership in fresh dairy products,
Danone is one of the major players duking it out to quench
the thirst of consumers. The industry has a current global
market value of more than $60 billion and continues to grow
briskly. Its success — No. 2 globally, behind Nestlé —helped
make Danone a Pepsico buyout target in the mid-2000s.
(That, in turn, sparked an uproar among French politicians,
who were eager to hang on to their national treasure.)
Danone had just fended off the hostile takeover when the
economic recession hit. Instead of becoming paralyzed by
challenges,the company responded by pursuing an enterprise-
wide transformation, a process that involved change at the
individual,strategic,and organizational levels.
“We wanted to create a new strategy for the company,
never really thinking of the crisis but thinking only of the
future,” says Véronique Penchienati, general manager of
Danone Waters France in Paris.“We said,‘Let’s leave behind
our fears and doubts,and let’s follow our intuition and desires
for what we want to be as a company.’”
At the time,Danone also was beginning to ramp up global
expansion, particularly in emerging, high-growth countries,
Founded in 1899 and based in Paris
PRODUCES AND DISTRIBUTES PRODUCTS
WORLDWIDETHROUGH FOUR OPERATING
DIVISIONS: Fresh Dairy Products, Waters, Baby
Nutrition, and Medical Nutrition
MAJOR BRANDS: Evian, Volvic, and Aqua waters;
Dannon line of yogurts (Activa, Danimals, Oikos);
Fortimel and Nutricia nutrition products
EMPLOYEES: About 100,000 worldwide
2012 SALES: €20 billion ($26.7 billion)
For companies like Danone — the food
products multinational based in Paris and
maker of brands like Evian andVolvic —
bottled water has become liquid gold.
produc
DANONE
33. SUMMER 2013 INSIGNIAM QUARTERLY 31
participate, encouraging dialogue,
knowledge-sharing, and creativity, and
strengthening the sense of collective
ambition.
INNOVATE EVERYWHERE
For Penchienati, the transformation
process catalyzed one burning imperative
in her mind — innovate everywhere.
That means innovation in everything
from the way products come to
market to connecting with consumers
and including them in the circle of
innovation.
Consistent with its mission of“bringing
health through food to as many people as
possible,” Danone’s products are designed
to promote health and nutrition across all
age groups and cultures.Instead of trying
to predict what people want or presume
their habits, Danone went directly to
the source and made consumers part of
some of its R&D teams.
THREE FOCUSES
FOR THE FUTURE
Looking ahead, Penchienati says
Danone is focused on three key things:
ongoing innovation, connecting with
consumers, and adapting, whether that
means new markets, consumer trends,
or business conditions. “We need to be
a step ahead of what is happening, so
we can continue to lead our own transformation,” she says.
“That is a key challenge and a key motivation.”
FOR PENCHIENATI AND THE WATERS GROUP
THAT MEANS:
Focusing on products — This means not just a
focus on marketing or package design, but also how
those products are made.
Danone has expanded a program that started in
1992 around the Evian spring. Danone worked
with local stakeholders to make sure that non-
polluting businesses were encouraged and supported
around the spring’s catchment area.That model was
expanded to include other springs that supply other
brands in the waters group.
TOP: In addition to its fresh dairy products, Danone is one
of the major players duking it out to quench the thirst of
consumers worldwide.
BOTTOM: Véronique Penchienati, general manager of Danone
Waters France
34. SUMMER 201332 INSIGNIAM QUARTERLY
To spur the cultural shift and enterprise
transformation at Danone, Insigniam
developed a “leadership college” that
brought together executive management
in cross-operational areas on multiple
levels. The “coursework?” A set of
principles developed by the company’s
senior executives that they called
“leadership ingredients.” These key
qualities were represented by the acronym
CODE —Committed, Open, Doer,
Empowered.
Sharing the recipe for transformation
with other managers was an equally
important task. To begin, the executive
management group saw each country’s
business unit (CBU) as an independent
opportunity for improvement and growth.
The culminating effect would result in
overall transformation.
The program helped headquarters build
strong rapport with the general managers
at each CBU, starting discussions from the
individual unit’s mindset and priorities.
By coming together for conversations
and training, leaders created a
strategic framework to help various
units and managers reach strategic
alignment. These managers
now had actionable tools to craft
a turnaround within their unit.
Breakthrough thinking allowed
them to view themselves not only
as in charge of a business, but as
ambassadors of a new culture.They
would now act as cultural referees,
watching their employees perform
their roles and encouraging them
to take on new attitudes, change
limiting work habits, and the like.
The Leadership
College: Building
a framework for
transformation
Danone is also working with consumers around the world to
preserve local resources, that includes planting — with the
help of 420,000 school children and parents in Poland — 1
million trees in the mountains where leading water brand
Žywiec Zdrój is collected.
This is in-line with another enterprise transformation outcome:
a company-wide movement to reduce its carbon footprint.
Danone has done that by a whopping 40 percent, across all brands,
between 2008 and 2012. “It’s a source of pride for all Danoners, as
everyone took part, from packaging to logistics,” Penchienati says.
“We want to continue to grow the company, but in a sustainable
way. That’s the core of our company and our uniqueness.”
Creating a dialogue — Penchienati is determined that
the France Danone waters group create a dialogue with its
consumers. Like her counterparts in Danone Latin America
Waters, she wants the waters group to be able to adapt with the
needs of the communities it serves as those needs change.
For example, their key Latin American brands, Bonafont con
Jugo in Mexico and Villa del Sur Levité in Argentina, created
a completely new segment of flavored waters, or aquadrinks
by making the time and investment to
dialogue with consumers. The consumer in
Latin America is drawn to soda drinks. The
huge marketing investments of behemoths
Coke and Pepsi created a “thirst” for
carbonated beverages that overshadowed
anyofDanone’straditional,noncarbonated
offers. These new drinks created a new
segment, one that simply didn’t exist
yet quickly attracted customers who
were traditionally soda drinkers.
Sales of Villa del Sur Levité have
tripled since 2008, and in 2011
the brand became Argentina’s
No. 2 non-alcoholic beverage
by volume.
P r o m o t i n g
hydration — Penchienati
says that the waters group also
recognizes its responsibility
to promote hydration beyond
its brands.
An outreach program in the
waters group, Hydration for
Health (H4H), was developed
to expand consumer-
company dialogue. Most
nutrition programs typically
equally
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ountry’s
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growth.
esult in
ers build
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dialogue with
Latin America
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35. SUMMER 2013 INSIGNIAM QUARTERLY 33
focus on food intake, but
the quantity and quality of
fluids people drink every
day can have a significant
impact on their wellbeing.
H4H is a robust initiative
that involves educational
programs and tools
(including an iPhone app), scientific research and
conferences, an awards program, and an online hub
for health professionals. All employees are given the
opportunity to go out into the field, once they’re
trained, and educate and engage with consumers.
“We have been doing this for two years, and this year
we had more than 150 Danoners who took part in
the program,” Penchienati says. “Connecting with
consumers, having real conversations with them and
keeping them connected, is very important.”
BOTTOM-LINE IMPACT
The H4H program has helped enhance Danone’s stature
as a leader in the public health realm—and in the über-
competitive waters market. In 2012, the company’s waters
division saw a 10 percent increase in sales, to €3.6 billion
(the equivalent of $4.6 billion in U.S. dollars). That bottom-
line success has been replicated in Danone’s other divisions,
Fresh Dairy Products (up 2 percent), Baby Nutrition (up
11.6 percent), and Medical Nutrition (up 5.9 percent).
Last year, the company cracked
€20 billion in revenue (€20.9
billion, or $26.7 billion) for the
first time. A significant part of that
growth has come from emerging,
non-European markets, what
Danone calls the “MICRUB”
countries—Mexico, Indonesia,
China, Russia, the United States, and Brazil. In 2012,
the company saw 51 percent of revenues from these non-
European countries. For 2013, Danone is shooting for
worldwide sales growth of at least 5 percent, and to keep
cash flow steady at about €20 billion.
It aims to achieve this by cutting costs and chasing profits
versus market share. Barron’s reports that this change in
strategy could lead to robust profit starting in 2014, and
a powerful rally in Danone’s shares. The company has
the right ingredients for success, with both cultural and
demographic trends supporting strong demand for products
in all four of its business lines.
Penchienati, who has held various roles at Danone
since 1999, says the intentional focus on change and
the widespread participation were critical factors in the
reinvention process. “Two or three years ago, this was just
an idea on paper; now it is reality, a part of real life,” she
says. “It’s the greatest pride for all Danoners to see what
we have accomplished together. We’re very proud of the
business results—and the way we achieved them.”
INDIVIDUAL
TRANSFORMATION
When one shifts the way in which
they view the world, as well as
their view of their colleagues,
business, and assumptions
about how things seem to be, the
individual gains access to new
possibilities, opportunities, and
interpretations that can produce
extraordinary breakthroughs in
thinking, action, and results.
STRATEGIC
TRANSFORMATION
Most commonly, the speed
of change of companies
trails the speed of change
of the marketplace. Aligning
commitments of the business
with the requirements of the
existing and future marketplace
helps the enterprise be a
match for the market and be a
leader setting the pace in the
competitive landscape.
ORGANIZATIONAL
TRANSFORMATION
Aligning the structures,
processes and procedures, ways
of doing business, and corporate
culture with a new commitment
and future for the business
provides pathways for individuals
and groups to generate new
ways of working, innovative
approaches to doing business,
and greater opportunity to be
a match for the needs of the
market and the customer.
Source: Insigniam
Enterprise-wideTransformation
IT’S THE GREATEST PRIDE
FOR ALL DANONERS
TO SEE WHAT WE HAVE
ACCOMPLISHED TOGETHER
36. SUMMER 201334 INSIGNIAM QUARTERLY
We found that when it comes to how company
leaders spend their time, it’s all talk.
BY SHIDEH SEDGH BINA
AND ERICA M. WOOD
2013 EXECUTIVE
SHADOWING STUDY
37. SUMMER 2013 INSIGNIAM QUARTERLY 35
how can executives and senior leaders reduce their current
workloads and invest more time in generating innovation
and creating greater value for customers? Insigniam
consultants shadowed 15 leaders from a health care system
— including President, EVP,VP and directors — for three
days to capture a minute-by-minute,behind-the-scenes look
at how they spent their time in order to determine how
to increase efficiencies. It quickly became evident that the
findings from this study would not be specific to healthcare
executives but were common to executives from practically
all industries.
SUMMARY OF KEY FINDINGS
The fundamental core of the work throughout the
day for the executives was interaction with other people.
Whether those interactions were via emails, meetings,
reading reports, conference and video calls, fielding phone
calls and voicemails or casual interactions in the halls, 100%
of the executives’time was spent in one kind of conversation
or another,the majority being unplanned.
Insigniam discovered that there were quite a few internal
practices in managing these interactions that could be
installed to help executives reclaim some hours in the day,
including inefficient meeting management and a lack of
email and activity protocol.
66% of scheduled meetings attended were not
meetings led by the executive.
Email took up a large amount of executives’ time
due to the volume of messages that needed to be read
and answered. Open-door policies also contributed to
executives being interrupted.
48% of tasks that could be delegated were not,because
leaders felt it was quicker to complete tasks themselves
rather than hand them off to someone else.
Leaders also did not schedule time for themselves to
complete tasks that were asked of them and relied on
their memories for meeting content and to follow up
on requests.
1,339 hours of all employee time — not just
executives — was spent in
meetings. This adds up to 140
10-hour workdays over the
45 day period that Insigniam
shadowed these executives.
Insigniam concluded that
implementation of a few additional
effective, efficient practices would free up more time for
the leaders.These practices included:
“No meeting time zones”for director-level and above
System-wide meeting management protocol
A standard slot of time for system-wide activities (i.e.
rounding,office hours)
System-wide email protocol
Scheduling and honoring time to complete tasks and
preparations for meetings,travel,etc.
Structures for rising leaders to take on certain tasks
TIME
On average, each of the leaders that Insigniam shadowed
worked 10 hours per day.Their average daily start time was
7:30 a.m. and the average daily end time was 5:30 p.m. In
addition,46% of leaders devoted between 30 and 90 minutes
to daily travel.
However, 28% of leaders spent at least 30 minutes
working at night and 41% spent at least 30 minutes working
on the weekends. Leaders typically used this time to read
and respond to emails that they were unable to attend to
during the day or the workweek.
INTERACTIONS
Insigniam observed 81 planned one-on-one interactions,
130 unplanned one-on-one interactions,33 planned
meetings with 15 or more participants,three unplanned
meetings with 15 or more participants,68 planned meetings
with between three and 14 participants,and 22 unplanned
meetings with between three and 14 participants.
More than half of the executives’ interactions were
unplanned or interruptions, and 63% of them involved
face-to-face contact or an in-person meeting. Multitasking
was only observed in 5% of interactions, and 91% of those
multitasking activities were reading or responding to emails.
TYPES OF INTERACTIONS
26% percent of the interactions were short, between one
and four minutes. However, longer interactions between
30 and 44 minutes and 60 and 90
minutes accounted for 10% and 12%,
respectively.
The total time for all the
participants in the meetings observed
over the 45 day period — including
all planned or unplanned interactions
ON AVERAGE, EACH OF THE
LEADERS THAT INSIGNIAM
SHADOWED WORKED 10
HOURS PER DAY
THE CHALLENGE:
38. SUMMER 201336 INSIGNIAM QUARTERLY
involving three or more people — occupied 1,339 hours
of total employee time, which is the equivalent to
140 10-hour workdays.
LENGTH OF INTERACTION
In terms of delegation,95% of observed interactions were
required to be done by the person who was being shadowed.
Ninety percent of requests were also required to be brought
to that person.When asked why the request or interaction
could not be delegated, 48% of executives responded that
they thought it would be more efficient if they did it
themselves.
CONCLUSIONS AND RECOMMENDATIONS
Through shadowing these executives,
Insigniam was able to determine a
number of recommendations that created
opportunities for increased efficiencies in
the workplace, allowing executives the
chance to free up time from less critical
activities and focus their efforts on ways to
innovate, improve business practices, and
work on developing new leaders.
MEETING TIME
Meetings occupied 1,339 hours of
total employee time over the 45-day
period executives were observed. In 66%
of meetings attended, the leaders did
not lead the meeting. In many instances,
leaders were at meetings as non-interactive
participants, in attendance to be aware of
information rather than offer insight.
Implementing meeting management
practices would have a material impact on
freeing up time. A “no meeting time zone” was suggested
for director-level employees and above so that leaders
could have dedicated time for focus on innovation, talent
development, and more. Other practices include basic, yet
often overlooked,principles for meeting management:
Sending an agenda with the meeting invitation to
determine need for attendance
Communicating about meeting attendance necessity
Sending detailed minutes of meetings so that
attendance for information is not mandatory
Sending a representative who can take detailed notes
and relay information to whomever necessary
EMAILING
The mass of emails to read and respond to was also
occupying large amounts of time.System-wide email protocol
is another lever for freeing up time.
Possible practice: Setting expectations in the email by using
terms such as Request, Inform, Urgent, Delivery, Response, Share,
Offer, orAction in the subject line of each email.In the first line
of the email include dates for delivery of response for the email,
or include if no response is required.
CONTROL OF TIME
Many of the leaders we shadowed did not schedule time to
complete tasks that were asked of them.They very often relied
on their memory for meeting content and to follow up on
requests.
Possible practices: scheduling as “do not
disturb” meeting time in the calendar for
work that has to get done such as planning
and prep time, travel time, and other action
items.
INTERRUPTIONS
Many leaders worked with an open door
policy, inviting interruption. Unanimously,
this was done so that their staff felt taken
care of and heard. Many leaders worked
reactively rather than proactively.
Possible practice: Implementing daily or
weekly office hours would allow for leaders
to maintain this open door atmosphere
while honoring their calendars and other
accountabilities.
DELEGATING TASKS
Forty-eight percent of interactions that
could be delegated were not. Using the justification that “I
can do it faster,”most leaders thought it to be more efficient to
complete it themselves,rather than turn it over to someone else.
Within each department shadowed,there were several rising
leaders. Creating structures and practices for these leaders to
take on secondary tasks would create more time and openings
for those we shadowed to focus on primary accountabilities.
That’s where change starts. For executives in all industries,
time is literally money.With a few adjustments to how those
leaders use their time — like implementing standard, system-
wide protocols and delegating tasks that can be done by others
— they can spend that capital more wisely, reinvesting it in
creating innovation and value for customers.
OF THE
INTERACTIONS
WERE SHORT,
BETWEEN ONE
AND FOUR
MINUTES
26%
39. SUMMER 2013 INSIGNIAM QUARTERLY 37
KINDS OF INTERACTIONS
1-4 minutes
5-9 minutes
60-90 minutes
10-14 minutes
30-44 minutes
15-19 minutes
45-59 minutes
20-24 minutes
91-120 minutes
25-29 minutes
3+ hours
Thought it would
be more efficient
if I did it
They aren’t
available
Don’t Know
Don’t trust them
to do it right
TIME SPENT WORKING AT NIGHT
None
< 30 Minutes
61-91 Minutes
2-3 Hours
30-60 Minutes None
30-60 Minutes
61-91 Minutes
91-120 Minutes
2-3 Hours
< 30 Minutes
TIME SPENT WORKING ON THE WEEKEND
KINDS OF INTERACTIONS
Planned Unplanned Interruption Face to Face
Meeting: Live
Teleconference
Prep
Phone
Email
TYPES OF INTERACTIONS
REASON FOR NOT DELEGATING
39%
53%
43% 44%
26%
48%
41%
19%
12%
11%
10%
5%
5%
4%
4% 7%
3%
2%2%
19%
1%
9%
11%
16%
42%
15%
11%
12%
12%
6%
6%
6%
11%
11%
33%
40. BY SHIDEH SEDGH BINA
CHEW
CAREFULLY
Successfully merging two companies requires a careful
examination of the ingredients and how they work together
so as to prevent a case of heartburn down the road.
41. INSIGNIAM QUARTERLY 39
en years is a long time to
suffer from indigestion.
But that’s just what the
GM of a Hong Kong
company says happened
to him in the decade that
followed his company’s
several hundred million
dollar acquisition by an
international media company based in North America. On
paper, the deal promised to open new markets around the
world and deliver huge economies of scale for the merged
entity. And, yet, after the merger, the combined company
struggled to achieve the financial results that had been
expected. What went wrong? “The (American) company
came in and ate us,”says the Hong Kong executive.“But even
10 years later they still haven’t digested us.”
Plenty of executives who’ve been through M&A deals can
likely relate to that uneasy, queasy feeling. Combining two
different firms can often seem like a great idea on paper, but
too often — and for far too long — the execution of those
deals has failed. Consider the evidence from just a few of the
studies of M&A aftermath.
1970s: A Federal Trade Commission study finds that most
M&A deals done in the mid-1970s resulted mainly in steep
declines in operating profits among the merged firms.
1990s: A study by researchers at Southern Methodist
University found that, from 1990 to 1997, in mergers worth
$100 million or more, just 11% of the deals produced their
anticipated revenue gains.
2000s: A 2004 Bain & Company survey found 70%
of mergers and acquisitions produced only declines to
shareholder value.More recently,a 2007 study by Hay Group,
a management consulting firm,and
the Sorbonne, found that more
than 90% of corporate mergers and
acquisitions in Europe didn’t meet
their objectives. That study, titled
“Dangerous Liaisons,” concluded
that mergers and acquisitions failed,
in large part,because the combined
companies didn’t adequately address corporate culture issues.
That’s exactly what happened to the Hong Kong executive
whose company hadn’t been digested properly.The cultural
differences between the Asian and western companies
were barely addressed prior to the firms’ combination.
Unfortunately, that, too, is not uncommon in M&A deals.
Indeed, Hay Group found that only 27% of the companies
it surveyed had bothered to analyze the cultural compatibility
of the firms they were planning on combining.
And that was true even though more than half the
companies Hay Group surveyed said they believed neglecting
to audit“non-financial assets”— including culture — would
put any M&A deal at risk of failure.
Think about that for a second.Executives are smart people.
They know that M&A deals are driven by economics, that
they need to provide some kind of scale in operations, or
opening access to new markets. But many executives also
profess to know that the success of these combinations depend
on the work of the people in each organization. In practical
reality,mergers and acquisitions have a profound and material
impact on the people in both of the combining companies
— from the senior leadership to the frontline worker.Written
and unwritten rules change, strategy is often dramatically
altered,new managers are put into new jobs with new teams,
different leadership styles, changes in compensation, the list
of variables that impact the mindset, the culture and thereby
the performance of people in any enterprise is miles long.
Any executive can tell you about these dependencies and
ramifications. So why, then, does 85% of the money spent in
closing M&A deals go to assessing financial and operational
integration,while just 15% is spent on assessing people issues?
The answer may be that executives know how to crunch
the data on the value of their hard assets but are often
uncertain how to gauge their more
intangible assets, like their people
and their culture.The Hay Group
certainly found that to be true. It’s
survey found that 70% of executives
believed it is too hard to get good
insight into the corporate culture
of companies they’re looking to do
T
ONLY 27% OF THE
COMPANIES HAY GROUP
SURVEYED HAD BOTHERED
TO ANALYZE THE CULTURAL
COMPATIBILITY
SUMMER 2013
42. 40 INSIGNIAM QUARTERLY
M&A deals with.
And, yes, it is hard. It takes time
and energy and focus (and, of course,
money) to figure out the cultural
concerns of a M&A deal and to get
those cultural issues on track before
the two firms legally combine. But
it’s not impossible.And, it’s definitely
worth the investment.
AVOIDING INDIGESTION
When an M&A deal doesn’t
completely address cultural issues
during due diligence, just about
anything can go wrong. For instance,
one merging entity may simply impose a new strategy onto
the other. When that happens, the merged entity may find
itself with groups of employees working with conflicting
principles and frameworks for operating and,therefore,unable
to execute on common business objectives.
Something similar happened when Quaker Oats Co.
bought Snapple for $1.7 billion in 1994.Both firms wanted to
make money by selling beverages to consumers. But Quaker
valued a sales channel that focused on big volume sales in
supermarkets. Snapple derived practically all of its success
from its agile and entrepreneurial network of independent
distributors. In managing for economies of the new, larger
scale post-merger Quaker discarded Snapple’s independent
distributors.This led Snapple products to disappear from the
shelves of convenience stores and other small retailers that had
been diligently serviced by the independent distributors.And
that just happened to be where most Snapple beverages were
sold. No surprise, then, that a little more than two years later,
Quaker dumped Snapple back onto the open market for just
$300 million, taking a $1 billion write-off, the largest by any
business up to that time and virtually destroying the career
of then Quaker CEO William Smithburg. Quaker never
recovered it’s footing and was eventually bought by PepsiCo.
There’s a way to get better alignment around shared
values in a post-M&A environment. Start with a team of
key stakeholders — not just C-suite executives — from both
companies and task them with creating a new company
with a newly constituted
culture.The process works
in five phases. In brief,
they are:
PHASE 1: STRATEGY
/ LEADERSHIP
CULTURE
ASSESSMENT
Gather input from a
wide range of stakeholders
Quaker Oats’
purchase of Snapple
is a perfect example
of how to not
execute an M&A
project.The failed
merger cost Quaker
more than $1 billion.
1 LANGUAGE: Vocabulary, content, and key phrases
create a network of conversations that constitute the
enterprise.
2 CUSTOMER ORIENTATION: How is the customer
viewed, served and interacted with?
3 VALUES: What are the qualitative objectives? What is
held in high regard?
4 ACCOUNTABILITY: Are people organized for results,
processes, or tasks? What are the incentives?
5 TRADITIONS, RITUALS, AND ARTIFACTS: What are
status symbols? What gives a sense of belonging and
pride?
6 LEADERSHIP DYNAMICS: How does the workforce
view leaders, and what is the leadership style?
7 UNWRITTEN RULES FOR SUCCESS: What are the
taboos, status symbols, pathway to success?
8 DECISION RIGHTS AND PROCESS: Who makes what
decisions, at what pace and by
consulting whom?
9 LEGACY: Have there been any
close calls or major successes?
What were the founders’ values
and philosophy?
Distinctive Elements of
Corporate Culture
It is important to assess each of these nine
distinctive elements from three dimensions:
WHAT ARE THE
STATED/FORMAL
PRINCIPLES?
WHAT ARE THE
ACTUAL PRACTICES
WITH EACH
ELEMENT?
WHAT ARE THE
UNSPOKEN
BACKGROUND
DRIVERS?
1 2 3
SUMMER 2013
43. (who can be interviewed confidentially and with online
surveys) to understand the distinctive elements of the culture
of each legacy company. [See box at left] The report should
include the high value, high impact cultural assets of each
firm.This assessment of both company cultures can also be
done during due diligence to ascertain fit.
PHASE 2: MERGER LEADERSHIP COALITION
Create a coalition of leadership from both companies,
including leaders from different levels, broad geographies
and a variety of functions. The charge of the leadership
coalition is to lead, monitor and
execute the cultural integration.
Using the assessment and the assets
identified in the assessment as a
tool and together with executive
management, the leadership
coalition should come to a shared
understanding of a vision for the
new enterprise both in terms of
strategic objectives and aspirations.
Based on that, the leadership
coalition defines the broad
elements of the corporate culture
that can support the execution of
that strategic plan and intent.
PHASE 3: CULTURE
IMPLEMENTATION AND
ACID TEST
The Leadership Coalition drafts the cultural framework
for the vision, including a mission statement, a statement
of values, and principles. It sketches out the key culture
and implementation initiatives needed to accomplish the
breakthroughs that the new organization wants to achieve.
The cultural framework can be something completely new;
it can borrow from elements of the legacy companies or
can completely adopt the framework from one of the firms.
The key point is that this framework has been derived in
the context of the future of the new company and not as
an allegiance to the past. Once drafted, the coalition leads a
process with various stakeholders to refine and ratify the
cultural framework for the new company.
PHASE 4: CATALYTIC PROJECTS
Start implementing the new culture through a series
of short-term projects involving people from both of the
companies. The projects produce important measurable
results that would not be predictable without the combined
enterprise but can only be produced by reinforcing the new
culture. Some of the projects can be “people oriented,” such
as building new processes; some can have objectives that
realize the opportunity for enhanced value that instigated the
combination, such as capturing new markets or new product
development.
PHASE 5: ENROLLMENT CAMPAIGN: EMBEDDING
THE NEW CULTURE IN DAILY PRACTICES
The leadership coalition commissions a grass roots
team to launch a campaign to
engage the work force into
the new corporate culture.
People will need to know the
new organization’s values and
how it addresses their personal
needs. The most effective teams
have membership from all
the key constituencies in the
enterprise and represent different
geographies. Each member of
the team designs and executes a
campaign that they know would
be most effective with the group
they represent.In our experience,
these team members always
come up with more creative,low
cost activities than any corporate
group can conceive of. They
know how to engage the hearts and minds of their peers and
have credibility with their constituency. This is an essential
part of the process and will require constant monitoring. But
it ensures that, in the end, a truly new company with a new
understanding of its mission has been formed.
All of that may not sound much like the typical M&A.But,
remember, the typical M&A doesn’t generally work. Often
M&A deals are put together by teams of investment bankers
and top-level executives who are so focused on making the
numbers behind the deal attractive to investors that they don’t
adequately address the people inside the organization who
have to make the deal work. But guess what we’ve found in
mergers and acquisitions where corporate culture issues have
been made a top priority? In those deals, the overall success
rate of the M&A shoots up by a third. And that’s a bottom
line number that should make the bankers, the investors, the
executives,and everyone at the new company happy.
INSIGNIAM QUARTERLY 41
WHY DOES 85%
OF THE MONEY
SPENT IN CLOSING
M&A DEALS GO TO
ASSESSING FINANCIAL
AND OPERATIONAL
INTEGRATION, WHILE
JUST 15 PERCENT IS
SPENT ON ASSESSING
PEOPLE ISSUES?
SUMMER 2013
44. SUMMER 201342 INSIGNIAM QUARTERLY
1 2 3
8 97
Start with colored paper. Fold a square in half on the
diagonal one direction then
fold in half on the diagonal
the other way.
Fold up a little less than 1/3
from the top.
Pleat the beak in a little to
get that waterfowl look!
Another outside reverse
fold for the head.
Just taking a break here to
say how far the tail sticks
out all depends on step 2.
45. SUMMER 2013 INSIGNIAM QUARTERLY 43
4 5 6
By Jeff Wuorio
How Corning made sure that culture did not eat
its strategy for lunch
Grab the back flap and pull
down for the tail.
Fold the long edge up to
the top on each side.
Grab the inner flap and
reverse fold that puppy all
the way to the end of the
flap, so that it is even with
the bottom of the model.
Fold the model in half, and
turn 90 degrees.
Enjoy your transformation!
Reverse fold up the neck.
Part of neck is inside the
body.You know the neck
is done correctly when it
touches at the underlying
layers in the front.
46. SUMMER 201344 INSIGNIAM QUARTERLY
Part of Corning’s resurgence came as a result of
Volanakis’ leadership of the company’s entry into the
now-burgeoning liquid crystal display market. Corning’s
“gorilla glass” — a pliable and impact-resistant glass — is
found on more than 100 million mobile devices.
In both cases, Corning was in the heart of sweeping
change — one a struggle back from the edge of financial
collapse, the other a significant refocus of the company’s
developmental efforts. And, in both instances, culture
transformation was the philosophic and operational
flywheel that helped Corning chart a successful course.
“After the collapse of the telecommunications
industry, we had to reenergize our values and culture.
Our revenue had dropped from $7 billion to $3 billion in
just 18 months,” saysVolanakis, who spent nearly 30 years
in various positions with Corning. “When we started
the bendable glass project, there were no customers and
only a few notions of potential applications. Corning lost
money for 14 years in LCD glass before turning a profit.
“I think that tells you something about a culture that
encourages very large technology bets and sticking with
them even in the face of daunting losses.”
As president and chief
operating officer,Peter
Volanakis steered Corning
Inc.(NYSE:GLW) past a
brush with bankruptcy when
the telecommunications
industry imploded some 10
years ago.
47. SUMMER 2013 INSIGNIAM QUARTERLY 45
CULTURE’S CRITICAL TO TRANSFORMATION
Although it may have a simplistic bumper sticker
ring to it, the phrase “Culture eats strategy for lunch”
underscores the critical value of a company’s culture in
transformative environments. And, as Volanakis notes,
transformation doesn’t have to be characterized by
sweeping, dramatic types of change.
“Transformation is taking place constantly,” he
says. “Increasing your customer base is a form of
transformation.”
Looked at one way, culture transformation can be a
Corning’s “gorilla glass” is
on more than 100 million
mobile devices, but the
company lost money on
LCD glass for 14 years
before turning a profit.
48. SUMMER 201346 INSIGNIAM QUARTERLY
question of scale. For certain forms of change, such as
introducing a new product or service, an accompanying
change in corporate culture need not occur at the same
time. But major corporate overhauls rarely take place
without concomitant culture change.
“If you have a solid culture in place, you have an
easier time of enacting simple changes,” says Lily Sarafan,
president and chief operating officer of Home Care
Assistance, a provider of in-home care services. “Major
transformations absolutely require a shift in corporate
culture because it requires buy-in from everyone from
every rank in the company.”
DEFINING CULTURE
One of the challenges of understanding the importance
of a company’s culture is that the term itself is highly
subjective, resisting any sort of consistent definition. For
Volanakis, culture derives from clearly defined values
that are as actionable as they are understandable.
“It starts with values.You need to know who you are
— what’s your DNA?” he says.“Values provide a context
for a broader culture. And those can’t just be words on
paper or a kind of poster art.They need to exemplified
every day by the leaders of a company.”
Volanakis points to the value of the individual as a core
tenet of Corning’s overall culture. And, consistent with
the importance of values that are a matter of practice and
not just theory, Volanakis cites the extensive education
and training of new Corning employees in China — part
of a strategy of increasing globalization underwritten by
the value of investing in company personnel. Revenues
from activities in China are fast approaching $1 billion.
A solid culture can also help organizations adapt to
circumstances outside of their control. As Sarafan notes,
the health-care industry is poised to undergo a sweeping
introduction of regulatory changes. She’s confident that
Home Care Assistance’s clearly defined culture will allow
the company to absorb those changes with a minimum
of disruption.
“My belief that we’ll make a smooth transition has
very much to do with our infrastructure and corporate
culture,” she says. “That’s because we have buy-in, not
just within the office team but our caregivers as well.
We’ve included them in the process of developing a
culture all along.”
NEGATIVE CULTURE
Although corporate culture is a powerful vehicle for
stewarding change of all sorts, it isn’t necessarily positive
by definition. For example, a corporate culture that
emphasizes outstanding customer service might seem
like an inarguably positive value. But, if that emphasis
compromises the company’s commitment to employee
quality of life, it can be difficult to determine whether
the organization’s overall culture is truly beneficial or not.
“It’s important to remember that culture can also evolve
KNOW WHO YOU ARE.
Identify your core values, beliefs, and priorities. Without those as your base, any decision
you make may be ill-directed.
LIVE YOUR BELIEFS.
Instead of just saying, “We value people,” show it through development programs, a
commitment to promoting from within, and competitive compensation.
ENCOURAGE BUY IN.
You, as a leader, believe in your core tenets, but if those around you don’t, your company
won’t be able to effectively withstand change or challenge.
VOLANAKIS’ 3 KEYS TO TRANSFORMATION
Ready to transform your company’s culture? Do these three things first.
49. SUMMER 2013 INSIGNIAM QUARTERLY 47
in a negative fashion,” says Charles
H. Matthews, executive director of
the University of Cincinnati’s Center
for Entrepreneurship Education and
Research. “And, leadership often
doesn’t know whether their culture
is a good thing or a bad thing. That’s
a question that can get lost in the
conversation.”
Still, other landmines are those
instances where the “conversation”
never takes place at all. Since culture is
a highly singular component — what
works for one corporation may be
utterly inappropriate for another —
it’s simply not a matter of replicating
another organization’s culture. Another
potential problem is the perceived
nature of culture. For some executives,
taking the time to define and
identify a suitable culture may seem
unproductively abstract. As Sarafan
notes:“You can’t put corporate culture
in a cost-benefit analysis.”
CULTURE AS A FAILSAFE
But the benefits are undeniable.
Since a solidly defined culture implicitly mandates
both the understanding and embrace of everyone in an
organization, that sort of affinity can prove a failsafe for
possible change that simply doesn’t fit.
“Everybody’s a volunteer. People generally don’t
come to work every day just for a paycheck. They
need meaning and identification with a company,” says
Volakanis. “If you’re trying to achieve something and
something happens that’s out of the ordinary with regard
to the culture, people should stand up and say ‘That
doesn’t feel right.’ ”
But even a situation that absolutely mandates a
significant adjustment in culture doesn’t always allow for
immediate action. Sometimes, notes Gregg Fairbrothers,
adjunct professor of business administration at the Tuck
School of Business at Dartmouth College, crises such
as severe cash flow issues or an impending lawsuit take
priority. That doesn’t water down the importance of
examining culture — rather, first things first.
“Occasionally, the question of culture change needs to
be addressed later,” he says.“But, once you’re out of rough
waters, without the right company culture, you’re just
going around in circles.”
CULTURE EVOLUTION
Just as a major operational or infrastructure change
can’t happen overnight, nor can significant culture
evolution quickly win the support of everyone within an
organization. In fact, it’s probably better that it doesn’t.
“It doesn’t have to be immediate buy-in,” says Safran.
“Buy-in is a process, it’s explanation — it’s a very
challenging process. If you have discussion and feedback
from others, you end up with more nuanced and
finalized ideas.”
For some, culture may, indeed, “eat strategy for
lunch.” For others, they occupy the same plate on a
complementary and supportive menu.
“You can have the finest strategy in the world, but
it has to be executed by people and it has to happen
in a cultural context,” says Volanakis. “Culture is the
context in which that strategy sits.This is how we treat
each other, how we deal with customers, how we grow.
Culture is the context in which everything happens.”
“Major transformations
absolutely require a
shift in corporate culture
because it requires buy-in
from everyone from every
rank in the company.”
— Lily Sarafan, president and chief operating
officer of Home Care Assistance