Massive change ahead

We’ve just had a long period of ever-increasing economic growth, but this has been halted in its tracks because of the Corona virus. The impact of the global lockdowns is huge, both generally, on the economy and society as a whole, and specifically, on companies, families and individuals. A major recession is a given. Consumer behaviour is likely to change in a fundamental way – and so are the ways in which business will be conducted in the future.

How will you navigate these current challenges and position yourself for new growth? Now is the time to review your company, the products and services it offers, the markets it serves and the way it conducts its business. Significant change is required to create the “new normal”. Your strategy needs to be reviewed. New (perhaps digital) operating models need to evolve. And all this needs to be implemented fast so that you can capitalise on new opportunities and build your competitive advantage.

The change challenge

Transformation, strategy execution and performance improvement programmes are notoriously hard to deliver successfully. Most change initiatives struggle to accomplish and sustain the initial programme goals – in fact, only 30 percent are successful. The delivery of a mission critical initiative on time and in full is, therefore, a real determinant of competitive advantage for any company. The vast majority of change initiatives stumble because of precisely the thing they are trying to transform: attitudes and behaviours of people at all levels in the organisation.

Successfully implementing change

The ability for people to change their attitudes and behaviours is primarily driven by their perceptions and intentions. These must be changed first before any change in attitude and behaviour occurs. So how can we do this? People’s perceptions and intentions change due to experiences and information. Perceptions and intentions capture people’s motivations and are indicators of how hard they are willing to try or how much effort they plan to exert in order to perform the required behaviours.

During a change process, people are confronted with two forces: first, change tension (the perceived necessity and urgency of the initiative) and, second, the power to change (the willingness to support and adopt the change and the ability to contribute effectively). Both forces are required in a programme to make change happen.

The way people experience these forces is the key indicator for people’s perceptions and intentions towards an initiative. The rating for these two indicators gives the best prediction about a person’s intention to adopt the attitude and behaviour that is needed. In different parts and at different levels in the organisation, the two forces are likely to develop differently. This drives the need for differentiated interventions for various parts of the organisation. Our Change Insider® provides insights and fact-based guidance for precisely these differentiated interventions to enable the on-time-in-full delivery of a company’s mission critical initiative.

Is your cost structure still fully aligned with your vision?

The global lockdowns are having a significant – if not devastating – effect on most businesses. Many companies will survive the crisis, but they’ll emerge a lot smaller and in a changed environment. Reviewing your vision has now become a necessity. Your current cost structure is most certainly no longer optimal. Now is the time to ensure that every euro spent contributes 100 per cent towards achieving your ambition.

Aligning your vision and cost structure – 4 questions

There are two basic ways to approach cost cutting: targeted and zero-based. As most companies are facing a major, and quite disruptive, change, a comprehensive approach is needed. In our experience, Zero-based Alignment provides the better way to radically redesign the cost structure of a business.

The first step is to work out an appealing vision for your business in the “new normal” and set a challenging cost target. Next, current activities and cost structures need to be mapped and understood in detail. To understand how best to address this, we work with four main questions (see figure below).

The answers to these questions become the input for an iterative process that starts with a redesign of end-to-end business processes. Next, the organisation structure is designed to fit these new processes. The design always starts with a blank sheet of paper. By comparing the existing state with the ideal state, many opportunities are identified for both savings and new growth opportunities.

The Zero-based Alignment workflow

The overall process that Zero-based Alignment follows is shown below.

A new and stimulating future

Zero-based Alignment generates powerful effects: a fresh and energising vision that reflects changed market conditions, significant cost reductions, improved yield on every euro invested, new growth opportunities, and a new and stimulating future for your business. And that’s exactly what every company needs right now?

 

To what extent is your organisation able to move quickly and decisively?

Already in normal times companies struggle to deliver business targets on-time-in-full. Typically, we find three related main causes: (1) there is no appealing vision that is owned by everyone in the company, (2) the strategic goals are unclear and (3) the organisation is not aligned. As strategies are not unique anymore, it’s delivery fast and in full is, therefore, a real determinant of competitive advantage for your company.

It starts at the top

All successful change management initiatives start at the top, with a committed and well-aligned group of executives. The first step is to ensure that the team will coalesce around a coherent vision on how the company should look and run like. It is the basis for the identification of the three to five strategic goals with challenging targets.

And cascades down the organisation

Next the top team involves the next organisational level down in refining the vision and gives them the challenging targets set. Collectively, they will need to work out how to deliver them. This requires horizontal within the organisational level and vertical alignment between the levels. This process is iterative and continues right through the levels till shopfloor is reached. What happens is alignment top-down and horizontally at each level.

Catch-ball process

The process is not a one-way street, it is a ‘catch-ball’ process. The higher level throughs the ball, i.e. the target to the next level down. They will sort out how to deliver it. It requires the involvement of the various departments at each level as they are interdependent. If they can’t find ways to deliver and substantiate this, they are allowed to through the ball back with an indication of what is achievable. Our experience is that, if done well, this results in challenging targets which are more often than not higher than the top team started with. The process builds on the collective insight, knowledge and experience. What happens is both alignment and ownership of the targets, a great starting point for moving quickly and decisively.

Are your business processes still up to the required standard?

Particularly now, in the major economic recession that has set in due to the Corona lockdowns, the quality of your business processes have to be top notch. After all, this is the determiner of the operational performance your company delivers.

Over the years your customer base will have changed, but so too has your supplier base, your products and services, your employees, your IT-infrastructure and your organisational structure. With every change your processes have been affected and now they are rather a tangled web with insufficient performance.

Understanding how your processes behave – a prerequisite for improvement

The scale of the current crisis requires companies to move quickly. You want to cut costs, slash cycle time, serve customers faster, get things right first time, improve reliability and be more agile. Therefore, you need a 100% fact-based insight into how your business processes are currently performing – and this can only be obtained through Process Mining.

Process Mining – the gateway to rapid operational performance improvement

How business processes behave is determined by the way those processes are designed and represented in IT-systems on the one hand and how your employees behave on the other. The good news is that this information is already captured in the log data in your IT-systems. This log data can be loaded from your IT-systems into the Process Mining software tool and, literally at the touch of a button, it then displays your process, as it behaves in daily reality, with all the process variants, rework loops, bottlenecks, compliance issues and more. Static, as a process flow, and dynamic, in the form of an animation. In short, a fast and effective way to understand processes and make an effective impact on those things that really matter.

The power of Process Mining

Process Mining (PM) quickly puts an end to “underbelly” discussions because it is fact-based. With PM, both the entire process and an individual case can be analysed – and everything in between. After loading your log data into PM, interactive “deep dives” can be organised with the people involved in the process. Our experience is that the root cause of problems is discovered in a short time and it quickly becomes clear which actions need to be taken to solve problems and seize opportunities.