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Asia/Pacific

Chairman’s Series on Growth

The CEO Challenge:


Developing a Culture of Growth, Innovation and
Leadership

26 May, 2009
Today’s Presenters

Craig Baty Warren Parry


Global VP, IT Practice Managing Director

Frost & Sullivan Change Track Research


Sydney Sydney

Moderator:
Michael Buchholz
VP, Marketing, APAC
Frost & Sullivan
Agenda

1. Recap on poll results from the previous webcast


2. Brief overview: Where we are in the series
3. The CEO’s Challenge: Creating the Growth, Innovation and Leadership
(GIL) culture
4. What the CEO can do to develop a GIL culture?
5. Alignment of the CEO’s vision and staff
6. Best practices in the development of a GIL culture
7. Serious about growth: Next steps
Polling Responses from April APAC/J CSG
1. With regard to growth strategies, which challenges exist in your company?
Company is not in alignment on vision
0.0%

The company culture does not support fast growth


33.3%

We are great at strategy and poor at implementation


66.6%

We are great at implementation and poor at strategy


33.3%

We do not properly evaluate growth opportunities


0.0%

We have no ability to create future scenarios for strategy development


0.0%

2. How would you rate your company’s ability to generate a powerful growth strategy?
Highly Successful
0.0%
Good
50.0%
Average
25.0%
Poor
25.0%
We are lost
0.0%
Polling Responses from April APAC/J CSG

3. How would you rate your company’s ability to implement a powerful growth strategy?
Highly Successful
0.0%
Good
33.3%
Average
0.0%
Poor
66.6%
We are lost
0.0%

4. Looking in the rear view mirror, How would you rate your company’s historic growth
relative to your top competitors? performance
The best
0.0%
About the same
50.0%
Somewhat worse
50.0%
Significantly worse
0.0%
Don't Know
0.0%
Polling Responses from April APAC/J CSG

Looking forward, relative to your industries top competitors how would you rate your company’s
future growth potential?
The best
0.0%
About the same
100.0%
Somewhat worse
0.0%
Significantly worse
0.0%
Don't know
0.0%
The Growth Acceleration System
What is a Growth, Innovation and Leadership (GIL) Culture?

• Teamwork is Focused on Growth


• Business Units, Regional Units Cooperate to Drive Growth
• An Innovative, Dynamic, Trusting and Fun Environment
• Leaders are Humble, Team Players, and Inspirational
• Communication and Collaboration on Vision
• Visionary Leaders Who Set the Standard
• Growth is Celebrated
Developing a Growth, Innovation and Leadership Culture

• The Human Element of Success


• An Inspiring Vision: Total Shareholder Return Doesn’t Work
• Focused on Leadership Skills
• GIL Culture Sits on CEO’s Desk
• Continuing Research into GIL Culture
• The Top 10 To Do’s for GIL
• A Best Practice Case History
Definition: What is Best Practice?

Specific activities performed to solve a tough business


challenge that 9 out of 10 companies are NOT performing
but SHOULD, with measurable results proving
effectiveness
Olympic Performance
Growth Excellence Matrix: Future Growth Potential

Measure and forecast the future growth potential of your company vs. the competitors

New York
KL
Introducing our Guest Speaker…

Warren Parry
Managing Director

Change Track Research


Sydney
wparry@changetracking.com

©2008 Dialect, all rights reserved


Creating a Culture of Growth,
Innovation and Leadership
FOR USE BY CTRE

It is not enough to state, We need to Grow


or to implement processes that you want
your team to follow to achieve growth. Nor is
it enough to simply instruct the individuals
and departments responsible for driving
growth.

It is the behaviour, beliefs, and the


establishment of a growth-focused culture
that lead to successful growth. By
establishing a culture of growth, you will
ensure that all members of the organisation
understand and participate in driving the
organisation to be on the forefront of
innovation and leadership.

Managers are struggling to identify the


underlying drivers of high performance
change and looking in the wrong place to
find the answers.
1 • © CTRE Pty. Ltd. 2009 • Presentation: Inside ChangeTracking® • 25/05/2009
ChangeTracking® is the result of extensive research over
9 years linking people, change and business performance
FOR USE BY CTRE
0% 2%
Transport
0%
1% 9% Consulting
Comprehensive database built from over 280,000 Telecommunications
22%
individuals in more than 250 companies undergoing Utilities
11% Banking
change across industries, nationalities and
Insurance
languages: Government
- Government 7% 3% Community services
- Financial services Defence
- Health services Health Services
- Mining and Resources 15% Manufacturing
13%
- Manufacturing Pharmaceutical

- Engineering Resources
5%
- Energy Utility 0%
12% 0%
Oil and Gas

- Pharmaceutical, Motoring, Sanitation, Biotech Communications and Media

- Telecommunications
31 35
Transformation
Delivering benefit to change stakeholders: Restructure (Reorg)
Transformation, SAP/IT enabled change, new business strategy, Cost management (Reorg)

IT systems implementation, manufacturing best practice, global 19 IT implementation (Reorg)

post-merger integration, building an environment to foster scientific 42


Merger/Aquistion (reorg)
1 Shared Services (Reorg)
innovation, cost management, occupational health and safety
Culture change
research, emergency department performance improvement, shared 22
Performance Improve
services implementation, change risk assessment, culture change 14
17

2 • © CTRE Pty. Ltd. 2009 • Presentation: Inside ChangeTracking® • 25/05/2009


Groups that improve performance across times of
change define the benchmarks for high performance
FOR USE BY CTRE

Our research shows 1 in 9 work groups improve their performance across times of change

Project Business Final Go live and Continuous


High
preparation blueprint preparation support improvement Performance
Peak Performance
Feb Mar April May Jun July Aug Sept Oct Nov Dec Jan Feb Mar and high Change
Capability

On Track
Good Performance
Improvement
and above the norm
Performance

Change Capability

Unsustainable
Better Performance
With the best intentions the norm Improvement but
low Change
on change projects is that they typically Capability
take longer than planned and cost more
– 16% of projects hit their targets
– 18% average overrun on budgets Off Track
Declining
– 23% average over run on schedule Performance
– 7% do not achieve scope/functionality and low Change
The state of IT project management in UK 2002–2003, Chris Sauer and Christine
Capability
Cuthbertson, University of Oxford
Stage of project

3 • © CTRE Pty. Ltd. 2009 • Presentation: Inside ChangeTracking® • 25/05/2009


What is ChangeTracking®?
FOR USE BY CTRE

Leaders implementing change need to


know what actions to take that will give
them the best chance of success
Acquisition,
Restructuring,
ChangeTracking shows leaders if their
ERP,
Merger, change is on track?
Cost Reduction, - properly defined and resourced
Turnaround, - are people actively engaged
Culture Change, - will deliver required financial outcomes
CRM, - in the shortest possible time
Growth, - with the highest probability of success
BPR,
New Strategy,
………where change is off track,
Transformation,
Downsizing… ChangeTracking shows the corrective
actions that are required

4 • © CTRE Pty. Ltd. 2009 • Presentation: Inside ChangeTracking® • 25/05/2009


Validated research that sits behind ChangeTracking
has proven what drives performance improvement
FOR USE BY CTRE

ChangeTracking measures the extent to which


the benefits of the change program have been
realised, whether or not business performance
is improving or declining while change takes
place, and the strength of six change Drivers
Is the
change on track to
high performance?

Realising Improving
Performance
Business business
Benefits performance
Change Capability
Drivers

Aligned Change Work Emotional


Turbulence Resources
Direction Leadership Roles Energy

Risks and Training and Vision and Management Passion


Involvement
Clusters

Roadblocks Capability Direction Commitment and Drive

Changes Taking Systems and


Communication Team Leadership Accountability Disturbance
Place Processes

5 • © CTRE Pty. Ltd. 2009 • Presentation: Inside ChangeTracking® • 25/05/2009


New knowledge has provided hard evidence about
what is important to deliver high performance change
FOR USE BY CTRE

Change Leadership

Systems and Processes

Risk and Roadblocks

Passion and Drive

Involvement

Disturbance

Vision and Direction

Team Leadership

Communication

Training and Information

Accountability
Source: ChangeTrack Research (R2=0.482, N=41725)

High negative High positive

Relative importance of factor in driving improvement in


business performance

6 • © CTRE Pty. Ltd. 2009 • Presentation: Inside ChangeTracking® • 25/05/2009


Our research shows what is required to bring about a New
Way of Working, changes in Culture, Values and Attitude?
FOR USE BY CTRE

1. Cultural Change must be linked to


> Emotionally Engaged Leaders
Company performance improvement

People must be confident


confidencethat
that
the
the
culture change program will improve Emotional agreement to the vision
company performance and need to see and high confidence
signs of improvement in effectiveness and trust in the leadership
and cost management

2. Teams must be actively


> Clear direction, a positive team spirit
involved in managing change

Culture People must be actively involved


in planning and implementing
People need to understand the vision,
feel valued and have
change change in their team and willing
to initiate change
clear performance objectives

3. Individuals must have


> Strength to face the challenge
something at stake

When there is a degree of


People feel a degree of fear,
personal risk and urgency
but are not thinking of leaving
because of the change

Primary drivers Secondary drivers

7 • © CTRE Pty. Ltd. 2009 • Presentation: Inside ChangeTracking® • 25/05/2009


Breaking the cost-cutting cycle
FOR USE BY CTRE

1. Co st -cut t ing b e g ins. 4. Acco unt ab ility is 5. The cycle o f co st -


In t o ug h t im e s ma nag e rs fo rg o t t en fo r t he cut t ing b e gins ag ain.
fo cus o n incre a sing t im e b e ing a nd co st s
a cco unt ab ility to a chie ve cre e p up a ga in.
co st re duct io n.

3. Lea d e rship t raining ,


cre a t ivity a nd innova tio n
2. Co st -cut t ing g o e s t oo fa r. p rog ram s a re put in
Ma nag e rs t he n find sta ff spirit p la ce .
suffe rs, so t he y p la ce a
g re a t e r emp ha sis o n m aking
p e op le fe e l b e t t e r.

8 • © CTRE Pty. Ltd. 2009 • Presentation: Inside ChangeTracking® • 25/05/2009


Case study 1: Change is off track 3 months after go-live, a major IT system had
Bringing an IT been installed and not implemented - $3.8 million over budget,
implementation
back on track 1000 manual overrides on the new system…
FOR USE BY CTRE

When change is off track the impact ripples through reporting levels in different ways - here,
there is a disconnect between the Driver profile for managers and those reporting to them

Aligned Direction Engagement Team Leadership Emotional Energy

Vision Communication Change Leadership Involvement Management Skills Feeling Valued Accountability Passion & Drive Disturbance
Direction

Manager

Team Leader

Team Member

Other

Vision declines Communication Management Skills are Accountability is low Disturbance is


under leaders is OK OK but not great at all levels too high

9 • © CTRE Pty. Ltd. 2009 • Presentation: Inside ChangeTracking® • 25/05/2009


Case study 1:
Bringing an IT The large gains in cost effectiveness was achieved
implementation
back on track without a detrimental effect on service quality
FOR USE BY CTRE

Se r vice Q ua lit y Le ve ls Co st p e r Unit o f Act ivit y Financial rigour


(includ es all lab o ur and o ver head exp ens es )
95% $16 improved:
$14
90% $14

$12
$12 Budget back on
85%
$10 track,
$10
80%
Act ivat ion (%)
$8
taking 3.8 million
Rest orat ion (%)

75% Assurance (%)


$8
out of costs and
$6
Target %
$6 maintaining
70%
$4 customer service
65% $2
levels
60% $0
2004 Q1 2004 Q2 2004 Q3 2004 Q4 2005 Q1 2004 Q1 2004 Q2 2004 Q3 2004 Q4 2005 Q1

Sig nifica ntly First Cha ng e - Are a Volum e s Se co nd Cha ng e - Sig nifica ntly First Cha ng e - Are a Volum e s Se co nd Cha ng e -
ove r b ud g e t on Tra cking Proje c t ad d ed Tra cking Proje c t ove r b ud g e t on Tra cking Proje c t ad d ed Tra cking Proje c t
la b our c osts la b our c osts

“Without ‘hard’ data about how my people were responding to change, I would still be reacting, rather than
proactively driving effective change,” Bill says. “Validated through direct and open discussions with my
people, we learnt to focus on the drivers of improvement and act where it really mattered. The end result for
my team was that complaints about the IT system moved off the agenda, we reduced unit costs by 25 per
cent, improved customer service levels by over 10 per cent in less than six months and our people measures
improved significantly.” Bill Lyon, National General Manager for telecommunications group
10 • © CTRE Pty. Ltd. 2009 • Presentation: Inside ChangeTracking® • 25/05/2009
Summary
FOR USE BY CTRE

Leaders need to know if their change program is on track; if change is off


track what corrective actions to take

Does everyone:
See the way forward and understand what is involved
Have the required resources
Have clear roles and objectives
Engage and commit
Have passion and drive to over come obstacles along the way!

To ensure success they need to:


Have the facts - accurate measures
Have insight – know what matters
Take action – in the areas that really matter

Manage change based on understanding how to achieve high performance.


To Contact ChangeTrack research:
wparry@changetracking.com, +612 9247 6988
11 • © CTRE Pty. Ltd. 2009 • Presentation: Inside ChangeTracking® • 25/05/2009
Companies to Watch for a GIL Culture…and Why?

• Google
• Apple
• Outsell Research
• TED
• Starbucks
• McKinsey
Establishing the GIL Culture: The Growth Model

t
en
em
pl
Im
Implementation
of Strategies GROWTH
MODEL

e
at
al u

Evaluation of
Ev

Opportunities & Strategies


e
atr

Generation of
ne
Ge

Opportunities & Strategies


Growth Workshops:
Strategy Sessions to Build Teamwork and The Same Page
CEO's Growth Team
Building Teamwork & A Culture of Growth Innovation & Leadership
Starting the GIL Culture Program

1) Communicate GIL through Town Hall Meetings


2) Benchmark with Top 20 Competitors
3) Benchmark Growth with Industry Average Over Time
4) Internal Growth Excellence Matrix
5) External Growth Excellence Matrix (with competitors)
6) Training on Best Practices & Growth Models
7) Invest in Growth: Budget, Workshops, Time
8) Shift Incentive to Stretch Growth Targets
9) Develop a Best Practices Perspective on Growth
10) Bring Team to Annual GIL Event
www.frost.com/gilglobal
GIL GLOBAL 2009
A global community focused on Growth, Innovation and Leadership

September 2009 October 2009


Kuala Lumpur
Phoenix, Arizona

October 2009
October 2009
Shanghai
Dubai

October 2009 December 2009

Bangalore Sao Paulo

May 2010
London
Next Steps

 Request a proposal for Growth Partnership Services to support you and your team to
accelerate the growth of your company.
 Attend Frost & Sullivan Executive MindXchange best practice networking events
(http://www.frost.com/cal) to share and address strategic challenges
 Consider Conducting a 360 Degree Growth Workshop to support your long-term growth
strategy
 Join us at a Growth, Innovation and Leadership 2009: A Frost & Sullivan Global Congress
on Corporate Growth (www.frost.com/gilglobal)
 Register for the next Chairman’s Series on Growth: (http://www.frost.com/growthapac)
 Schedule a Recession Strategy Session with a Frost & Sullivan Industry consultant (email
us: alvin.chua@frost.com)
 Schedule a One-on-One Growth Strategy Dialogue with a Frost & Sullivan Growth
Consultant (email us: alvin.chua@frost.com)
 Register for Frost & Sullivan’s Growth Opportunity Newsletter and Growth Team
Membership e Bulletin to keep abreast of growth opportunities in your industry and best
practices in your career track. (www.frost.com)
Contact Us

If you have questions or would like further information about anything we


discussed, please send your query to the email provided below and we will
get back to you shortly.

Alvin Chua
Account Manager
Automotive, Transportation & Logistics
DID: +65 6890 0997
Mob: +65 9199 4566
eMail: alvin.chua@frost.com

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