Insider Business Club: change management

How can business better cope with change in challenging markets like

Jacqui Warren, executive partner: organisation change strategy, IBM
Global Business Services UK & Ireland

If we look back at previous times like this and then see what the leading
companies did, if they could, they refocused their portfolios and took the
opportunity to make sure that they were using the funding and resources they did
have to make a real impact on their business so that they could come out at the
end of this much stronger.

That involved looking to make sure that the portfolio was aligned with the
overall strategy ­ particularly in how they differentiated and competed in their
particular markets. They brought a particular focus to bringing outcomes and
benefits forward. They were mindful of cashflow and of making sure that they
were getting early returns.

Thinking about the sorts of projects that people therefore are investing in
at this time, it is about making the most of mergers, sometimes forced mergers,
and bringing through the benefits of those ­ cost reduction, process excellence
and improving products and services perhaps through shared services which bring
a great deal of efficiency and functional transformations, much of which is
enabled by technology.

At a time like this I think we are seeing a change in where the emphasis is
and where there is a lot of activity. And we’ll obviously need to see what
happens over the next year. But if you read the press you can see that many
organisations are going through substantial change programmes.

I think we are all agreeing that change is the new normal really. We have
done a CEO survey around the world about enterprises and success in the future
and also building on that a study called ‘Making change work’. The confidence of
business executives about their ability to handle change is falling relative to
the amount of change and that was before the current economic difficulties. The
percentage of CEOs expecting substantial change rose from 65% two years ago to
83% now. Those experiencing success has only risen by about 4%.

Globally what we call the change gap has tripled. In the UK, the gap ­ a lack
of confidence about being able to handle the change ­ is even larger than

It does mean that people have to be very careful about where to invest in
change what we do see is that the ones who are leading in their project success
rates are doing some very specific things.

What are the key factors in ensuring change programmes succeed?

Richard Ashcroft, group financial director, Harvey Nash

I would say undoubtedly that change programmes succeed or fail largely based
on the quality of communication. The more that accountants can learn
communication skills and become better communicators the more likely it is that
the projects involved are going to succeed. The most important thing in times
like this is to get your strategy right. In deciding on your strategy, you have
to be focused on delivery, not allowing yourself to be side-tracked by
activities which are perhaps not core to that strategy.

I believe that all organisations must have their strategies under continuous
review as the pace of change accelerates. It’s a duty of all boards of directors
to continually review their strategies. Having set the focus, it is incredibly
important. There is an element of sticking to your core competencies which is
important for organisations particularly in times like this. For example, at
Harvey Nash, we were very mindful a couple of years ago that we were operating
in something of a bubble and that there had been a rush in the recruitment
sector more towards permanent recruitment. That actually became quite frothy and
quite overheated.

I get asked all the time in the City about the visibility of our revenue
streams and that is an incredibly important thing as we head into uncertain

Our emphasis has always been on driving long-term shareholder value and we
realise, now the downturn is coming, it is better to have longer-term visible
annuity revenues. So our strategy has been not to jump on the bandwagon of
permanent recruitment, not to hire too many people, and actually to be quite
cautious and prudent in our outlook.

We have one of the largest proportions of contracting revenues in the mix in
our industry and where you have contractors out working, you have more
visibility of your revenue streams. That is also the case with the way we have
been developing our outsourcing activities as well.

Chaired by Damian Wild

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