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CORPORATE TRANSFORMERS
Left: Charles
Drawin – biggest
advocator
of change for
survival & Right:
Meg Whitmen
– new CEO in
charge of transformation
of HP
the other hand, overemphasizing on the positives might
lead to dilution of aspirations and impact. Jack Welch,
former CEO at GE, did strike a perfect balance between
‘What’s wrong here?’ – poorly performing businesses,
silo-driven behavior, and ‘imagining what it might be’
– number one or two in the business, openness and accountability.
Secondly, the employees must see the top management
are behaving in the changed way. This is generally
done through change of top management – the
obvious reason being self-serving bias. Although
change programs are not simultaneously initiated with
a CEO change but it clearly indicates a break from the
past including prior strategies. For example, Hewlett-
Packard Co. last year (September, 2011) appointed Meg
Whitmen, the former eBay Inc. Chief, who transformed
eBay into a global online retail powerhouse, as the new
President and CEO. She replaced Leo Apotheker who
slashed sales forecasting several times, backtracked on
promises to integrate mobile software into devices and
more importantly even struggled to halt an outrageous
plunge of around 50% in share price. The new CEO is
expected to backtrack many of its major decisions
taken during Apotheker’s tenure including the acquisition
of British software maker Autonomy Corp Plc.
which investors claim to be overpriced acquisition.
Avon, an US based Cosmetic company has named Sherilyn
McCoy – a veteran long time Johnson & Johnson
excecutive, as the new CEO a couple of days back. It
clearly indicates that the company isn’t really interested
in Coty’s $10 billion takeover offer and would
instead focus on transformation programs to arrest the
slide in profit declines.
Thirdly, there must be some incentives for the employees
for changing. Motivation towards accepting
change depends upon the impact of the transformation
program on society (building community, stewarding
resources), customer (for instance providing superior
service), company and its stakeholders, working team
and above all the impact on individual employees (like
career development, paycheck) to name a few. If the
change program covers all these aspects then it is bound
to unleash tremendous amount of energy which would
otherwise remain latent in the organization. Small and
unexpected rewards can have disproportionate effects
on employees’ satisfaction with a transformational program.
While turning around Continental Airlines, the
then CEO Gordon M. Bethune, sent an unexpected $65
check to every employee when the company made it to
top five for on-time airlines.
Fourthly, employees must possess the skills required
to make the desired change. A company – planning to
introduce a new technology that would reduce cost or
improve operational efficiency, must train its employees
beforehand to avoid resistance and the message should
be given clearly leaving no room for speculation.
All these are easier said than done. The success rate
of change programs is considerably low as suggested
by various researches. As per John Kotter’s research
only 30 percent of change programs succeed. In 2008,
a McKinsey survey of 3199 executives around the world
prevailed that only one transformation in three actually
succeeds. There are thousands of models and researches
on how to make successful transformation.
Although, these static and normative models are admittedly
helpful in presenting a vision of what ‘good’
look like and identifying some of the changes that can
be brought but rarely do they capture the dynamic
nature of change. So what really does happen is that
although the prescription is right but it goes all wrong
in the implementation phase. Most of the time the reason
for failure is that the focus is either too broad or
too narrow which creates confusion and results in
typically wasting time and energy and creating messages
that miss the mark thus come up with frustrating
unintended consequences.
However, most critical factor behind any transformation
is the change leaders. While most good managers
try to keep things under control, the change agents are
determined to shake up things and mainly depend on
their market intelligence to get information about what
the competitors are up to. They rarely apply standard
off-the-shelf approaches and improvise on their past
experience all the time. The key to remain competitive
is constantly looking for the triggers and react quickly
to keep their boats afloat in the right direction. Charles
Darwin in his book ‘Origin of Species’ on ‘Theory of
Evolution’ mentioned, “It is not the strongest of the species
that survive, nor the most intelligent, but the one
most responsive to change.” Perhaps, this is even more
suited to the corporate world.
count your chickens before they hatch 19 april 2012