Category Archives: Market Sectors

Leading Strategic Change – A Key to Change: Deep Organizational Engagement & Involvement

We have the most educated workforce in human history. Younger generations of workers desire an opportunity to use their intellect to create and innovate. Many from the younger generations have grown up in more inclusive and team oriented environments, hence top down decision making and “marching orders” are less warmly received today than in the past. Our workforces are looking for greater degrees of leadership transparency and engagement. We are in a global transformation from command and control to self-organizing networked organizations. 1

Coupled with a changing workforce are our organizations’ cultures. What are cultures? The 1992 classic definition of culture is from Edgar Schein 2 “a pattern of shared basic assumptions that the group learned as it solved its problems of external adaptation and internal integration, that has worked well enough to be considered valid and therefore, to be taught to new members as the correct way to perceive, think and feel in relations to those problems.”

We are experiencing three noteworthy and converging forces simultaneously:

  • A significant generational change between the Boomers exiting and a highly-educated work force
  • Cultures that recycle proven steps, methods and processes which have solved problems of the past
  • Highly-dynamic marketplaces that are in constant flux with new products and services needed to maintain the competitive edge.

How does senior leadership implement new strategies and not have their culture eat it for breakfast?  Our first tenet in Leading Strategic Change is “Involvement.” Younger members of today’s workforce wish to be engaged and involved. They want to be connected to:

  • the DECISIONS that affect their customers
  • the TEAMS with whom they work
  • the SUPPLIERS they resource
  • the IMPLICATIONS to their own work habits, preferences and lives.

Ultimately, these highly capable workers wish to contribute their knowledge, experiences and skills to new policies and procedures. They seek full investment in new ideas, concepts and strategies.  

So when does leadership decide and announce versus deeply engage, gather, decide and announce?  It depends. If a rapid competitive situation, supply chain or regulatory issue exists, then senior leadership many need to take the traditional top down approach. If the strategy has deep, long term implications, will create significant change and will result in culture change, we recommend taking a deeper approach of employee engagement. The Context Network has resources to help plan and facilitate employee engagement creating involvement that will make Leading Strategic Change more sustainable and successful.

If you have other “change topics” or questions, please send an email to Senior Associates, Raquel Lacey Nelson at raquel.laceynelson@contextnet.com and Monty Miller at monty.miller@contextnet.com and we will address in future articles.

References

1 The Economist, November 23, 2013, pg. 68

Schein, E. H. (1992). Organizational culture and leadership (2nd ed.). San Francisco: Jossey- Bass

Portfolio Distractions – Figuring Out What to Stop Selling Can be Hugely Important

“General Managers and Portfolio Managers, this article is for YOU.” – Mike Borel, Context Partner

Context conducted a project for a regional business of a global company that identified products and SKUs that were taking more time than they were being charged, and therefore, reducing effort on other products. What did they do? Removed 25% (by number, half that by revenue) of a portfolio! Read on to know the story and the results.

Portfolio distractions cost money, time and opportunity. Let me tell you about a “real life” project we led on this subject. The client was a multi-country region of a major crop protection company with roughly 2000 SKUs which included old and new active ingredients, high margin and mid-range margin, and various formulations and pack sizes. The business was profitable overall and no individual SKUs were losing money – at least they were not losing money based on the accounting done.

Investigating the portfolio for possible distractions was an idea initiated by Context and ultimately driven by the general manager of this region. This manager wanted more time and energy on the newer and higher margin products and commissioned the study/project. The project was decidedly opposed by the Sales Managers and Country Managers – so much so that we talked often during the process about having a target on our front and back (see cartoon).

MCStory3Image1

We dug deep to find out how much sales and other time was actually going to each product or SKU. This resulted in a new financial summary. We then identified ~500 SKUs (including more than a few AIs) that were taking time and distracting the organization from doing everything possible to sell high margin and new products. We proposed some for sale, others simply for abandonment. The sales organization went crazy trying to stop this. The manager powered through (which was key) and made the changes.

What were the results? In the very next season, sales increased and margin/EBITDA increased even more (on only products that were in the portfolio the prior year). Everyone involved, including the sales team enjoyed a better bonus. The opposition went away.

MCStory3Image2

The Math:

100% (yr 0) – 12.5% (end of yr 0) = 115% (yr 1)

Context has the experience, knowledge, processes and resources to do this job for you. Interested? Contact us to discuss possible portfolio distractions in your business.

Cartoon © Gary Larson available at http://www.flickr.com/photos/gluv/298864264/lightbox/