Driving change by pulling soft side levers
The company, a construction industry player, had lost market share and several KPIs were indicating poor performance. A new Managing Director saw that the root cause was a poorly managed change program. August identified corrective actions based on an in-depth understanding of ‘soft’ organizational levers.
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Challenge
The new Managing Director faced a challenge: in recent years, his company had lost market share to competitors. Profits were modest and customer satisfaction and employee engagement were declining. The company had also been implementing its new “One Company” strategy as the organization was going through several changes. The biggest changes included the implementation of a new ERP system and the establishment of a centralized supply chain function in order to capture synergies from an integrated operating model. The changes were not progressing nearly as fast as expected. The managing director needed to understand the true road blocks for the change and reasons for the lagging performance and to launch pragmatic actions to fix the situation.
Brave the future
Using Organizational Performance Diagnostics, we were able to form a holistic picture of the true pain points and distinct root causes to these problems and understand what remedies would actually correct the situation. It quickly became apparent that the new operating model was not yet embedded in the organization. Local units were still focusing on optimizing their own performance by directly violating the new integrated way of working. As the evidence accumulated, our team was able to identify a set of operational challenges and an interlinked set of cultural challenges.
The team design focused initiatives to tackle these challenges. For example a fresh “One Company” campaign was launched. We believed the company needed to get a more positive tone to the change and ensure that the new way of working was understood on all levels of the company. Another example was shifting the performance management towards larger units. As the new integrated operating model required units to optimize the whole entity and increase collaboration, the executive team needed to focus on managing performance of entities would be large enough and include all key functions. Local optimization needed to be discouraged.
Impact
The new initiatives made the change more meaningful and relevant for people around the organization. The project helped the management to tackle the key operational challenges and as a result, operating profit shot up by 50% in the following year.