How firms with no map get lost

Attempting change without involving those affected risks failure, reports Roger Trapp

Recent years have seen huge improvements in British industry. Manufacturers, in particular, have benefited from the adoption of Japanese lean production and quality techniques. But - as the consultants never seem to stop reminding us - there is no opportunity for relaxation. Change is a constant in the turbulent world in which modern business is operating.

Certainly, if a survey from Oxford University's Templeton College is anything to go by, the message has got through to senior managers. Top executives in 23 leading international companies questioned for the IBM- sponsored survey said major change - both organisational and strategic - was their common concern.

Nearly all the companies surveyed were embarked on "major journeys of change", with more than two-thirds introducing fundamental changes in organisation and in capabilities and nearly half making radical shifts in strategy.

Moreover, the pace of change seems to be increasing, with only a small minority of companies involved in change programmes lasting at least five years; often they were far shorter.

However, all this activity is not necessarily producing results. According to the report - "Transforming the Organisation: New Approaches to Management, Measurement and Leadership" by Keith Ruddle and David Feeny - "successful change has eluded more than half the companies".

The reason for this appears to be - at least partly - because companies "are embarking on journeys without maps". Very few of the companies identified at the start of their journeys the goals in terms of the full range of what are now referred to as "stakeholders" - including customers, shareholders, management and employees.

Another reason is that companies lack accurate and comprehensive measures to assess the effectiveness of change. One key to dealing with this is the use of "transformational scorecards" - adopted by 80 per cent of executives in successful companies as opposed to fewer than half of those in unsuccessful ones.

But such scorecards need to be as broad-ranging and integrated as possible from the outset - so that they cover such aspects as organisational structures, employee attitudes and IT as well as market share and financial goals. They should also set different measures for different stages of the journey.

Among the lessons for executives about to lead such expeditions are the need to focus scorecards on strategically critical capabilities - not just changes to processes - and to embed changes in day-to-day working practices

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