Scotland, referenda, business units and change management


LONDON — Clearly there is a disturbance in The Force. Our old ‘sovereigntist’ leader of Quebec, Jacques Parizeau, has called it out thus:

“Sovereigntists today stand before a field of ruin,” Mr. Parizeau said in excerpts obtained by Radio-Canada. “There is confusion in their spirits that I have not seen in a very long time.”

If you’re not familiar with M Parizeau, imagine a cross between Alex Salmond and the Monopoly Man. He’s probably an economic genius of sorts who set up one of the first Sovereign Wealth Funds, the Caisse de dépôt et placement, in Quebec almost 50 years ago.

And almost 20 years ago he stood on a stage in Quebec as our second independence referendum went down by a score of 50.6 to 49.4% and said that it was all the fault of “money and ethnics”. He was, as the British press would say, very tired and emotional at the time.

There are people who study and speak bravely on the power and risks of nationalism, like Anglo-Canadian Michael Ignatieff. And great books on the topic of liberal nationalism, like the recent one by my friend Dr James Kennedy. But the issues raised by the recent Scottish referendum can also be seen reflected simply in business.  They are about ownership and belonging.

Business units, divisions, offices, regions, brands can all often see good reason to go it alone. How long did AutoTrader have to support The Guardian? How does Xbox feel about Windows hogging the limelight? And there are companies like Baxter Healthcare that are choosing to split themselves in half voluntarily.  And some who have already done so successfully, like AbbVie and Abbott Laboratories.

However those seem to be the exception.  Most businesses, like most countries, tend to manage their internal struggles within their borders. Brands, business units and offices are generally made to believe that managing scale and sharing back-office resources is more effective and will lead to greater prosperity than by doing it yourself.  Clearly there are times when those goals and those results are in question — and that’s when management and often change management comes to the fore.

In Scotland, like in Quebec, like in businesses, it is about managing expectations and understanding the implications of change. My wife recently lamented that as a family we have been involved in three independence referenda and have never yet been on the ‘cool’ side. Unfortunately, doing something new and breaking away, saying an emphatic ‘yes’ to breaking with the past, is the coolest thing to do. Who wants to vote for the status quo?

“Sign here if you’re completely satisfied with your life…”

Not a lot of takers.

Like in the politics, businesses have often been going the other way.  We have found ourselves advising an increasing number of clients on how to bring things together, rather than take the apart.  That’s not to say that we are fundamentally ‘centralists’, because we’re not. However, separatism, in business and in nations needs to be more than a romantic idea.  And often the sums don’t add up.

I should maybe have said that to Jacques Parizeau the only time I met him.  But somehow the St Andrews Ball, which he loved to attend in Montreal, didn’t seem like the right occasion to do so.


Delivering organisational change across the silos


An illuminating article in TIME magazine recently looked at the problems of insular management and poor accountability in large organisations, using GM’s ignition-switch problems as a case study.

The article struck a chord with us, as it would with anyone who has had experience of working with large and established businesses. Insular management. Siloed operations. Endless meetings that fail to result in action. Individuals not held to account. In the case of GM, this had tragic consequences, with as many as 74 deaths having been attributed to the ignition-switch fault. Last week, plaintiffs filed a lawsuit against the company seeking as much as $10 billion in damages.

If you are interested, like we are, in delivering organisational change in challenging corporate environments, the subsequent investigation and report by former US Attorney General Anton Valuka will be required reading. Ineffective communications between departments, blamed for conflicting and poorly informed decisions at GM, has been cited in numerous investigations into industrial accidents. Poor communication between contractors was cited as a factor in the Deepwater Horizon oil spill. And as far back as 1951, the US Air Force Inspector General published a report entitled Poor Teamwork as a Cause of Aircraft Accidents, with the recommendation of mandatory teamwork training programmes as a means of improving safety in the airline industry.

Managing people, programmes and organisational change

There are also lessons for other organisations. In our experience, the same challenges that led to disaster at GM – siloed working and poor accountability – are the same challenges that can slow or derail any transformation programmes. We were recently engaged by a client that was mid-way through a major transformation programme. Despite the backing of the CEO and despite the urgency – investors clamouring for a step-change in performance – the programme was in real danger of collapsing, without having delivered any of the required benefits or savings. We witnessed a culture of poor accountability across all layers and departments in the business. Worse still, the day-to-day business decision-making had ground to a halt as senior managers were tied up in endless meetings, few of which resulted in any tangible decisions or actions.

As the article notes, there are various means for breaking down internal silos. Establish a set of core values or a mission-statement that everyone can understand. Apply an external perspective to challenges. Hire outsiders, and particularly women and minorities, who often communicate better across departments. At Able and How, we would echo all of these – while emphasising the importance of underlying organisational change capability. We have worked with many of the world’s leading organisations in using our Change Index to assess and monitor their ability to drive change across their business. Using the resulting information, together with our experience in supporting major business transformation, we then help our clients deliver the required interventions to ensure their programmes perform.

Author Rana Foroohar concludes with the point that silo-busting at GM – or any other organisation – requires starting at the top. In our experience, we would say the same is true for anyone wishing to drive meaningful change in their business. Visible leadership and having an effective change management strategy can make the difference between delivering successful, sustainable change – or failure. In the case of GM, the cost of failure has been significant.

Alan Macdonald

01 July 2014

How the Tube strike ‎could improve the productivity and profitability of businesses



ON A LONDON BUS — Today is another day in which the stoic and phlegmatic Briton will stand patiently at packed bus stops. Being there with far more people than any bus can carry‎ won’t dissuade them. Until the fourth or fifth bus passes, full, at which point they’ll pause to think about which direction and set off walking.

The papers, radio and TV will tell us that it will cost us £600 million in lost work hours, or £50 million a day in lost business. And we’ll be concerned, but resigned.

We’ll keep walking.

But is it really the case? Does it have to be that way?

Some recent work we have done on “flexible working” suggests that the opposite may be true. There may actually be quite a lot of money to be gained by some of the behaviours that the Tube strike will impose on Britain’s business community.

One of our clients saved $9 million in a single year simply by allowing more their employees to work from ‎home and reducing their office footprint. And they weren’t even based in London.

Another, London-based business with 600 employees is looking at a minimum £5 million annual reduction in costs — just by implementing flexible working

However, physical plant costs aren’t enough to sway most people. So it’s helpful that the research on productivity for people who work from home is also so high. Recent estimates suggest it is as much as a 13% increase in productivity for people who work at home. And there’s a 50% drop in employee attrition.  think of your HR costs saved!

Then there are the costs associated with travel in both time and money, which are ‎greatly reduced.  Fewer people take sick days.  There are many, many positive implications.

In fact, the biggest challenge to more businesses taking up flexible working is managers and organisational culture.  So, it’s mostly a change management question.

While we wouldn’t ‎suggest that the Tube strike is a good thing. It is a great opportunity to ‎encourage people to look at flexible working.

It could certainly make Tube strikes less important.  AND improve the productivity and profitability of UK businesses.

That’s surely worth a serious look.


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