As you can imagine, I spend a fair amount of time keeping up with changes and challenges faced by industry and business in the fields of change management and innovation. So I’m constantly on the lookout for information and news that may impact behaviour and best practice across organisations. Here’s a pick of what I’ve been attracted to this week: Change Management Project Management News from Australia and the World …  … Value of Having a Change Expert on Your Next … Every technology project benefits from having a team member with change management expertise to keep stakeholders engaged and help to increase the success of the technology project.  Water and Corporate Culture at Golden State Foods  Golden State Foods has grown alongside California agriculture to become a multinational business, with water conservation as a focal point.  Assessing Organizational Culture – TribeHR  There are a lot of good reasons to focus on culture at work. Companies that focus on creating a strong culture attract talent. They also outperform financially. Cultivating the right culture for your organization can take time and …  Managing Change, the Only Constant in Today’s World | RJ …  William Bridges, who in 1991 published the first edition of his groundbreaking book Managing Transitions: Making the Most of Change, says that in most of these cases, the problem isn’t the change itself but the way people …  Innovation News One Bright Idea That Could Transform Innovation In Australia  For dozens of Australian researchers returning to the country after working in the US, the lack of an equivalent to the US’s Small Business Innovation Research SBIR scheme here reflects a major hole in our innovation …  2015 Innovation Dialogues | GovCamp Australia  Throughout July, GovCamp Australia will be hosting a National Dialogue program on innovation leadership for the public sector. This program of discussion events is designed to give public sector professionals from Federal, …  Mining Equipment and Supplier News » Innovation, bringing …  MAX Plant – Arrium Mining. After successfully developing the range of MAX plant equipment over the past 8 years, Striker has just completed its latest project, a 1000TPH portable MAX Plant for South Australian Miner Arrium.  The future of teaching and learning will be driven by …  Microsoft Education Australia’s Teachers Blog – Support, tips, trick and stories from Australian Teachers for Australian Teachers. … Innovation in education offers incredible opportunities for trail-blazers. Microsoft 365 is a …  Where My Words Have Travelled I publish around the place from time to time. Here’s the latest: New frontiers in instructional design: Are MOOCs working? Massive Open Online Courses (MOOCs) are the subject of a lot debate in the blogosphere. Will they be a disruptive technology for universities? Will they take over the trainer’s job in corporate organizations? From a higher education perspective, it’s easy to see the selling point for students The Importance of Great Leadership Communication In 1987 Paul O’Neill became the CEO of Alcoa. Taking over the helm of a company usually means making grand statements about finances, about cutting costs, and change the investment priorities. But what O’Neill did at his first investor press conference was a little different. The art and science of improving performance (monkey see, monkey do!) To improve productivity in organizations you need only get leaders out in the field The controversial Koch brothers wrote a book called the Science of Success (2007). I don’t recommend you read it as it’s one of those books that successful people write where they think they were successful because of these management techniques, whereas it’s more likely that because they were successful they could try out these management techniques (fads of the day?). 5 Steps to Drive Value from Training According to the ASTD’s 2013 State of the Industry Report, U.S. organizations spent $164.2 billion on employee learning and development in 2012. The report does a good job of categorizing and classifying expenditure. But what about ROI? How can managers structure training to ensure a positive ROI? The Reason Projects Fail to Realise Benefits How often have you rolled out a new IT project that failed to deliver the desired benefits? Most projects fail to deliver benefits because of poor change management. Little to no attention is paid to the people side. From the Vault	 Psychology and why good looking people are more successful I am currently reading Daniel Kanheman’s, Thinking, fast and Slow. According to Wikipedia, “Kanheman is an Israeli-American psychologist and Nobel laureate, He is notable for his work on the psychology of judgment and decision-making, behavioral economics and hedonic psychology.” Prepare to Sell You’re in sales. Your earnings depend upon hitting those targets. In fact, it’s not just your earnings, but those of your colleagues. The whole company depends upon selling its products. And that’s your job. That’s a whole lot of responsibility on your shoulders. Every call you make is a battle that needs to be won, so you better be prepared to win it.

As you can imagine, I spend a fair amount of time keeping up with changes and challenges faced by industry and business in the fields of change management and innovation. So I’m constantly on the lookout for information and news that may impact behaviour and best practice across organisations.

Here’s a pick of what I’ve been attracted to this week:

Change Management

… Value of Having a Change Expert on Your Next … Every technology project benefits from having a team member with change management expertise to keep stakeholders engaged and help to increase the success of the technology project.

Golden State Foods has grown alongside California agriculture to become a multinational business, with water conservation as a focal point.

There are a lot of good reasons to focus on culture at work. Companies that focus on creating a strong culture attract talent. They also outperform financially. Cultivating the right culture for your organization can take time and …

William Bridges, who in 1991 published the first edition of his groundbreaking book Managing Transitions: Making the Most of Change, says that in most of these cases, the problem isn’t the change itself but the way people …

Innovation News

For dozens of Australian researchers returning to the country after working in the US, the lack of an equivalent to the US’s Small Business Innovation Research SBIR scheme here reflects a major hole in our innovation …

Throughout July, GovCamp Australia will be hosting a National Dialogue program on innovation leadership for the public sector. This program of discussion events is designed to give public sector professionals from Federal, …

MAX Plant – Arrium Mining. After successfully developing the range of MAX plant equipment over the past 8 years, Striker has just completed its latest project, a 1000TPH portable MAX Plant for South Australian Miner Arrium.

Microsoft Education Australia’s Teachers Blog – Support, tips, trick and stories from Australian Teachers for Australian Teachers. … Innovation in education offers incredible opportunities for trail-blazers. Microsoft 365 is a …

Where My Words Have Travelled

publish around the place from time to time. Here’s the latest:

Massive Open Online Courses (MOOCs) are the subject of a lot debate in the blogosphere. Will they be a disruptive technology for universities? Will they take over the trainer’s job in corporate organizations?

From a higher education perspective, it’s easy to see the selling point for students

In 1987 Paul O’Neill became the CEO of Alcoa. Taking over the helm of a company usually means making grand statements about finances, about cutting costs, and change the investment priorities. But what O’Neill did at his first investor press conference was a little different.

To improve productivity in organizations you need only get leaders out in the field

The controversial Koch brothers wrote a book called the Science of Success (2007). I don’t recommend you read it as it’s one of those books that successful people write where they think they were successful because of these management techniques, whereas it’s more likely that because they were successful they could try out these management techniques (fads of the day?).

According to the ASTD’s 2013 State of the Industry Report, U.S. organizations spent $164.2 billion on employee learning and development in 2012. The report does a good job of categorizing and classifying expenditure. But what about ROI? How can managers structure training to ensure a positive ROI?

How often have you rolled out a new IT project that failed to deliver the desired benefits? Most projects fail to deliver benefits because of poor change management. Little to no attention is paid to the people side.

From the Vault

I am currently reading Daniel Kanheman’s, Thinking, fast and Slow. According to Wikipedia, “Kanheman is an Israeli-American psychologist and Nobel laureate, He is notable for his work on the psychology of judgment and decision-making, behavioral economics and hedonic psychology.”

in sales. Your earnings depend upon hitting those targets. In fact, it’s not just your earnings, but those of your colleagues. The whole company depends upon selling its products. And that’s your job. That’s a whole lot of responsibility on your shoulders. Every call you make is a battle that needs to be won, so you better be prepared to win it.

What to Do When Corporate Culture Crashes

What to Do When Corporate Culture Crashes

In August 2009, a Toyota Lexus accelerated out of control and crashed, killing the driver and all its passengers. Toyota acknowledged the accident in a statement that showed both concern and regret, but would not comment on possible cause. In doing so, the company ignored any likely causes and didn’t issue warnings to customers.

When Toyota’s floor mats were implicated as cause, the company still issued no warnings, instead telling dealers to merely inspect any returns. It wasn’t until America’s National Highways Traffic Safety Administration (NHTSA) issued its own warning – a whole month later – that Toyota came clean. What happened next is a lesson in corporate culture for all.

Corporate culture and communication

When the NHTSA issued its initial report, Toyota quickly communicated to customers that there was little difference to its then-current floor mat warnings. It restated that its cars were among the safest on the road. NHTSA retorted by declaring that Toyota’s statements were “inaccurate and misleading”.

Eventually, Toyota conducted an internal investigation, and declared a problem with the accelerator pedal in some vehicles. This simply pointed to a new, as yet undeclared issue. The company recalled 3.8 million cars (the biggest recall in automotive history), then followed up with a new recall for 1.66 million vehicles in 2010, and fitted a brake override system. But that simply sounded like a third safety issue.

By now the company’s reputation was in tatters, a perception accelerated by poor communication. Clearly there was more to its problems than faulty parts and a sub-standard manufacturing process.

In a statement in October 2009, Akio Toyoda said:

“Four precious lives have been lost… Customers bought our cars because they thought they were the safest. But now we have given them cause for grave concern. I regret and apologise for this development. I cannot begin to express my remorse.”

Some market observers understood this as a message not only to customers, but also to employees. Toyota’s response had, to date, been slow, slurred, and indecisive. Now that was about to change.

Assessing the damage of a diseased corporate culture

Toyota’s internal report discovered what many market analysts had suspected. At the heart of the organisation’s problems laid a corporate culture out of sync with its previous success. Central to these cultural issues was the declared company strategy: to be the world’s top automobile company within ten years. Its strength had been built on two underlying principles:

  1. Kaizen (continuous measured improvement)
  2. Genchi Genbutsu (inspecting problems at their source)

Toyota’s strategy of rapid global growth undermined these principles and encouraged executives and employees to:

  • Dismiss customer complaints
  • React poorly to suspected safety issues
  • Have a combative relationship with regulators
  • Become adverse to accountability

The board was an all-male, all-Japanese ruling body, and the inherent Japanese reluctance to admit to shame undermined its need to admit responsibility. It was structured on a centralised hierarchy, with this organisational structure disabling the ability to be agile and react with speed.

Now, the market no longer trusted Toyota, its management, or its cars. Sales fell through the floor.

How to make fundamental changes to corporate culture, the Toyota way

Today, Toyota is beginning to recover its former glories. But it has not been without effort, and much of it.

  • The company response has been to go back to basics. It now does things the “Toyota way,” with kaizen and genchi genbutsu dictating its development and manufacturing processes, and its sales targets.
  • It has streamlined its governing board, reducing numbers from 27 to 11.
  • It employs external experts to evaluate safety and control processes.
  • It is now committed to working with regulators rather than seeing them as ‘the enemy’.

Avoid Toyota’s mistakes with these five steps to a consistent corporate culture

Toyota lost its way because it failed in several key aspects of corporate governance. Central to its shortcomings was the failure to maintain the corporate culture that had been the source of its previous success.

To avoid crash because of culture, follow these five steps:

  • Ensure that ethical practices remain central to your core values and business strategy.
  • Don’t place too much emphasis on growth (more speed; less haste).
  • Be positive when a crisis hits, and take swift and positive action. Engage with investigators, and work proactively.
  • Remain consistent in your approach and communication of approach.
  • Employ the right organisational structure, balancing between centralisation and decentralisation.

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How Siemens Changed an Irreparable Culture

How Siemens Changed an Irreparable Culture

As I’ve written before, there are many reasons that might cause an organisation to seek change. These include regulatory, market (customer) pressure, and merger situations. Sometimes, the need to change is because a company’s culture has nearly destroyed itself from the inside. When this happens drastic action is needed, as Siemens found out in 2006/7.

When things go wrong and money goes missing, change is obligatory

It was in late 2006 that investigations into suspected wrongdoing at Siemens discovered one of the largest cases of corporate financial misconduct on record. The German courts found a systemic practice of issuing phoney contracts, false bills, and creation of shell companies through which employees – hundreds of them – had embezzled millions of dollars.

At first, Siemens’ senior management tried to downplay the scandal. Eventually, though, its response was one that serves as a study in change management best practice when a huge sea-change in corporate culture is needed.

In total, Siemens eventually estimated that its employees had effectively stolen more than €400 million. Senior executives − the CEO and Chairman included − claimed they had no knowledge and that they weren’t involved. The result: shareholders deserting the company because they feared a lack of integrity. Consequently, the share price plummeted.

A month later, senior executives were forced to u-turn and promise to restore the company’s reputation.

Uncovering the errant corporate culture

The first action Siemens took was to conduct a full internal investigation. There was huge internal resistance to the investigation, and it wasn’t until both the Chairman and CEO had departed that the worst was revealed. New CEO, Peter Loescher, prompted the renewed vigour of the investigation when he offered an amnesty to all whistleblowing employees (though he excluded directors from the amnesty). What the internal investigation uncovered as the cause of the scandal was a failing corporate culture prompted by:

  • An aggressive growth strategy that forced managers to shortcut in order to hit targets
  • A complex organisational structure that enabled divisions to operate completely autonomously
  • Negligible checks on accounts and payments to be made
  • A culture of tolerance of these practices, with employees feeling ‘encouraged’ to accept bribes

It was clear to Loescher that only extreme action would break down the existing and failing corporate culture and enable it to be replaced with a culture of business integrity. Loescher unconditionally accepted the goal to:

“create a culture in which managers do not fall back into easy, and illegal, patterns of behaviour.”

Emergency change begins with process and procedure

Siemens employed outside consultants for advice and guidance, and immediately set out a set of strict rules and processes aimed at increasing organisation-wide compliance and anti-corruption procedures. Compliance was redesigned to “prevent, detect, and respond.” Compliance helpdesks and hotlines were set up (and manned by 500 new compliance employees), and a web portal created for employees to more easily evaluate customer and supplier risk.

Training and coaching was initiated and targeted at creating a new integrity among employees. Whistleblowers were treated with fairness and confidence.

Real change comes with a sustainable change in corporate culture

New processes and people cannot, by themselves, stop a rotten organisation from total decay. The only way to sustain such organisational change is to change culture.

Siemens undertook this massive cultural change program with full efforts on training, coaching, and education. Within 12 months, more than 200,000 employees had been trained on anti-corruption practices. Some of this training took place in classrooms, while other training was rolled out on the company’s intranet.

Further, Siemens undertook a wide-scale review of its strategy. It:

  • removed countries known for their systemic corruption activities from target market lists;
  • suspended its application for funding from the World Bank;
  • undertook by binding arrangement to pump $100 million each year for fifteen years into non-profit organisations fighting corruption;
  • disciplined around 900 employees, including dismissals.

Reinforcing cultural change

Realising that cultural change needed to be reinforced, Siemens continued its internal reviews throughout the next twelve months, identifying hundreds more cases of malpractice.

Continuing coaching of executives and employees centred around the new corporate culture, until a time when the executive charged with supervising the new culture of ethics and compliance declared, “We are quite confident we have eliminated anything systemic.”

Then he added, “But it’s never over.”

And, perhaps, this is the biggest takeaway for CEOs today. Corporate culture permeates through systems, processes, and procedures. If you want to really change corporate culture and maintain that change, you’ll need to strategize for change management to intervene in all three simultaneously and with the full support of senior and middle managers.

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