For two and a half years, the IT group of a global manufacturer with over 90 sites on four continents, attempted to implement a new business model without success. While senior leadership was confident in the simplicity and soundness of the model, middle managers seemed dedicated to challenging it rather than understanding and adopting it. Time was running out. If they didn’t find some way to change their trajectory dramatically in 18 months, not only would the organization as a whole suffer, but the IT group would be outsourced.
B STATE Approach
Prior to considering a B STATE approach, the company had worked with two world-renowned international consulting groups, failing to make any significant progress. Instead of doing a top down approach, a B STATE Strategic Roadmap was developed with the senior team which determined the effort would start with and depend on a group of 55 middle managers that were convinced the new model would not work to drive it. It was a radical approach that no one had considered or dared to attempt.
1) Presented the External Drivers and Needed Responses Rather than sell a solution to the middle managers, senior leadership simply presented the reality of the current situation and set the expectation that the group had collective responsibility to agree how they, as the operational leaders, would respond.
2) Implemented a B STATE Leadership Accountability System By expanding on the drivers and responses presented, the whole group created a common Picture of Success and new Collective Habits of Execution to bring that picture to life. Upon reflecting on what they had created, they decided the new business model was the most direct way to address the situation. They then formed into 5 teams to address the project plan, communication plan, and culture change plan they would need in order to be successful. They also formed a steering committee to keep everyone coordinated and on track.
3) Provided protected time and consulting support for each project team
4) Held two formal measurement and adjustment sessions at 6 and 9 months
5) Trained Leaders in B STATE Leadership Competencies
Implementing a new model required new leadership competencies. Middle managers used the B STATE Performance Coaching System for selecting and mentoring leaders to be cross-functional, business owners, and partners.
Immediate Culture Shift
- By the end of the first working session, the middle managers presented back to Senior leadership and started by saying, “We get it. We are the ones that need to make it happen. Here is our plan.” Senior leadership was both dumbfounded and at the same time couldn’t be happier.
- Teams reported that they were aligned across functions and are no longer engaged in silo behavior. All efforts were now focused in a unified way on the difficulties of the new technologies and business challenges related to the definition or implementation in the business environments.
- Team spirit and teamwork rose dramatically.
- The Senior Leadership Team also began to demonstrate a new level of solidarity when in front of internal teams and in regard to business concerns.
Rapid Breakthrough Results
During the early months of the effort, the middle managers realized that to implement this model successfully, they lead a corporate initiative to change the way each manufacturing group did their strategic planning process. They whole-heartedly accepted this challenge because they were committed to the outcomes of the effort.
In just 9 months (only half the 18 months allotted for the change):
- The new business model was implemented with every business unit in the company resulting in a savings of 45 million Euro going directly to the bottom line
- 50% of all projects were meeting schedule, cost, and deliverable milestones, in contrast to a previous 10%.
- 100% of the 7 most important projects were on time, on budget, and meeting deliverables
- They reduced their project load from 1300 projects to 240 projects
- Middle Manager Collective Habits of Execution improved dramatically, showing a 75% increase overall from the initial baseline
- Middle Manager Team relationships improved on all 15 measured areas, including meetings, decisions, trust, communication, confrontation, and accountability
- By month 6, the middle management team integrated one of its major vendors into their team meetings and presentations, extending the internal level of collaboration to external vendors
- By month 9, the decision was made to transform vendor relations from a customer/supplier model to a true partnership model for their key vendors