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Case Studies

| Global Commodities Trader | Oil Major Global IT Transformation |

Global Commodities Trader

A Challenging Transformation Damages Morale

Following a 2 year period of extensive cost and staff reduction, morale in the back office of this global commodities trader was low. Employee Satisfaction Survey results were at a historic trough and managers reported that only the weak economy ensured staff retention. Low levels of engagement created 3 problems:

  • 1) Diminished productivity and effectiveness of staff who felt let down by their employer
  • 2) Increased risk of employee turnover, in particular of those with highly sought-after technical skills
  • 3) Risk of loss of status as an aspirational employer, adding time and cost to the recruitment process

Trained Observation Reveals the Causes

As always, my first job was to identify the root causes of anger and low morale. I added supplementary questions to an existing regular survey. I followed up on the answers to these with focus groups, lead both by myself and people in the organization with the right skills. I supplemented my understanding with informal interviews, and discussed findings with leaders of the organization. I found that they had become locked in 3 cycles of behaviour which were pushing morale down:

  Forces affecting employees Forces affecting leaders
Use of contractors Employees felt that contractors were over-used and that contractors received preferential advancement opportunities. Many top-level leaders were recently promoted and relied on highly skilled contractors in senior positions. Slow employee recruitment cycles hampered genuine efforts to manage down the contractor population.
Change fatigue Extensive cost-reduction, outsourcing and other change initiatives had been continuing for 2 years. Changes appeared ineffective and poorly coordinated, adding cynicism to fatigue. The leadership team had no choice but to continue the change programme imposed by other areas of the business. They could not commit to a period of stability and anticipated further changes.
Distance from power Employees saw senior leaders as remote, inaccessible and therefore ill-informed about the impact of the change programme. Cuts had reduced the number of senior positions, and those occupying them had to prioritize delivery over staff engagement.

While low morale was partly the result of forces beyond the control of the organization’s leaders, if they were to fix it, they would have to take control.

Addressing the Ill-Feeling and Going for Growth

I put in place short-term plans that would address the ill-feeling over a period of 3 months, but also made provision for longer-term changes that would ensure the organization’s morale was more resilient to future changes.

The short-term interventions relied on 3 key insights:

Insight Purpose Actions
The 2nd layer of leadership actively sought opportunities to engage with staff at all levels. They were well placed to fill communications gaps left by the leaders Make greater use of the 2nd layer of leadership • Set up a series of institutions for2nd-level   leaders to engage staff in groups across   teams

• Managed the collection and synthesis of   feedback from such events

• Openly followed up on feed- backreceived

• Tracked the engagement activitiesof each   leader

• Ran frequent social events for staffat all   levels to mingle
Advancement opportunities were the most powerful motivator for most staff, but access to them was poorly understood and became a cause of resentment Ensure advancement was considered fair and transparent • Ensured existing career planning   mechanisms were followed more   consistently

• Implemented Staff Recognition   Programme   to provide instant public   rewards for   high-  achievers
Foster pride in the success of trans formation activities Change programmes had been presented as finite breaks with routine; staff expected completion and return to normalcy. The longer they went on, the greater the perception of leadership failure • Communicated and celebrated the   benefits   realized by change programmes

• Sought – and acted on – input from staff on   the implications of planned changes

These actions generated results fast, but what was still missing was a sense of unity of purpose and identity across all levels of the organization. Leaders had well-founded concerns that the launch of a new initiative to resolve this would merely add to the change fatigue.

2 years prior to these events, however, they had launched a values framework, although roll-out had been sporadic. I took advantage of this to launch a series of activities designed to focus staff attention on adopting the behaviours set out in the framework. This approach offered 2 important advantages:

  • 1) The efficiency of building on a piece of existing work
  • 2) The credibility gained from revisiting an incomplete initiative and completing it

The unifying effect of revisiting and adopting these corporate values moved staff away from the view that leadership were changing the organization and towards the view that every member of the organization owned and was responsible for a successful programme of change.

High Impact is Achieved Quickly

As a result of the actions taken, we saw dramatic improvements in our employee satisfaction survey scores after just 4 months . Highlights included:

  • An average of 14% improvement from the previous year across all questions – comfortably the highest across all comparator groups
  • An unprecedented increase of 24% in satisfaction with internal communications

Management at all levels reported increasing morale and commitment Relationships with front-office counterparts became measurably easier and more productive. By the end of 2010, they will know exactly how this has translated into employee retention, reduced sick-days and productivity, but anecdotal evidence to date suggests significant improvements in all 3.


Case Study 2: Oil Major Global IT Transformation

Transformation of the IT Function Damaged Engagement

The global IT function of this Oil Major was transforming to reduce costs, improve delivery and simplify decision making and processes. The function had an annual budget approaching $3 billion and its 4000 employees and contractors were distributed across many 10’s of countries. By the end of the transformation, costs would be reduced by a third and people more almost half.

Three overwhelming engagement risks emerged:

  • 1) Loss of budget for treasured projects, loss of long-held decision rights and severe cost pressures removed from staff at all levels their sense of autonomy
  • 2) The Transformation was necessarily highly complex, with each team and individual affected by a unique combination of different sub-projects at different times: employees distrusted the Transformation because they did not understand it
  • 3. Each employee was required to undergo a professional assessment, contributing to a (well-founded) fear of job losses in a difficult economic environment The Change Ambassador Programme Created a Sense of Involvement

As leader of the Change Management team, the high levels of anger and concern across our worldwide teams became clear to me. Past efforts at transformation had failed, and the success of this one was at considerable risk from ill-will and cynicism from the department’s usually passionately committed staff.

The complexity of the transformation was a barrier to communication: to explain all the initiatives would take days. I recognized the need for a Change Agent network to improve communication, but saw no practical way to train Change Agents to explain the Transformation.

I therefore set up the Change Ambassador Programme purely as a listening device. Change Ambassadors from each office were selected for their influencing and communication skills and I arranged training in focus group facilitation and other relevant techniques.

The Change Ambassadors were tasked with seeking input from across the department on key initiatives. For example, one programme had the goal of creating a single helpdesk for all 100,000 users around the world. By using focus groups to seek input into the design of this, we gained 2 important advantages:

  • 1) The programme team gained valuable insights by gathering perspectives from as far afield as Pakistan and China
  • 2) Everyone in the IT department had a genuine chance to input into the project: because their advice had been sought in good faith, they were far better disposed to the transformation overall

The Change Ambassadors eventually became an established part of the IT department’s operations, with the group CIO in particular welcoming the reliability of the feedback they provided. In the upstream organization, time spent as an Ambassador is now considered an important part of employee development.

The Change Ambassadors Were a Key Success Factor

The IT transformation had every reason to be hugely unpopular: many lost their jobs and many others their actual or imagined status. Thanks to the Change Ambassador programme, however:

  • The group CIO remained a respected and popular figure, even during the most challenging periods of the transformation
  • Rather than bitterness and incomprehension, most staff came to feel pride in their contribution to the various initiatives
  • Levels of pride, confidence and discipline during and after the transformation greatly exceeded those experienced before