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Tag Archives: Business Transformation

The 3 Effective Tests of Assessing Human Dynamics of the Board

16 Mar

Many Boards have improved their structures and processes. Yet, despite all the corporate-governance reforms undertaken, many Boards failed the test of the financial crisis. This shows that even if the Board of Directors is stacked with high qualified members and best practices, these are not enough.

Human Dynamics has come to fore in today’s highly volatile business environment. Without the right Human Dynamics, there will be a little constructive challenge between independent Directors and Management, no matter how good the Board’s processes are.

Without Human Dynamics, the Board’s contribution to the company’s fortune is likely to fall short of what it could and should. This is also a concern for executives who are not Directors but report to the Board. Without Human Dynamics, it makes it difficult for them to develop healthy and productive relationships with their Boards. This can have a dire effect on Strategy Development or when organizations are undergoing Business Transformation.

The Importance of Human Dynamics

Human Dynamics is an organizational state where collaborative CEO and Directors think like owners and guard their authority. Without the right Human Dynamics, there will be a little constructive challenge between independent Directors and Management.

Why is Human Dynamics important? When there is a lack of Human Dynamics between CEO and Directors, this can lead to an ineffective performance in the Boardroom. Board’s contribution to the company’s fortunes will fall short of what it could and should be. Non-director executives will have difficulty developing a healthy and productive relationship with the Board. Most importantly, aspiring Directors will be unable to learn what it means to be a good corporate Director.

This can be detrimental to the organization and can direly affect its competitive advantage. However, achieving the right Human Dynamics is not easy. Understanding and identifying the contours of such a fluid interpersonal exchange can be a challenge to both the Board and the CEO.

The 3 Tests in Assessing the Board’s Human Dynamics

While it may be a challenge, building the right Human Dynamics between the CEO and the Directors is essential.  There are 3 Tests executives can use to guide them in assessing the Board’s Human Dynamics.

  1. Board Ownership Mindset. Currently, outside Directors continue to be passive participants. They do not challenge Management beyond asking a few questions during Board meetings. This test is focused on building Boards to be vital stewards of the organization.
  2. CEO Collaborative Mindset. CEOs nowadays are failing to inform or involve the Board on critical developments such as merger discussions. As a result, there can be a breach of trust which can cost the CEOs their job. The second test ensures that a collaborative CEO is in place.
  3. Board Authority & Independence. The third test is focused on enabling the Board to protect its stand and independence. This is necessary when the authority of the Board is being chipped away as the CEO experiences greater success. There is also less robust questioning of Management’s proposal or worst, the readiness of the Board to agree to unreasonable demands on executive remuneration.

The 3 Tests for Boards is an effective guiding principle in developing the right Human Dynamics between the Board and the CEO. When it comes to well-functioning Boards, best practice structures are not enough. It is essential that the right Human Dynamics exists as it can help the Board and Management to fulfill their potential.

Interested in gaining more understanding of Board Excellence through Human Dynamics? You can learn more and download an editable PowerPoint about Board Excellence: Human Dynamics here on the Flevy documents marketplace.

Are you a management consultant?

You can download this and hundreds of other consulting frameworks and consulting training guides from the FlevyPro library.

Business Process Reengineering (BPR) Implementation Guidelines: Preventing the Risk of Failure

11 Mar

Business Process Reengineering (BPR) can be a great success but it can also be a great failure.

After months or years of careful redesign, organizations can achieve dramatic improvements in individual processes.  However, a paradoxical outcome has become almost a commonplace. Organizations suddenly find themselves watching the overall results decline. Process costs were reduced by 34% yet operating income stalls.  Claims process time cut by 44% yet profits drop. It seems that organizations are squandering management attention and other resources on projects that look like winners but fail to produce bottom-line results for the business unit as a whole.

Reengineering can actually deliver revolutionary process improvements and many organizations have been undertaking major reengineering effort.   However, like any major change program, a reengineering project can produce lasting results only if it is designed and implemented the right way.

Implementing Business Process Reengineering

BPR implementation is a series of waves that can wash over the organization for years, leaving a system for continuous improvement. It must be undertaken with a clean slate approach to process design. Only then can companies avoid a classic reengineering pitfall of focusing on fixing the status quo.

Implementation of the Business Process Reengineering requires that new infrastructures are planned and built to support this Business Transformation. The full commitment of senior executives on its redesign and implementation must also be present to ensure the success of the reengineering project.

It is essential that organizations have a good understanding of the success factors, as well as root causes of failure.  While reengineering projects can succeed, it can also fail.  There are 4 practices that are the most damaging.

The 4 Root Causes of Failure

The root causes of failure remain a challenge for organizations.  These are 4 causes they must watch out for to achieve a successful BPR implementation.

  1.  Assign average performers. This is the tendency of organizations to enlist average performers from headquarters. This often happens because of an existing belief that assigning top performers will affect the business unit’s performance.
  2. Measure only the plan. Measuring only the plan happens when there is a lack of a comprehensive measurement system.  The organization also fails to track whether the implementation is succeeding or failing.
  3. Settle for the status quo. Settling for the status quo is a very deadly decision or reaction. When this happens, aspirations are never translated into reality. There exists the inability to think outside existing skill levels, organizational structure, or system constraints. Further contributing to this is the existence of political infighting on incentives and information technology during implementation. When this exists, often the decision is to maintain a status quo that could be debilitating to the organization.
  4. Overlook communication. During BPR implementation, there is a tendency to overlook communication.  Probably due to a lack of proper understanding, the level of communication is underestimated during implementation. Often, communication is done using memos, speeches, or PR videos.  While these may have its purpose, at times these methods can be limiting.

BPR implementation requires a small group format where employees can give feedback and air their concerns.  This may be time-consuming but it is important. In fact, organizations must create a comprehensive communication program that uses a variety of methods of communication.  When this is undertaken, the chances of succeeding during the BPR implementation is high.

BPR implementation is most crucial.  Hence, organizations must have a keen eye, as well as strong leadership development and commitment, to pursue it despite its challenges. BPR implementation is a series of waves that can wash over the organization for years. Hence, a system of continuous improvement must be in place.

Interested in gaining more understanding of Business Process Reengineering (BPR) Implementation Guidelines? You can learn more and download an editable PowerPoint about Business Process Reengineering (BPR) Implementation Guidelines here on the Flevy documents marketplace.

Are you a management consultant?

You can download this and hundreds of other consulting frameworks and consulting training guides from the FlevyPro library.

How to Use Leavitt’s Diamond to Achieve Change

5 Mar

“The only thing that is constant is Change.” – Heraclitus

An epidemic of change is happening globally–reengineering, restructuring, and revamping! Workplaces seem to be launching one change initiative after another.  Digital Transformation is happening everywhere. Yet, the hard truth is that many change initiatives fail.

Change Management initiatives fail because of the way organizations view change. Often, change is seen as an isolated process. Organizations tend to focus on only one part of the organization in isolation. This can be a fatal error.

Everything in an organization is connected, and changing one piece can impact another. Hence change can only be successful if all interconnected pieces are considered. In 1965, Harold J. Leavitt designed an integrated approach to change, the Leavitt’s Diamond.

What is Leavitt’s Diamond?

Leavitt’s Diamond is a framework for understanding the connection between the key factors in an organization, and building an integrated change strategy. This is an essential element in Strategy Development.

The Structure, Tasks, People, and Technology are the 4 essential components of the Leavitt’s Diamond.

  1. Structure – The Structure refers to the organization’s hierarchical buildup and the layout of the various departments. However, this is not limited to its hierarchical buildup. It can also refer to the mutual relations that exist between departments and employees, the coordination between various levels of management, and the communication patterns.
  2. Tasks – The Tasks refers to the functions individual employees are assigned within their jobs. This relates closely to the organization’s goals on the strategic, tactical, and operational levels.
  3.  People – These are your people – your staff, your employees. Beyond its physical countdown, this component also refers to all skills, competence, knowledge, and efficiency that employees bring to the organization.
  4. Technology – Technology refers to the upgraded machines and devices, as well as systems and software applications that build up the performance of tasks within an organization.

Between these 4 components, there must be the right balance. Only then can change be successfully implemented.

From the Drawing Board to the Ground Running

Having a good understanding of the Leavitt’s Diamond is important for organizations. However, the most critical is having it on the ground running. Each of the components must be identified, defined, and determined–your main tasks, your people, your tasks, and structure.

This is critical because you are building a basic framework for starting the change model. Without the right balance of Structure, People, Tasks, and Technology, the Business Transformation necessary will never occur.

Organizations must also take note that a primary change will always have an impact on each of the 4 components. A change in one component comes with changes in other components of the Leavitt’s Diamond. When this happens, there is a need for necessary adjustments.

Taking The Impact of Change on Tasks As an Example

  • Change in People Component: Training or specific hiring policy can change staff and employees’ knowledge and expertise.
    • What is the impact on Tasks? There is a change in individual tasks within the employees’ job.
  • Change in Structure Component: Restructuring of departments, change in the arrangement of job positions, or even reorganization.
    • What is the impact on Tasks? A different way of working is expected from employees to include different ad/or additional tasks.

This is also expected when there is a change in Technology and a corresponding impact on Tasks. Organizations must need to take note that changes in any component must be aligned with changes in other components. Again, there must be a balance for Leavitt’s Diamond Change Model to succeed.

Interested in gaining more understanding of the Leavitt’s Diamond Change Model? You can learn more and download an editable PowerPoint about Leavitt’s Diamond here on the Flevy documents marketplace.

Are you a management consultant?

You can download this and hundreds of other consulting frameworks and consulting training guides from the FlevyPro library.

The 6 Core Capabilities of a Customer-centric Organization: Your Ammunition to Winning a Highly Demanding Customer

25 Nov

In this age of digital disruption, how can organizations engage customers, increase Customer Loyalty, and achieve profitable growth?

Today’s customers are better informed, better connected, and more demanding than ever before. CEOs are now concerned about Customer Loyalty and they recognize that mastery of the customer agenda is essential. In fact, global leaders of successful businesses recognize that creating a customer-centric, digitally-transformed business is a top priority.

Almost every market is experiencing a fundamental change. Consumer expectations have shifted and digital technologies are making the biggest impact on businesses large and small since the start of the information age. Ultimately, businesses need to navigate the challenges of digital disruption and find new ways to create economic value and drive growth.

The challenge today is what it takes for organizations to be a Customer-centric Organization.

Unraveling the 6 Core Capabilities of a Customer-centric Organization

A Customer-centric Organization must have 6 Core Capabilities to compete in the Digital Age. In this global time, customer-centricity ceases to be a differentiator. It has become a matter of survival.

The first 2 Core Capabilities are Customer-directed. These are Customer Strategy and Customer Experience (CX).

  1. Customer Strategy. The first core capability, Customer Strategy is focused on addressing changing customer needs and behavior. It involves the development of a clear view of customer behavior and intentions using data and analytics. Customer Strategy can be applied in several ways. It can be used to refine and develop a proposition or even inform major investments in new media content.
  2. Customer Experience (CX). Customer Experience (CX) is that core capability that generates a significant competitive advantage – a double revenue growth against industry counterparts. It is being able to respond to customer needs balanced with understanding the values customers bring to the enterprise. The world’s most advanced customer businesses often undertake customer journey mapping and experience design which are critical to executing customer-centric change.

The second 2 Core Capabilities focus on front office capability and across the enterprise value chain. These are Sales & Service Transformation and Connected Enterprise.

  1. Sales & Service Transformation. As the third core capability, Sales & Service Transformation is essential to becoming a customer-responsive business. This is a newly digitized and fully integrated front office capability that can attract, engage, acquire, and continually engage with customers. With the modernization and transformation of front office functions, Marketing, Sales, and Service teams get to have better ideas on how to work together more effectively. This leads to a full end-to-end Business Transformation.  A core concept to Service Transformation is the development of Service 4.0 capabilities.
  2. Connected Enterprise. Focused on delivering differentiated Customer Experiences, Connected Enterprise is an architecture of fundamental capabilities that work across the Enterprise Value Chain, from back office operations through customer-facing interactions. The application of Connected Enterprises has led to companies experiencing an increase in annual revenue and a positive return on investment.

The third 2 Core Capabilities are Data & Analytics and Digital Transformation — your company’s response to a highly demanding digital market.

  1. Data & Analytics. The fourth core capability is Data & Analytics. This core capability is focused on creating actionable insights that drive profitable growth. With the use of Data & Analytics, it can uncover patterns of customer behavior, relevant social media influencers, and channel preferences. It is useful in personalizing propositions, channels, marketing communication, and the experiences offered to customers.
  2. Digital Transformation. The sixth core capability, this is the core capability that can power new ways to engage customers, optimize operations, and transform products. Digital Transformation is delivering the right customer and digital technology. With the advent of virtual reality, augmented reality headsets, the Internet of Things, AI, and cognitive computing, it has changed the way customer-centric companies engage customers. Digital Transformation is not an overnight event. This is a series of incremental steps, each delivering a concrete business advantage.

Developing the 6 Core Capabilities is no easy task. It can be pretty challenging. Companies need to have a good handle of its key challenges and the right approaches to mastering the 6 Core Capabilities. When this is achieved, the high road to global competitiveness is achieved.

Interested in gaining more understanding of these 6 core Capabilities of a Customer-centric Organization? You can learn more and download an editable PowerPoint about the 6 Core Capabilities of a Customer-centric Organization here on the Flevy documents marketplace. There is a series of 3 presentations – Part I, Part II, and Part III that discusses all 6 Core Capabilities.

Are you a management consultant?

You can download this and hundreds of other consulting frameworks and consulting training guides from the FlevyPro library.

When Critical Situations Call for a 911 Rescue: The 10 First Steps to Crisis Management

18 Oct

Never before has Crisis Management been considered important.  With businesses being exposed to a disruptive environment, the emphasis on Crisis Management has never been more profound.

“The secret of Crisis Management is not good vs. bad, it’s preventing the bad from getting worse.”- Andy Gilman of Comm Core Consulting Group

An organization is considered to be undergoing a crisis when there is a sudden and unexpected event leading to major unrest amongst the individuals at the workplace.  It is an emergency situation which disturbs the employees as well as leads to the instability of the organization.  When this occurs, organizations are expected to have critical documentation and process, e.g. Crisis Management Plan, Disaster Recovery Plan, Business Continuity Plan, etc., in place.

Crisis Management is the art of dealing with these sudden and unexpected events which disturb the employees and organization. Yet, often companies are like the metaphorical frog that doesn’t notice the water it is in is warming up until it is too late.  There are managers who either do not realize that they are in a crisis or their crisis situation is worsening.  The early signs of distress are often missed.  While they are not bad managers, these are managers that are under a set of paradigms that no longer apply and just let the power of inertia carry them along.

As a result, organizations in crisis find themselves faced with a potential cost that is greatly significant.  This can lead to longer recovery time, a direct impact on downtime, and lost revenue.

First Things First: Taking a Good Handle of Crisis Management

Crisis Management is the application of strategies to enable organizations to deal with a disruptive and unexpected event that threatens to harm the organization or its stakeholders. It is a situation-based management system with clear roles, responsibilities, and processes. In Crisis Management, it requires a crisis mindset. A crisis mindset is the ability to think of the worst-case scenario while simultaneously suggesting numerous solutions.

Being well prepared for a crisis is the epitome of Crisis Management. It ensures rapid and adequate response to a crisis and maintaining clear lines of reporting and communication in the event of crisis.

Yet, often the organization and communication involved in responding to a crisis in a timely fashion provide the most challenge to business. Responding to crisis in the most effective way can be done by taking the 10 First Steps.

The 10 First Steps to Crisis Management

The 10 strategic First Steps are the organization’s guide when in crisis and there is a strong call toward initiating organizational change.

The first 4 steps focus on Culture and Leadership.

  1. Establish a Wide Perception of Distress
  2. Establish a Crisis Mindset
  3. Activate the Board as a Crisis Detector
  4. Change Top-Team Members

The first 4 steps will widen one’s understanding of distress and move people to actions at the time of crisis. It is at this stage that the Board will be empowered to see the forest for the trees and can enable organizations to focus on tough movers that can successfully make organizational changes.

The 5th step focuses on Change Management.

  1. Communicate a Great Changed Story

Communicating a Great Changed Story can create positive motivation to spur action towards change. When Change Management starts evolving, the organization is now ready to advance towards Business Transformation.

The 6th to 9th steps focus on Business Transformation.

  1. Integrate Trigger Points
  2. Have a Strong Cash Position
  3. Focus on Quick Wins
  4. Make Target-focused Incentive Plans

Business Transformation starts when trigger points are integrated and a strong cash position is maintained. Management can focus on quick wins to create a trajectory effect to spur actions and develop target-focused Incentive Plans to achieve a successful turnaround.

The 10th and final step is sustaining the gains through effective Talent Strategy.

  1. Retain your Talent

The final step is Retaining your Talent. It is recognizing those that can make a difference and finding the next level of talent that can create and sustain change.

Organizations can build its Crisis Management capability following the 10 first steps.  Crisis Management is not anymore a matter of choice; it has become a necessity.

Interested in gaining more understanding of the first 10 steps to surviving a crisis?  You can learn more and download an editable PowerPoint about Crisis Management: 10 First Steps here on the Flevy documents marketplace.

Are you a management consultant?

You can download this and hundreds of other consulting frameworks and consulting training guides from the FlevyPro library.


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