Leading FMCG Company in W.A Table of Contents Background and - - PowerPoint PPT Presentation

Transformation Programme of a Leading FMCG Company in W.A

 Background and Context  What was their Ambition?  What was their change framework?  How did they apply the change framework?  All’s Well that Ends Well

Table of Contents

2

The Case for Change

3

Costs

Analysis of peer competitors showed that there were significant opportunities for ABC to:

• Reduce its marketing and overhead costs.
• Improve its operating margins.

Complexity and Scale

ABC operated as a federated business. Each Market did things a little differently. Functions were not fully integrated – they were not joined up. This meant it was difficult:

• To operate across geographic boundaries.
• Fully leverage our global scale.
• Be nimble, agile and cost-effective.

External Pressures

Their industry faced significant challenges which threatened future growth:

• Sharp excise increases.
• Growing illicit trade in many Markets.
• Changing consumer behavior.
• Increasing regulation.

To build a truly Global business and create long-term sustainable growth, ABC Plc. needed to change the way it

• perated.

Our competitors spend £536M less than we do on Marketing and Overheads. (Competitive Report 2008)

NTO mix will shift even more towards developing markets An unbalanced consumer equation will constrain growth Regulation erodes our value proposition ABC has performed well

• f tobacco through

• where. While there

• n
• ne-to-one comms

• n

195 208 187 161 146

GDB volume

9% CAGR

Developed markets Developing Markets

The changing commercial environment created a need to change

GLOBAL CASE FOR CHANGE

INTERNAL COST REVIEW RESEARCH ANALYST REPORTS COMPETITIVE COMPARISONS

Increase in total costs (Centre + Regions):

• £500 million (2000 adj.)
• £800 million (2011)
• = £1200 million (54% in real terms)

...and growing

• ‘Back office’ is £500m more expensive than peers
• DEF is £500m cheaper in Marketing and Overheads
• ABC Operating Margin:

35.8% (2011)

• DEF Operating Margin:

44.2% (2011)

• GHI Operating Margin:

42.3% (2011) Our cost base needs re-engineering. It is completely unacceptable that we can sit on a cost base that we know is not the most efficient in the industry

“

Company Leader, 2011

“

GLOBAL CASE FOR CHANGE

WEST AFRICA CASE FOR CHANGE:

KEY CHALLENGES

INCREASING ILLICIT FIERCE COMPETITION REGULATORY RESTRICTIONS EXCISE SHOCKS INSTABILITY IN ENVIRONMENT

This programme is a key enabler for West Africa. The programme will deliver the standardised processes, systems and organisational capabilities needed to simplify our business and to embed increased focus and discipline in support our Regional growth ambitions. - Senior Executive

 Background and Context  What was their Ambition?  What was their change framework?  How did they apply the change framework?  All’s Well that Ends Well

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New Operating Model

It was not just about organisation structures…

Upgrading IT systems and building new IT capability:

• APO, Nexus, Core

SAP, BPC, etc. Clear governance frameworks

• e.g. One Marketing

Transition plan to New Org structures Consistent master data:

• e.g. Asset Class,

Brand, Product, Pricing Globally and regionally standardised KPI’s End to End Business process

Risks and controls embedded in the process Opportunity to clean up redundant entities and structures

WHAT DID THE CHANGE MEAN TO ABC?

ABC needed…:  Broader missile launches through strategic portfolio  Faster deployment and rollout of innovations  Simplified and standardised ways of working  Business insight for better decision making  A truly global enterprise, global investment decisions and resource allocation

“

My expectation is to have a leaner, fitter, more agile and transformed ABC, growing with the backbone of our people,

• ur brands and our products.

“

Company President, 2011

“

“TRANSFORMATION”

CHANGE SUPPORTING TRANSFORMATION

Four of the top 5 are people issues Top 7 relate to people

0% 20% 40% 60% Changing mind-sets and attitudes Corporate Culture Complexity underestimated Shortage of resources Lack of senior leader commitment Lack of change know-how Technology issues Lack of staff motivation Change of process 58% 49% 35% 33% 32% 20% 18% 16% 15%

Major Challenges

0% 20% 40% 60% 80% 100% Top management sponsorship Employee Involvement Honest and timely communication Corporate culture Change Agents Change supported by culture Efficient training Adjustment of performance… Efficient organisation structure Incentives 92% 72% 70% 65% 55% 48% 38% 36% 33% 19%

Major Successes

Source: Summary of IBM ‘Making Change Work’ research, 2010.

If the key to transforming the way we run our business was purely in deploying a single instance of ERP – we would have done this a long time ago. Executive When I look at the Programme …. This scale of change management is new territory . Executive

CRITICAL SUCCESS FACTORS

15000+ 1000 5000 100

100 GMs and Top Teams who understand how their business is changing and reinforce the right behaviours and ways of working to embed the change and deliver benefit People trained and enabled to do their jobs effectively Managing the transition of ~5000 people into new roles effectively and minimising disruption Bringing 1000 leaders on board at the right time to lead the programme in the Regions

Critical Success Factors

 Background and Context  What was their Ambition?  What was their change framework?  How did they apply the change framework?  All’s Well that Ends Well

Table of Contents

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Global Change Framework

Change Outcomes

Case for Change & New Direction Leadership & Sponsorship Stakeholder Communication & Engagement Learning & Capability Development

• Clear case for change for

programme deployment is defined and is understood by, and resonates with, all key stakeholders.

• Vision of how the

programme fits within

• verall Company

Strategy is communicated.

• People at all levels and

across all Regions are committed to the change.

• People understand the

role they need to play to achieve the planned benefits.

• Leaders are aligned to the

case for change and demonstrate their visible commitment by incorporating the messages at Leadership Team meetings and functional meetings, and in discussions with staff.

• Leaders have engaged with

stakeholders to gain their support for the change.

• Leaders role model the

desired behaviors and ways

• f working, in particular:

collaborative interaction with impacted functions.

• People empowered for

Change, are prepared for their role and build energy for the change.

• Buy-in and

commitment is achieved with critical stakeholders, particularly within the Leadership Team, Finance, Operations, Marketing.

• All impacted

personnel are communicated to and engaged with, effectively.

• Employees understand the

new processes and ways of working ahead of the change, and are bought into the need for above-market consistency of all processes.

• Employees are trained in

the ERP and can perform their tasks effectively on day 1 of the change.

• The required behavior

changes, such as working collaboratively cross- functionally and adhering to standard processes, are embedded.

• Learning's are captured and

shared

Change Products

Start Up Preparation Blueprint Realisation Final Prep Go Live

OD As-is vs To-be Change Plan Change Approach High Level CIA Comms Roadmap L’ship Engagement Approach CRA Change Plan L’ship Engagement Approach Organisation Transition Plan Comms Roadmap Detailed CIA Superuser Approach CRA Change Plan Detailed TNA Role to Position Maps Training Content Comms Roadmap L’ship Engagement Approach Training Schedule CRA Change Plan Training Evaluation Report CRA Training Evaluation CRA Comms Roadmap Region AND Local Product Local Product Trainer Prep Plan Stabilisation & embedment plan Stabilisation & embedment plan Stabilisation & embedment plan

Change Plan Activities

Change Success Factors

Personal leadership, drive, behaviour of Leadership Teams Accurate assessment of current reality in organisation - CIA Change is a journey, not a quick fix – “ have patience” Ensure you have adequate and the right resources Change strategy tied to business strategy Engagement leads to: More Energy, Commitment and Pride HR team that can use their initiative, knowledge and skills to support Global guidance & tools Do not reinvent the wheel

 Background and Context  What was their Ambition?  What was their change framework?  How did they apply the change framework?  All’s Well that Ends Well

Table of Contents

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WAY OF WORKING: 3 TIER MODEL

3 TIERS CHANGE MANAGEMENT Global Regional Local

Change Management Approach Organisation Design Communication Approach & Tools Training Approach & Tools Change Management Planning Organisation Design Planning Communication Planning Training Planning & Execution Change Management Execution Organisation Design Execution Communication Execution Training Execution Resource Planning & Execution

WAY OF WORKING: 3 TIER MODEL Global, Regional, Local team responsibilities

Global Regional

• Develops global change and OD guidelines, tools and plans
• Sets strategic direction, standards
• Monitors and signs off global change plan
• Supports the development of change capability in the regions and end markets
• Supports and coordinates localisation of change plan, products and supports stage planning

in the regions

• Provides day to day support to Regional Change Managers and facilitates knowledge transfer

between regions

• Quality assures Regional Change Plans
• Leads the localisation of change management and OD products and supports stage planning

within the region

• Responsible for all change outcomes in the region
• Co-ordinates change management with non programme initiatives
• Develops and implements Regional Change Plan through localisation of global change plan
• Manages and coordinates Regional and Local /End Market change resources
• Provides guidance and support to Local/End Market change leads
• Quality assures Local/End Market team change plans
• Coordinates training delivery across the region
• Responsible for all change outcomes in the End Market
• Localises the Regional change plan for End Market
• Delivers and implements the change plan for End Market
• Co-ordinates change management with non programme initiatives
• Deliver end user training
• Co-ordinates Local super users

End Market

The Team was structured with Global, Regional and Local change resources who had delineated roles and services, however structures were in place to ensure 2 way communication between and within the 3 tiers

ENGAGEMENT COMMITMENT CURVE

Change Readiness Assessment Awareness

Understands the background and case for change

Understanding

• f functional

changes

Blueprint Realisation Go-Live Post Go-Live

Engagement/ Involvement

Understands how the changes impact me

Commitment

Prepared and up skilled to do new role

Adoption

Adopts new ways

• f working

BELIEVE in & LEAD the Change Share EXPERTISE EMBRACE the New Way of Working

Early Engagement – Readiness Assessment

Preparation

Awareness

“What are we doing & Why?

• CIA, Business

• Top Team

• BAU Channels
• GM Speech / Message

• F2F Briefings
• Playback sessions with

• Stakeholder

• Leadership Team

Preparation

STAKEHOLDER & EMPLOYEE ENGAGEMENT

Understanding

“This is the glue for

• ur ambition to be an

integrated enterprise”

• Fit Gap Workshop
• Detailed CIA
• Direct Discussions
• BAU Channels Comms
• Animation

Blueprint

Engagement / Involvement

“We’re all now part of the programme in one way or another!”

• Follow-up of Detailed CIA
• Role to Position Mapping (SAP &

• HRBP & Line Mgr.

• User Acceptance Testing
• Training Trainers, Super users
• Functional Engagements &

• Business Briefings
• F2F Engagement / Stakeholder

• Factsheets
• Process Videos
• 100 Day Countdown

Realisation

Commitment

“We’ve reached the summit - we know we can do this!”

• Training (Users)
• Go Live Campaign

Final Prep

Adoption

“Support growth!” “Deliver better integrated processes, system, WoW and above- market Collaboration” “ We are more efficient, effective, nimble & we reached our target”

• Lessons Learned

HyperCare

KEY MILESTONES – PART 1

Realisation

Start Up & Prep

• 1. Help to provide business context
• 2. QA Stakeholder review
• 3. Agree on cadence of Leadership

• 1. Leadership sponsorship
• 2. Understand objectives
• 3. Satisfy yourselves orgn is prepared

• 1. Understand approach
• 2. Understand impacts to be explored
• 3. Agree treatment of OD
• 4. Provide input on HR policy & practice

• 5. Review outputs

• 1. As per steps 1 – 5 for Detailed CIA part 1
• 2. Understand design principles
• 3. Collate As Is & To Be Organisation
• 4. HR Lead discussion on core differences /

• 5. Agree on integration methodology to provide

• 1. Understand approach
• 2. Ramp up planning
• 3. External partners management
• 4. Cutover planning
• 5. Contingency planning (BCP)
• 6. Go / No Go decision control

• 1. Determine key capability, skills and

• 2. Determine implementation approach
• 3. Plan consultation requirements
• 4. Gain agreement of senior stakeholders
• 5. Update organisation transition plan

• 1. Provision of relevant employee data
• 2. Provision of To Be org structures
• 3. Contribute to discussions through AS

• 4. QA of users to role mapping
• 5. Assist with positioning of potential

Blueprint

Promised Land

Realisation

• 1. QA of ongoing change and comms
• 2. Execution of organisation journey
• 3. Apprise Change Lead of competing

KEY MILESTONES – PART 2

• 1. Guidance on local context
• 2. Determine non-ERP requirements
• 3. Coach on capability framework and

• 4. Assist with Super User Approach

• 1. QA of Plan
• 2. Determine HR resource

• 3. Assist with buy in of Leadership

• 2. Attend / encourage session

• 3. Sponsor Leadership Team kick off

• 4. Review training effectiveness
• 5. Provide advice and feedback

• 2. QA change activities and comms
• 3. Review and update HR BCP
• 4. Sponsor LT involvement and visibility

• 1. Training effectiveness review
• 2. Ensure HR policies / principles lock

• 3. Ongoing review with FLTs
• 4. Update plans to address impacts

Final Prep

 Background and Context  What was their Ambition?  What was their change framework?  How did they apply the change framework?  All’s Well that Ends Well

Table of Contents

25

Our future business became faster & more effective

What did a Post-deployment world look like?

Global process standardisation Disciplined, streamlined and consistent processes for better global collaboration More focused, higher value Centres of Expertise Consolidated strategic capability in global centres of expertise more effectively servicing market needs. Increased capability and specialisation of roles More efficient and value-adding shared services Concentration of increasing amounts of transactional effort into efficient & productive shared service centres Reliable, integrated data and information Reduction in reporting cycles meant End Markets could make decisions more quickly and in a more informed way Simplified, end market-focused organisation Improved and focused support above market for End Markets

A truly global enterprise able to leverage its global scale Greater scale in the Supply Chain Innovations deployed faster and wider creating organic growth Better and more focused brand portfolio in key markets Global brand standards and product specifications Accurate consolidated data facilitating better decision making Greater visibility

• f total costs

Optimised

• rganisation

structures Extended use of Shared Services Automation of manual processes and transactions End Markets focused on customers and delivery An agile

• rganisation

able to adapt fast to change

Business benefits

The project delivered a number of business benefits for ABC

Key Success Factors

 During project execution:

– Visible leadership ownership & support – Organisation continuously kept well informed and engaged – Employee involvement in shaping the change in order to build buy-in &

• wnership for business change

– Successfully deliver the key project milestones and ultimately land the programme with minimal business disruption

 Post Go-Live:

– Ensure programme benefits are fully delivered – Full clarity in terms of roles, responsibilities & new ways of working – Changes & new ways of working are fully embedded and owned by the business – Employees are well equipped in terms of skills & capabilities to perform

• ptimally at their jobs

Key change & communication principles

 Change management approach aligned to global change framework & consistent with the regional change approach  Programme to be maintained as a critical component of the business & NOT separate from the rest of the business  Leverage on existing employee engagement platforms/channels within the End Market  Leverage on available communication & engagement collateral from Global & Regional OC&C platforms  Messaging to be targeted & specific to relevant stakeholder groups  Messaging to be centrally coordinated but delivered across various levels:

– Area-wide – Function-specific – Process-relevant

Delivering changes across the business Rapid deployment Enabling seamless transition to BAU On time, quality, cost and scope Maximising and accelerating of benefits No surprises! A Global Transformation Programme “Adopt not Adapt” Global direction Regionally planned End Market execution Efficiently managed and controlled Consistent and repeatable Growing capability and skills Managing change holistically

… And the Dream Came True