Case Study: Changing The Way We Change

by Norman Chorn

Changing The Strategy in an Engineering Business

Our team had a valuable experience working on a change program for an international engineering business during June - October 2021.

The business was engaged in a strategic shift to reduce its reliance on equipment sales into a specialist sector (declining margins) and move towards providing a full service offering that included software and consulting services (potentially higher margins).

Although the shift made strategic and financial sense, there were several barriers to change to overcome, in order to execute the strategy successfully. These included:

Many of the middle managers and staff had strong backgrounds in the operation and maintenance of this equipment in the highly specialised sector
The software — used to operate and integrate the equipment into the customers’ businesses — was considered by middle managers and staff to be a low level ancillary product
The training and education services that assisted customers in the proper use of the equipment was considered ‘low value’ and not thought of as ‘core business’ — and was usually performed without charging a fee.

In summary, there was strong resistance amongst managers and staff to the idea of becoming, what they termed, a ‘service business’, despite the potential financial and longer term strategic advantages.

The Change Process

Given the professional nature of the workforce, it was clear that in order to get commitment for the new strategy, we had to use an approach that engaged people in the development of the new strategy.

While this was likely to take longer — and we were unable to fully control the outcomes, leadership agreed that this was the best approach.

We developed a process that would allow us to benefit from the diverse views held by all staff. This involved a series of workshops (we called them ‘experiments’) to figure out the best way forward.

While this took a little longer, it allowed us to agree with staff on the best program for changing the business. As can be seen from the table below, the program differed quite considerably from the traditional change management approach:

What Did we Learn?

A change program is essentially a learning process. People began to understand the goals and benefits of the change as they became involved in developing the new strategy and how it should be implemented
You can’t always predict the outcomes from change programs. A number of elements in the new strategy were quite different to the initial views held by senior management. In some cases, they were significantly better because they incorporated views from people directly involved with the customers
The ‘best practice’ ideas that originate from other examples may not be the best practice in a different setting. We found that some of the practices that were successful for other organisations simply did not work in this business
In order to get commitment to the implementation of a new strategy, you need to give people the opportunity of involvement in its design and development.

About the Author

Dr Norman Chorn is a highly experienced business strategist helping organisations and individuals be resilient and adaptive for an uncertain future. Well known to many as the ‘business doctor’!

By integrating the principles of neuroscience with strategy and economics Norman achieves innovative approaches to achieve peak performance within organisations. He specialises in creating strategy for the rapidly changing and uncertain future and can help you and your organisation.

Get In Touch With Norman

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Part 3: Accelerate Performance With Strategic Alignment - Develop The Appropriate Culture

By Norman Chorn • 27 Mar, 2023

In my previous article "Accelerate Performance with Strategic Alignment - Define the logic of your strategy", we demonstrated the alignment between the market and business strategy by matching the logic of the market with the logic of the strategy. The Explore logic emphasises a market where customers seek new solutions for emerging requirements. The strategy responds by exploring new opportunities and driving for growth. The Exploit logic occurs in a more stable market where customers seek lower costs and reliability of supply. The appropriate strategy focuses on operational efficiency and building close customer relationships. Culture is key to shaping the capabilities of the business to successfully implement strategy . It drives the way that people behave, decisions are made and actions are taken. It determines, therefore, the strategy that is actually realised in the market, as opposed to that which is merely intended. We make a key distinction between the desired culture and the appropriate culture. The desired culture is what people may choose because it sounds attractive and in vogue. However, the appropriate culture is the culture that is required to successfully implement the chosen strategy. Often, these can be different. For example, people might seek to develop a culture that is ‘innovative’, ‘flexible’ and ‘empowering’, but this may not be the appropriate culture needed to successfully implement the business strategy. DEVELOP THE APPROPRIATE CULTURE FOR YOUR STRATEGY Developing the appropriate culture requires a deliberate emphasis on certain cultural attributes and making trade-offs on others. As we will see, the attributes that are traded off are usually the opposites of those that are emphasised.

Part 2: Accelerate Performance with Strategic Alignment - Define the Logic of your Strategy

By Norman Chorn • 27 Mar, 2023

In Part 1 "How to Accelerate Performance with Strategic Alignment - Understand the Logic of the Market" we outlined different market conditions and defined them in terms of two overarching logics — Exploring and Exploiting . To briefly recap, an Exploring logic is one where customers are seeking new solutions for emerging needs. It’s all about change and action. An Exploiting logic occurs in a more stable market in which the issues are about lowering costs and working collaboratively with customers. It’s a market that focuses on stability and cohesion. FORCES THAT SHAPE YOUR STRATEGY Clearly, it is one of these two logics — or a combination of both — that will shape your strategy as you operate in these markets. See figure 1 below that describes how these logics will form your business strategy: