Carol Kennedy

Re-engineering: The human costs and benefits

Abstract Re-engineering—redesigning companies around their core processes to achieve step-changes in performance—is being applied to large numbers of British companies in both manufacturing and service industries. Re-engineering in practice, however, is different from the theory taught in countless seminars in one crucial factor—the people. The elegant process charts and stress on integrating systems through IT tend to leave out the more difficult challenge of managing human change. In the case studies analysed here—Barr and Stroud (Pilkington Optronics) Baxi Partnership and Lucas—performance changes have been dramatic, in Baxis case over a remarkably short timescale. Management has learned more about its people, too, in what motivates and demotivates them, and how they respond to radical change and the demands of new competencies.

Xerox charts a new strategic direction

After a period of restructuring and corporate soulsearching in the early 1980s which succeeded in reversing a serious Japanese threat to its survival in the mass copier market, Xerox adopted intensive new planning techniques to identify its strengths for the future in office products and systems. Out of these has come a new strategic direction for the company, based on a family of technologies covered by the term ‘document processing’.

Changing the company culture at Ciba-Geigy

Abstract Ciba-Geigy, Switzerlands largest chemical and pharmaceutical group, is halfway through a programme of radical culture change known as ‘Vision 2000’. This is partly geared to the altered values of society, including the environmental revolution and attitudes towards the chemical industry. Economic pressures and the need to revitalize corporate attitudes also played a key role, as explained here by president and chief operating officer Heini Lippuner. The principal change mechanism was to regroup the divisions around three ‘pillar’ businesses (providing the bulk of the profits) and four ‘growth’ businesses (earmarked for investment as future pillars), and to encourage more initiative under Robert Watermans concept of ‘Directed Autonomy’. This strategy has been ‘cascaded’ through the global organization by travelling seminars; one of half-a-dozen ‘horizontal strategies’ covering all 14 business sectors. The group expects its cultural change programme to bear fruit in 1994: in the meantime, it has lowered the age profile of the company by retiring everyone over 60 (Swiss retirement is at 65), starting at the top with two of the executive committee.

ABB: Model merger for the New Europe

Abstract The pan-European, pan-global company of the future is already here, and its name is ABB. The question is whether the rapid structural and cultural transformation achieved by merging two mighty national engineering groups, Asea of Sweden and Brown Boveri of Switzerland, could have happened without the iron will of its formidable president and chief executive, Percy Barnevik. ABBs performance as a paradigm of what can be accomplished from a non-EC European base within the space of 4 years suggests that, personalities apart, leadership makes the crucial difference.

The roadmap to success: How gerhard schulmeyer changed the culture at Siemens Nixdorf

Abstract In 1994 Siemens Nixdorf Informationssyteme (SNI), the PC-to-IT services group formed from the merger of two leading German computer companies, was suffering heavy losses in a highly competitive global market and also faced intractable internal problems. The arrival as president and chief executive of Gerhard Schulmeyer, a dynamic former head of ABB America, signalled the beginning of a corporate transformation notable for its speed: Schulmeyer aimed to compress what normally takes a year into a quarter, with all stages being completed in 24 months. His first priority was to mobilise the then 37,000 employees behind a cultural and behavioural change that would make the company an entrepreneurial “ideas factory” focused on the customer. Restructuring the businesses into an ABB-style matrix and changing work processes came later. The four main stages of the transformation were each marked by an interactive event held in Hanover, with results cascaded back into the company via trained change agents and selected opinion leaders. Change processes are now firmly embedded in the business, with “action teams” responsible for devising business process improvements. Ideas are exchanged and problems solved through the intranet and manager-employee meetings called Friday Forums. The two-year programme turned SNIs losses into profit in 1996 and growth has been strong enough in 1996/97 in both segments of the business—IT products and technology services and IT solutions and business services—for a forecast that global sales will surpass DM30bn (they are currently DM15bn) by the middle of the next decade.

The ICI demerger: Unlocking shareholder value

Abstract Britains biggest manufacturing company has made the historic decision, conditions permitting, to demerge into two separately quoted businesses by floating off its ‘biosciences’ operations—pharmaceuticals (the present companys profit leader), agrochemicals, seeds and specialities—while leaving ICI itself to comprise heavy chemicals, paints, and explosives. The decision is the fruit of lengthy restructuring and strategy-making, which started well before the Hanson Group raised the shadow of takeover in 1991. How ICIs strategists reached their solution in the light of increasing pressures and rationalization in the global chemical industry, and how the synergies between ICIs varied businesses were rethought, are explored in tracing the evolution of what will undoubtedly be a key industrial transformation of the 1990s