Acuity Global Development - Organizational Change

Organizational Change

The rationale for a new organization design

Client: Media and Print, Finance Planning & Strategy Division

Background:

In existence for 100 years, headquartered in London and New York and employing 78000 staff worldwide, the organization’s role is to deliver a range of internationally renowned publications to specialist audiences and customers across 48 countries. The organization had a turnover in 2011 of $12bn. The Ex Co of the business identified the pressing need to look at moving the way the organization produces and delivers its products to market in order to support their growth targets of 3% year-on-year for the five years to 2016. The organization for many years had very low turnover and attrition rates and was typically not high on risk taking and therefore predictably was for the most part, change averse. This extensive process of change required significant buy-in and education at the top of the organization and the need to encourage a greater degree of flexibility in approach and with it, from a behavioral standpoint, the promotion of a more inclusive and yet decisive leadership style. 

Central to this, there has been since 2011, a fundamental shift in the way the business has viewed its Financial Planning and Strategy Division. Part of the 2011 early discussions focussed on the need to ensure that the Central Finance and Planning area, (consisting of, in total, 20 roles) needed to adopt a much stronger link with the Strategic Planning area both in approach and methodology and in doing so create a more purposeful and longer term strategy to manage all the mission critical elements of the financial planning agenda.  

The Requirement:

The Company aimed to deliver this change in direction strategy and to follow with an implementation phase over a three year period. This began with a pilot programme in 2011 in both the Finance and Strategy functions. In essence the business wanted both these areas to be able to be more responsive to in country, demands across the globe and at the same time manage the strategic side of effective financial management, analysis and compliance from the centre. Additionally, leveraging all in country financial resource to ensure much tighter financial controls of capex costs, running costs and revenue. 

Inputs and Outcomes:

  • We entered into a diagnostic phase engaging with key internal customers and external stakeholders to ascertain from each group their key requirements of both functions. 
  • We designed a number of options in terms of the ‘new’ structure of both functions, to give the business the best prospect for success. 
  • Although direct comparative data is never an exact fit, our experience told us that there needed to be an overall increase in the headcount resource of the Finance Planning and Strategy areas if this project was going to be a success. In this case the numbers were increased from 19 to 28 roles in the Strategy function and an increase from 20 to 32 FTEs in Financial Planning. 
  • NB: - It should be noted that most of these roles were re-allocated from other parts of the organization, as additional re-structuring and organization design work rolled out across the organization throughout 2012 and 2013.
  • Some initial recruitment and staffing salary costs were incurred. Circa, $500K.
  • Organizational Health assessments at three and six month checkpoints determined if adjustments were needed to the function’s structure and approach needed to deliver this change. These adjustments were made and further support was given to ensure a high probability of successful implementation of the strategic change both at the corporate centre and in country, additionally, across the business at individual, team and organizational levels.
  • We developed a tailored program to support the communication and implementation of the ‘new’ OD design and strategy. For the senior executives in both functions we made available a coaching based solution to support them with this communication, the negotiation in the early part of the implementation phase between functions in terms of handover of key tasks and activities and then support all executives with the required cultural shift.

Benefits achieved:

  • The Client’s strategic change program titled ‘P to E’ (Print to E-Solutions) continues to successfully evolve. 
  • Uplift in profitability from $800m to $860m and trajectory still upward after year 3 of the project.
  • Appointments and internal transfers for both the financial and strategy functions, proved to be cost neutral by year 2 end of 2013.
  • Studies from HR showed KPI improved performance across all business units.
  • Significant savings of $30m made in process improvements and reduction in duplicated effort.
  • New structure drove out clear evidence of roles that needed to be redefined. Actions taken accordingly improved the richness of roles for individuals in addition to producing cost savings across the organization. 
  • A number of these roles were transitioned to the Finance and Planning area and resulted in an increase in senior level headcount in that area from 20 to 32 FTEs.
  • The Strategy function also needed an injection of ‘strategic horsepower’ resulting in an uplift from 19 to 28 FTEs.
  • As the process moves through the organization it is clear that there is evidence of a cultural shift in the way that the organization seeks to welcome change in a positive and meaningful way.  There are of course, ‘pockets of resistance’ and there have been those who have left the organization when realization dawned that the change was, for them, too significant.
  • 360 feedback reports on a range of senior leaders across a number of key disciplines and geographies indicate that one year on, at the end of 2012, comparative data shows clearly that there has been a clear shift in the organization’s willingness in embracing behavioral change. There is clear evidence at all levels that leaders have begun to explore what motivates their behavior.
  • Additionally early indications from a repeat 360 process in early 2014 suggest that there is greater opportunity for the Senior Executive population to focus more strategically and as one set of comments states: ‘…is now able to work much more on the business and its growth agenda than working in the business fixing and fighting fires.’
  • The critical outcomes are those business related objectives to see a willingness and a capability to be able to deliver the shift in approach and embrace the E-based delivery channels crucial to the sustained progression of the organization.  
  • An understanding that ‘churn’ of people is usual in these strategic OD programs and should be accepted as part of the evolution in an organization's life-cycle.