chemco - change management
TRANSCRIPT
Thursday, November 03, 2016
ChemCoChange Management
THE TEAM
AGENDA ChemCo: Company Breakdown
Problems
ChemCo’s Vision
Kotter’s Model
Business Outcomes
Conclusion
Appendix
Agenda
ChemCo: Company Breakdown
Project ALIGN
CHALLENGESLack of Engagement & MotivationLack of Standardization & EfficiencyLack of Communication & Buy-In3
CASE STUDY OF SUCCESS
CHEMCO’S VISION
EMPOWERINNOVATEALIGNSUCCEED
KOTTER’S MODEL The Big
Opportunity
1
CREATESense of Urgency 2
BUILDGuiding Coalition
7
SUSTAINAcceleration
6
GENERATEShort Term Wins 5
ENABLEAction by Removing
Barriers
4
ENLISTVolunteer Army
3
FORMStrategic Vision &
Initiatives
8
INSTITUTEChange
CREATE A SENSE OFURGENCY
Less absenteeism and turnover
Fewer safety incidents
Fewer product defects
Higher productivity
Higher profitability
37%
48%
41%21%
22%
Gallup Q12 SurveyCompanies on the top quartile on engagement
UIDING COALITION
Psychological Safety
Dependability
Structure & Clarity
Meaning
Impact
Empower champions of change within:Steering CommitteeColor Leadership TeamCentral TeamLocal Project Teams
CREATE VISION
“Where there is no vision,
the people perish…”
-Proverbs 29:18
“Vision and direction are 3-4x more important than other leading factors in change management.”
Accenture, Debunking the Myths of Organizational Change Management
Critical Buy-In:
Executive Leadership
Partner Committees
Employees across all levels
1
3
4
2
STEERING COMMITTEE
COLOR LEADERSHIP
CENTRAL TEAM
LOCAL PROJECT
TEAM
● Funds development initiatives
● Organizes ChemCo conference
● Regional conferences● Local Realignment
Sessions
● Regional cost-saving Goals ($5.75 million ea.)
● Celebrate short term wins & reestablish goals
Brand as employee support:● Manage accountability
among employees● IT systems● Standardize innovations
COMMUNICATE VISION
Project ALIGN
Empower. Innovate. Align. Succeed.
EXPERIENCE VISION
...it’s another thing to experience a sunrise.
Corporate BannersNewslettersEmail Tags
CatchphraseCompany “Chatter”
REMOVE BARRIERS
Clear the runway and tune the engine so that employees can literally take off and soar,
elevating Chemco to greater levels of success and efficiency.
HIERARCHICAL WALLSCONTRIVED ACCOUNTABILITYGLOBAL DISPARITYIT SYSTEMS
REMOVE BARRIERSHIERARCHICAL WALLS
Steering Committee
Central Team Local Project Team
Local Innovation
REMOVE BARRIERSIT SYSTEMS
“Granular data analysis is critical for seeding out and identifying operational shortcomings.”
USC Consulting Group
What? I So what? I Now what?
REMOVE BARRIERSCONTRIVED ACCOUNTABILITY
“It’s been a tremendous success, because it turns out that they care one to another more
than they care for the people above them.”- Clayton Christensen, Harvard Business School & Innovator’s Dilemma
REMOVE BARRIERSGLOBAL DISPARITY
Go GlocalCollaborate with Unions
SHORT-TERM WINS1. Celebrate all innovations2. Create STRETCH goals 3. Utilize accountability
“Cost-management and effectiveness continuously rise from a change initiative.”- Accenture
SUSTAIN ACCELERATION Leverage motivation from further short-term wins
Position individuals according to strengths and disposition
Eliminate individual inhibitors to growth and transformation
Continued attention from leaders and change champions will override holdouts and drive permanency.
INSTITUTE CHANGE
“Engaging employees can be a long and tedious process, but do we understand the
difference that it can make to have employees that are a part of the 25% of HIGHLY ENGAGED employees and 40% moderately engaged employees in the workforce?” - Aon Hewitt, Outsourcing Consulting Services
You have your vision, your goals, and steps to action. What’s next?
Making this change concrete. Don’t let this be a once in a lifetime gadget
or foreign idea you put up with. Institutionalize this change as a part
of who ChemCo is.
BUSINESS OUTCOMES
Rises in employee engagement lead to
147% higher earnings per share than your
competition
$30 million of early cost-savings leading to a total savings of over $120 million by October 2017
Successful onboarding for newly acquired sites
Standardized, long-term, global procedures and values
Safety, job security, and personal development leading to lifestyle benefits
CONCLUSIONCost Savings of 1.15% at each worksite can save $120 million in a year.
Enabling employees with data and autonomy to innovate will save hundreds of millions to come.
REMEMBER And HIRE
Context:Over 25+ manufacturing sites globally$13 billion annual revenuePhase I: 9 sites, Phase II: 5 sites will close$120 million goal of cost savings
Calculations:Revenue per Worksite
● $13 billion / 26 worksites● = $500 million per worksite
Required Savings per Worksite● $120 million / 26 worksites● = $4.61 million per worksite
Savings as a Percentage of Worksite Revenue● $4.615 million / $500 million● = .00923● = 0.92% Savings per Worksite
Savings as a Percentage of Total Annual Revenue● $120 million / $13 billion● = .0923 = 0.92% needed cost savings
Higher Savings Percentage per Worksite Needed● 21 x $500 million x 0.92%● = $96,915,000
Required Savings per 21 Worksites● $120 million / (21 x $500 million)● = .0114 ● = 1.14% Required Savings per Worksite● 1.14% x $500 million● = $5,714,285.71
Thus, $5.75 million needed in Annual Savings per Worksite by October 2017 (also $480,000 per month on a 12-month schedule).
Appendix I
Appendix IIData Sources on Manufacturing:
http://www.mckinsey.com/business-functions/operations/our-insights/how-big-data-can-improve-manufacturing
http://www.ingrammicroadvisor.com/data-center/4-big-data-use-cases-in-the-manufacturing-industry
Unionshttp://www.reuters.com/article/germany-wages-idUSL8N15H22R
Under Communicating Vision by Kotterhttp://www.forbes.com/sites/johnkotter/2011/06/14/think-youre-communicating-enough-think-again/#4c5aa3aa2855
Kotter’s Modelhttp://www.kotterinternational.com/the-8-step-process-for-leading-change/
Guiding Coalitionhttps://rework.withgoogle.com/blog/five-keys-to-a-successful-google-team/
Urgencyhttps://www.linkedin.com/pulse/gallup-q12-employee-engagement-elements-richard-riche
USC Consulting Group - Data Management in Chemical Manufacturinghttp://www.usccg.com/operational-efficiency-chemical-manufacturing-supply-chain/