Five imperatives of organisational change

Organizational expert Jim Hemmerling has created a model for organizational change which brilliantly summarizes brick-stone books about management into five simple points which are easy to understand and implement. This article discusses his five imperatives of organisational change in light of Zurich UK Life; one of the world’s largest insurance companies who has gone through significant changes in operational strategies.

Since Geoffrey Moore best-seller “Crossing the chasm” was published in 1991, the book has become something of a blueprint of survival for marketers and entrepreneurs. Now in its third edition, and close to a million sold copies, the book is referenced by some of our times most prominent management literature including Merson (2011); Godin (2001); Downes and Nunes, (2014) and Ramadan et al. (2016).

Crossing the Chasm is about the disruptive change in product life-cycles and how each disruptive phase will attract sometimes completely new audiences; each with different needs and wants. This, according to Moore’s ‘Adoption Life Cycle’ (Fig 1, below), need to be reflected in marketing, distribution and sales and consequently for some organizations, especially those built around a single product; each chasm will demand significant organizational change.

Fig 1:Geoffrey Moore’s Technology Adoption Lifecycle

While an organization might acknowledge the need for change which very often is triggered by a period of declining sales, decreasing customer- and employee satisfaction (Kim and Mauborgne, 2015); all too often processes of organizational transformation is not grounded in the organization but instead ‘forced’ on employees by a distant leadership leading to resistance by the actual people which a successful transformation process depends on.

In this article, organizational expert Jim Hemerling’s approach of managing organizational change is discussed (TED, 2018) which is built around the following five strategic imperatives:

#Inspire through purpose

Connecting the transformation with a deeper sense of purpose.

#Go all in

Organizations need to go all in to succeed with a transformational process and, for example, rather than just cutting costs also need to think about initiatives that fundamentally change the way the organization operates which demands investments in leadership, talent and hard structures such as new office architecture reflecting and promoting the new strategy

#Enabling people with the capabilities that they need to succeed during the transformation and beyond.

For a transformational process to succeed, people need to be given the skills and tools to succeed.

#Instill a culture of continuous learning

To stay competitive and organization needs to evolve and constantly adapt to the market which demands a living, learning the culture.

#Clear leadership and accountability

In a transformation, leaders need to have a vision, a clear roadmap with milestones and people need to be held accountable for their actions
Jim Hemmerling’s five imperatives of transformational change (TED, 2018)

#The validity of Hemmerling five imperatives

Before concluding whether Hemmerling’s model can be used as a blueprint for efficiently managing organizational change, it should be noted that this model currently lacks objective and validated data confirming its validity and considering the numerous business books published each year promoting strategies of business often based on nothing but the authors personal experience in a few personal business cases; leaders should be careful of not just jumping on a new business tactics launched by a New York Times best-seller. In my view; the best way to test the practical validity of any theoretical business model always is to map a new model against one or more real-world business cases.

While Hemmerling’s model do make sense, to test its validity, in the next section, I have analyzed each five of his strategic imperatives in light of Zurich UK Life, one of the world’s largest insurance companies which has gone through a major transformational process described in an excellent whitepaper about transformational change by CIPD in conjunction with the University of Bath, School of management (2015).

Zurich UK life case study

Context

Zurich UK life is one of the world’s largest insurance groups with more than 60.000 employees worldwide. Operating on a market which the last few years have experienced a significant change in public policy, regulation and competition; not only have Zurich UK Life had difficulties to compete with new entrants to the market offering cheaper and more market adapted products, but employees also did not feel valued. The leadership team, consequently, recognized that not only did the company need to cut cost, but a sustainable change in corporate culture also had to be achieved for the transformation to succeed.

How Zurich UK Life’s transformational process adhere to the Hemmerling five imperatives

In this section, Zurich UK Life’s transformational process is examined in light of Hemmerling five imperatives.

Inspire through purpose

The first step taken by Gary Shaughnessy when arriving as the new CEO recruited to lead the transformation was to get executives to focus, not primarily on financial figures, but on the mission to become a great company fulfilling its obligations with satisfied customers and happy co-workers. The New CEO also emphasized “a notion of clarity of purpose” and that each decision of change should have a communicated rationale understood and “agreed” upon by all members of the organization.

Clear leadership with vision, milestones and accountability.

In the new strategy of Zurich UK Life managers roles are to lead not to get involved in the detail of work unless necessary. To make decision processes shorter, product managers have been given more trust and are empowered to make decisions which previously would have demanded multiple signatures by people higher up in the hierarchy. The biggest change of leadership structure, though, is that in the new structure all work now is guided by a mission which defines what the organization is and stand for, contrary to the old strategy grounded in financial KPIs.

Enable people with the capabilities they need to succeed during the transformation and beyond

In the new organization, “red tape” has been reduced and teams now for themselves can decide how the workload should be structured and individuals also have been given tools supporting their work which include laptops to enable more efficient work performance.

Instill a culture of continuous learning

In the new organization, the management has rolled out a number of initiatives to help people advance their careers, to become more skilled and which also encourage people to take responsibility for their own learning and careers including training sessions, inspirational events and organizational awards recognizing its employees.

Go all in

Maybe the strongest evidence of a genuine will and determination by the exec team of Zurich UK Life to break with old structures is not the move to a new office building supporting their new delayered operating strategy with an open space architecture boosting operational efficiency and promoting collaboration. Neither is the many new initiatives to empower, educate and motivate all members of the organization. The most significant proof that the exec team of Zurich UK Life is genuine in their determination to change is instead to be found in their new and revolutionary recruitment strategy which explicitly states that HR should “move away from recruiting people ‘like us’, to recruiting people who challenge the current way Zurich UK life is operating.” This new policy in my view is one of the most interesting, powerful, groundbreaking and brave initiatives taken by an exec team in modern business history as it is guaranteed to challenge, not only present organizational processes, but also current power structures and leadership. In essence; implementing this policy, the exec team has planted a seed for a perennial change and as such also have put their personal career at stake.

Result

While the report discussed in this article note that the transformational process of Zurich UK Life has generated significant positive economic outcomes and a gold accreditation from ‘Investors In People (p.59), partly attributed to a more Agile market approach enabling Zurich UK Life to get new products more quickly on to the market; the real winning is much less bureaucracy and red tape (p. 60). Overly restrictive regulation and bureaucracy also have been cleared and the staff now is empowered to plan their own work (p.60). This change has not only made Zurich UK Life a more profitable organization, but also a healthier one with satisfied customers and happier co-workers (p. 59).

CONCLUSSION

While the validity of Hemmerling’s model not yet has been established in independent studies; its five imperatives, as presented in this article, can be observed in successful transformational processes; and most importantly it also makes sense!
What Hemmerling has done is to create a model for organizational change which brilliantly summarizes brick-stone books about management into five simple points which are easy to understand and implement.
While no model can account for all types of organizational reforms; Hemmerling’s model is a great starting point for leaders and organizations undergoing a transformative change.

 

References

CIPD and University of Bath (2015). Landing transformational change. [online] cipd.co.uk, pp.53-60. Available at: https://www.cipd.co.uk/Images/landing-transformation-change_2015-gap-theory-practice_tcm18-9050.pdf [Accessed 10 Feb. 2018].

Downes, L. and Nunes, P. (2014). Big bang disruption. New York: Portfolio / Penguin.

Godin, S. (2001). Unleashing the ideavirus. New York: Hyperion, p.152.

Kim, W. and Mauborgne, R. (2015). Blue ocean strategy. Massachusetts: Havard Business School Publishing Corporation.

Merson, R. (2011). Guide to managing growth. Hoboken (NJ): Wiley.

Moore, G. (1991). Crossing the chasm. 1st ed. Chichester: Capstone.

Ramadan, A., Peterson, D., Lochhead, D. and Maney, K. (2016). Play bigger.

TED (2018). 5 ways to lead in an era of constant change. Available at: https://www.ted.com/talks/jim_hemerling_5_ways_to_lead_in_an_era_of_constant_change [Accessed 10 Feb. 2018].