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CELERANT CONSULTING
EDITION TWO ®
CLOSEWORK CELERANT CONSULTING Down on the ground helping to drive results up. Global Review 2011
CLOSEWORK® Down on the ground helping to drive results up. Global Review 2011
Sustainability: Are companies doing enough at the sharp end of a Mega-trend?
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celerantconsulting.com Celerant Consulting Holdings Limited. Registered Office: Avalon House, 72 Lower Mortlake Road, Richmond, Surrey TW9 2JY, United Kingdom.
EDITION TWO
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Revitalising a relationship requires the human touch Utilities: The game’s changed and there’s no extra time
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Driving Change Change is the constant, the signal for rebirth, the egg of the phoenix.
Celerant Consulting is one of the World’s Top 5 Best Positioned OM Consultancies *
in Change Management
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*Kennedy Information Global Survey 2009-2012.
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DNA
For over 20 years, Celerant Consulting has delivered successful, sustainable change for the world’s leading companies in the Energy, Chemicals, Manufacturing, Consumer Goods, Life Sciences and Aerospace & Defence industries. For
over 10 years, we have successfully helped
Utilities, Telecoms, Healthcare, Consumer Services, Financial Services, Private Equity and Public organisations. Our expertise covers the entire spectrum of the Operations
Management ecosystem, with a core focus on Performance Improvement & Behavioural Change Management. Every project is a strategic partnership where we get down on the ground to identify and analyse a Client’s most significant business challenges, then work with them to drive up results. With over 550 team members and offices in 11 countries, we help implement customised solutions that capitalise on existing systems, processes and people and
substantial benefits for Clients. We change business for good and over 90% of our Clients say they would work with us again. deliver
CELERANTCONSULTING.COM
Closework® Global Review 2011 is a magazine published by Celerant Publishing on behalf of Celerant Consulting Ltd. Edition Two - April 2011. Publication Director: Thibaut Bataille. Editors: US & EMEA Marketing Teams. Contributors:Celerant Consulting thanks all its Clients, Friends of the business and Celerant teams for sharing their exceptional experiences and knowledge with us. Editorial conception and realisation: Patrick Keating. Design conception and realisation: Andrew Barnes Jones. The words, photos and images in this publication cannot be used without the express consent of Celerant Consulting Ltd.
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Agenda
Down on the ground helping to drive results up Driving Results 8
When You’re Russia’s Third Largest Oil Company, Energy Is Your No.1 Concern
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It’s All Down To Chemistry
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Helping Janssen Pharmaceutica find the perfect global partners.
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Revitalising A Relationship Requires The Human Touch
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Everything is On The Table
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TCO: The Hottest Challenge For A Cold Rolled Steelmaker
Wall To Wall Improvements At The UK’s Largest Homebuilder Implementing a ‘Quality & Cost’ Improvement Programme at Barratt Homes.
Driving Performance 18
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Will LEAN Help Or Hinder The Oil & Gas Industries? Ambitious Times
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Global Management
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The Top 3 CEO Challenges Celerant Consulting Americas ask Top Executives to share their insights.
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Right Pieces, Wrong Glue? Cathy Johnson says it's not how many Performance Management tools you have, it's how you fit them together.
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What’s The Best Medicine For Your Hospital’s Financial Wellbeing? Sebastian Planche believes the answer is committed Healthcare Professionals.
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How To Ensure Your Industrial Footprint Gets Off On The Right Foot Fernando Cruzado highlights 4 Phases for success.
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Managing Complexity Doug Newman explains that some complexity is unavoidable - and some is even desirable.
Sustainability Bert Witkamp on how to get the most from this new Mega-trend.
Please Recycle After Reading Bart Le Clef explains why Celerant Consulting is launching a new Sustainability Consulting Service.
The Buck Starts Here
Russell King on how best to build a global team.
Global Project Snapshots FMCG, Energy, Chemicals, Manufacturing.
Managing Complexity
Driving Relationships
Global Project Snapshots Manufacturing, Telecoms, Life Sciences, Metals & Mining.
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Driving Talent
Celerant Consulting’s latest report in partnership with The Economist Intelligence Unit.
Forging a new TCO model and a can do attitude at Kandil Steel.
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Driving News
Barry Samria talks to Gulf Times about Celerant Consulting’s plans for Qatar and the wider region.
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Deregulation Jacques Gounon on the impact of French rail deregulation on Eurotunnel.
Gary Traylor has no doubts in E&P Magazine.
Helping transform Rieber & Søn from a business conglomerate into an integrated food company.
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Manufacturing, FMCG, Metals & Mining, Energy.
Tim Durston summarises Celerant Consulting’s approach in European CEO Magazine.
Changing membership dynamics at the Society For Human Resource Management.
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Global Project Snapshots
Global Competition Mogens Granborg on Denmark’s drive for competitiveness.
The Spark That Lit The Flame Transforming GRTgaz.
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Construction, FMCG, Manufacturing, Financial Services.
Slashing TNK-BP’s $130m energy bill.
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Global Project Snapshots
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The Game Changer Henri-Paul Missioux argues that only Gas & Electric Utilities that raise their game will succeed in the new Europe.
Business Transformation Albert Vasseur on creating one company from three businesses.
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Driving Talent Success always demands a greater effort.
Sustainability is a virtuous circle. So please recycle after reading. Sustainability is not only about profit making, green growth and new technologies, says Bart Le Clef, Head of European Operations, it’s about new behaviours for the future. That’s why Celerant is launching a new Sustainability Consulting service to help companies move from knowledge to effective action.
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he World is Watching’ is the new business reality and any organisation that wants to remain both highly competitive and publically applauded must look at every aspect of how it implements Sustainability.
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The business case has already been comprehensively laid out. Raw material pressure, regulatory pressure, public pressure, profit pressure. If one doesn’t get to you, another one will. The current financial downturn has undoubtedly brought the subject into sharper focus, but it's simply an additional weight on the scales. The question is: What is the most efficient way to make it happen? Make the shift. Reap the rewards. Creating responsible, sustainable solutions to everyday business needs is a big challenge, so many companies are struggling to get from ‘Yes, we’re working on sustainability’ to ‘down on the ground implementation.’ It’s a fact that if you talk to many CEOs today about Sustainability, there’s a good chance that you could talk for an hour without really understanding what it is they want to achieve. Then if you talk to their Manufacturing or Procurement Directors, a whole different definition might come up. That’s why Celerant is launching its new Sustainability consulting service. We can help organisations make the shift from ‘We want to do something’ to ‘Look at our results, we’ve done it.’ We can help them identify every area in their value chain that needs to be improved, so they can create a closed loop system where the benefits of one Sustainability measure trip over to the next. No separation. Total Integration. Sustainability is not something that can be done next to your current running business. It must be integrated across your whole value chain, from purchasing to the end products or services you sell - and it must be linked to the kind of targeting you would expect under initiatives like Operational Excellence. Last year for example, Celerant did a lot of energy scans within companies, typically as part of an analysis looking for opportunities to improve energy efficiency and effectiveness. Add to the scan the relevant sustainability areas and you’ll find a totally different dimension for
People. Profit. Planet. companies on the question ‘How efficient are we?’ Carbon footprint, cradle to cradle, product design, sustainable logistics… it puts greater emphasis on a lot more than just optimising the KW’s of a manufacturing asset.
If on top of that they can see that by going for a sustainability approach, they can also tackle some of the critical performance issues they’ve had in the last 5 years, that adds even more value to the proposition.
So every area of a business must go under the Sustainability scanner and be thoroughly examined. How do we redesign and re-innovate our products to be able to claim that they are sustainable? How are we going to minimise the percentage of our product that uses scarce resources? How can we change our procurement rules so that whatever we purchase or whatever we put in our products is carbon neutral, or at least can be re-used? What about the way we package our products and ship them? How can we improve there?
The big picture is that organisations are implementing Sustainability because it makes sense, to shareholders, stakeholders, suppliers, regulators, the people who work for them and the people who buy from them - and in the end because it is a value driver that makes them money.
Celerant can help an organisation close the gap between knowing and doing. It's not enough to claim Sustainability as a marketing tool, it has to be measurable so that people can actually see it. They can see it in the business performance, they can see it in the products and services that customers buy, they can see it in their own work environment. That’s when you get a critical mass, mobilisation starts and Sustainability moves from being a CEO initiative to employees proudly telling their friends about the changes that are happening. What are the cost implications? No matter whether you want to turn it left or right, Sustainability will have a bottom line impact. But our experience has shown that if, as part of an analysis on the Sustainability scanner, a client can see that there are real benefits, they aren’t too worried about the impact of investment. In fact, something like 80% of the concern is gone.
‘Consumers are asking who is behind the brand, so we have to make it visible.’ Paul Bulcke, Nestlé S.A. The way business operates is changing fast. Shipping companies are sailing their vessels slower because it cuts emissions and that in turn cuts fuel costs. China is now the world’s biggest producer of wind turbines and solar panels and will soon be top in electric cars. And surprise, surprise, the world’s biggest wind farm is in the ‘Big Oil’ state of Texas. For many organisations though, the biggest challenge remains: What happens when the CEO comes out of a sustainability presentation or workshop totally energised on the subject? How are they going to paint their people a picture of what they are going to do differently as of tomorrow? And once they’ve got the picture, how they’re going to action it. Celerant’s new Sustainability Consulting service is designed to help answer that.
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Driving Results All thoughts must be distilled into action and action that brings results.
When you’re Russia’s third largest oil company, energy is your No.1 concern. TNK-BP wanted to slash the $130m energy bill at its Linik Oil Refinery, so Celerant Consulting was brought in to deliver a sustainable greenprint for the future. ith a portfolio of series production, refining and marketing enterprises in Russia and Ukraine, TNK-BP is the 3rd largest oil company in Russia and one of the world’s Top 10 private oil companies in terms of crude production.
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Its Linik Oil Refinery, one of the biggest in Ukraine, was designed to handle up to 22m tons of oil per year, but was operating at just 4-5m tons because structural and technological inefficiencies were causing significant energetic and qualitative losses. The company knew that it had to slash
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‘ This project was a great opportunity for us to learn from Celerant so that we can do a much better job and get the results we want.’ Maxim Grekov, Chief of Utilities, Linik Refinery.
Linik’s energy costs to increase its competitiveness and financial performance, so Celerant Consulting was brought in to help drive a comprehensive Change Programme that would make Linik’s $130m energy bill, a significant percentage of operational costs, its key focus. A new system. A new outlook. To achieve maximum impact in the programme’s compressed timeframe, Celerant’s experts worked closely with a Linik Taskforce to rapidly set up an Energy Efficiency Group. They then introduced a sophisticated Energy Performance Measurement System that included process maps, roles & responsibility matrixes and short interval controls to all the major consumption areas on the site. The Crude Distillation Unit, the refinery’s second biggest energy consumer, was also given its own rough-cut capacity plan. With this system in place, production and utilities personnel could now identify process irregularities, determine root causes and take rapid action. They could also capture and standardise energy consumption best practice and facilitate better cooperation and decision making at all levels. All savings had to be sustainable, so Celerant also developed an internal energy audit and implemented new maintenance routines that placed a particular focus on actions that required no capital investment.
SUSTAINABLE RESULTS • A 7.4% reduction in fuel consumption, with over $2.4m benefits. • An Energy Efficiency Group has been established and an energy audit system, involving key personnel in every production and maintenance shop, now systematically drives energy saving actions and initiatives. • An action plan, with more than 90 actions for technical and organisational change, has been deployed to improve performance. • A culture of Continuous Improvement has been created, moving the organisation from passive reaction and fire-fighting to performance management that actively seeks cost-reduction opportunities.
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Driving News Examining global issues in global publications.
CEOs say that Managing Complexity is the toughest challenge of running a global business. That’s why the issue was at the centre of discussions at the World Economic Forum 2011.
complexity, you will win. If you also have a genuine ability to adapt, an unwavering implementation of your principles and a real belief in the players around you, you will win big.
Celerant Consulting has developed a pragmatic and highly successful approach to addressing complexity in global organisations.
Tim Durston, Client Partner at Celerant Consulting UK, summarised this approach in an article for the Davos edition of European CEO Magazine. It explains how to position all your pieces to avoid obstacles and seize opportunities. And shows how Celerant helped Sidel Group do exactly that in 6 commercial zones across the globe.
Managing Complexity is like playing 3-Dimensional chess. If you understand customer standards, eliminate structural divergence and minimise process
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WORLD ECONOMIC FORUM 2011
Are you good at playing 3-Dimensional chess?
s a world leader in liquid foods packaging solutions, Sidel has installed 20,000 machines in over 150 countries, but recent installation cost and lead time overruns meant it wasn’t meeting client expectations. The customer is king, so Celerant Consulting was appointed to drive a global Change Programme to enhance customer satisfaction and reduce installation costs. The project was deployed over 15 months in Europe, Africa, Latin America, North America, Greater China and South East Asia Pacific and jointly managed by an international Celerant Sidel team.
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Celerant’s experts developed and implemented common working practices that would avoid any extra costs linked to quality issues and provide
more reliable solutions for Sidel’s clients. In the space of just a couple of months, shared reporting tools, effective process measurements and efficient decision making that linked every level from field technicians to vice presidents were designed and installed across the globe. Today, all the engineering processes are more efficient, shared and understood within Sidel’s 6 commercial zones. (Extract from article.)
‘ To manage complexity you need to think ahead of thinking ahead.’
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Driving Results All thoughts must be distilled into action and action that brings results.
RTgaz is organised into multiple zones and agencies across France, each working independently and with diverging standards. If the company was to successfully transform itself into a leading European gas network, it would have to improve its operational management competencies, reinforce the network and workers safety and achieve significant savings - all in a specific social context. Celerant Consulting is highly experienced in both the Utilities sector and Change Management programmes, so it was appointed to help launch a major LEAN programme focused on asset management, an integrated supply chain, process excellence and real behavioural change.
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‘It gives me a lot of energy! We feel the whole organisation is moving forward.’ Philippe Boucly, CEO, GRTgaz.
Pressing all the right buttons Working closely with the client team, Celerant Consulting quickly developed and deployed a robust improvement programme: Button 1: Celerant’s experts undertook a comprehensive analysis of the main workstreams across the organisation such as Purchasing, and Energy Management and put a particular focus on Maintenance - which represents 50% of the business case and thousands of employees across France. This led to a validation of the business case for significant change and the enthusiastic on-boarding of top management.
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Button 2: Each region was put in charge of a specific workstream so that it could develop and test the proposed improvements. Regular benchmark sessions were also organised with all regions to identify gaps and create a culture of Continuous Improvement. Button 3: Solutions should not be imposed, so auto-diagnosis was completed for each workstream in each region, allowing GRTgaz to capture best practice, focus on weak points and on-board all the key players in the organisation.
COMPREHENSIVE RESULTS • Improved Operational performance has increased productivity through an injection of new added value activities for maintenance teams, improved Purchase performance through a re-negotiation of the contracts framework and better ‘Quality of Service.’ • Improved maintenance organisation has boosted load-capacity. • Significant qualitative gains have also been achieved by installing a culture of measurement and performance, enhancing cooperation between business units and professionalising the managerial line.
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THE SPARK THAT LIT THE FLAME When GRTgaz wanted to transform itself into a leading European gas network, it knew there would have to be changes to its ways of working. Celerant Consulting was appointed to help spark those changes.
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Driving Relationships Celerant clients, former clients & friends of the business share their expertise and experience.
‘If you want a successful global team, you’ve got to embrace global diversity.’ R
ussell King spent nearly 10 years at Anglo American, creating a
global HR organisation with a world class approach to talent management. He is currently a director of Aggreko plc, Spectris plc, a senior advisor with Royal Bank of Canada Capital Markets and Chairman of Sorrett Advisors. Until the end of 2009 he was Chief Strategy Officer and Executive Committee member of a FTSE 20 Company.
What in your experience are the keys to managing a global team? I would say 5 things - and rather conveniently for me, they all begin with C. The first is Clarity. Making sure that the team is absolutely clear what it is they’re trying to do. What’s the purpose of the organisation? Where is it trying to go? You have to work that through as a team so that there’s a common understanding of what is meant by being, for example, ‘A World Leading Chemical Company.’ Unless you actively work your way through that, you’ll ask 6 different people and get 6 different ideas. It’s imperative that you get this whole notion of Clarity really well established. The second point is related to the first. I call it Commitment. It means not just getting the leadership team knowing where they’re going, but actually making sure that it makes sense to all the people down the line. What one often finds in global teams is that they have some great mottos, they make great DVDs and all that sort of stuff - and it doesn’t mean a jot to the person on the shop floor, or the middle manager, or the junior graduate recruit. So you really need to put in a lot of work for it to make sense for them. For it to get them out of bed in the morning, as it were.
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Global Management
‘ Even with a common language, Americans, British, Australians and South Africans are very different in the way they approach problems.’
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Driving Relationships Celerant clients, former clients & friends of the business share their expertise and experience.
The third element is Consistency. By this I mean that if you’re going to build a team and you’ve got a sense of direction, you’ve got make sure that all the bits of the jigsaw fit together. It’s no good saying, to use a very trite example: ‘Act as a team’ if everyone’s objectives are about acting as individuals. If their bonuses, their incentive schemes and so on, are about them being individuals. The good news about Performance Management is that it works. And the bad news is that it works. So if you set something up wrongly, you’re likely to get the wrong outcomes. I call the fourth element Constancy. It amazes me how often people on any sort of Change Programme get bored with it half way through. These things can often take a long time and I’m afraid that senior managers are prone to getting distracted and coming up with a new idea or a new initiative - which then means that everyone starts to think ‘Oh well, maybe that other thing we were doing isn’t quite so important.’ The whole notion of constancy, of keeping on keeping on, is one that senior managers often seem to forget. Fifthly, is the whole notion of Capability. It sounds obvious, but you’ve got to have a team that is capable and your job is to make sure that it is capable. You’ve got to ensure that it has the right skills, the right attitude, the right organisation and the right financial wherewithal to do whatever it’s tasked to do. A particularly important element with Capability is Cultural Awareness. Making sure that you’ve got the cultural sensitivity that you need. That you train people in how to do that and they really understand how important it is. To my mind these 5 things cover most bases for building a global team and deploying a global strategy. I would also add that in Capability, having adequate diversity is very important. A global team full of people from the UK or Russia for example is not a Global Team. You might start out that way, but you’ve really got to rapidly move to a diverse team. So that’s my Starter for 10, or indeed my Starter for 5.
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Are business people becoming more homogenised as they become more global? I think people are very different - within cultures, between cultures, within businesses and between businesses. It’s not just that they speak different languages or behave differently, it’s also the way they treat each other. Even with a common language like english, the Americans, British, Australians and South Africans are very different in the way they approach problems and their preparedness to take things head on. Take an American for example, okay it’s a bit of a caricature now, but a few years ago if they wanted to do a deal in say China, they would often want to do that deal in the first meeting. Now obviously, the Chinese don’t operate like that, they want to build relationships - but both groups have changed. The Americans have got more patient and the Chinese have got pacier. You also see it in Europe. There are big differences in the way the Italians would do something and the French or the Germans. You see these differences all the time. That’s one of the complexities you have to manage. It’s not so much that you have to get everyone to be the same, it’s that you have to understand and respect ‘difference’. The best teams are the ones who really relish global difference, who are sensitive, respectful of, and aware of cultural differences, and who are agile enough to adapt to these issues as they emerge. It’s the same with gender, frankly. A team of only, or very predominantly men is definitely the poorer. You’re missing out on half the talent pool for a start. You obviously have to recognise that in some countries women work well and in some countries they don’t, but then in some countries men work well, and in some countries they don’t. It’s all about being very open minded and engaging with these differences openly and honestly.
Have you found that what you’ve just said about people also applies to doing business in their countries? Very much so. I spend a lot of time in Africa, I spend a lot of time in Asia, I’ve also lived in Australia and Europe for many years and I would say that almost all the issues I have mentioned apply. Now that isn’t to say that some cultures aren’t naturally more adaptive than others. The UK culture for example is actually quite adaptive - partly because as the industrial base and national competitiveness has changed we have had to adapt to survive. I’ve seen similar things in China as it opens up and embraces the West - who would have believed 20 years ago that some major Chinese business schools now teach predominately in English?
What’s the best way to get people to accept the need for change? When I started work 30 years ago we talked about change being essential - and actually it still is. We’re still saying the same thing. The reality is that when people have Clarity, when they know what they’re going to be doing and why they’re going to be doing it, then actually a lot of that stress and pressure is much more bearable than it is where they don’t understand why they’re doing things and they don’t understand the direction in which the organisation is headed. So get Clarity right first and then make sure you don’t forget the other four Cs! The simple difference is leadership. I actually think there is just a gigantic premium on good leadership - there’s absolutely no doubt that a great leadership drives great business performance and vice versa.
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Driving Change Change is the constant, the signal for rebirth, the egg of the phoenix.
Companies run more efficiently because their workers connect as empowered individuals, not components. Layers and departments collaborate rather than compete. They’re given precise ways to measure what they do and can use their initiative to improve. Operational areas perform better because they have a stake in the process of setting goals and can see what is being achieved. Single individuals understand their role and
CLOSEWORK their personal impact on performance, so their work becomes more satisfying. Everyone plays a part in setting the targets, so they become a shared objective and a point of personal pride.Wariness and rivalry give way to real respect and teamwork. Optimum improvements continue to be achieved long term because people feel central to the results they create. Real behavioural and organisational change takes place. Knowledge is power. When people know what is expected of them, companies thrive.
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Driving Performance We must learn to be equally good at what is short and sharp, as what is long and tough.
Hold The Front Page!
Restoring a Reputation
BUSINESS CHALLENGE The client is one of Europe’s leading printing services companies. It has 6 major production sites and a product portfolio that ranges from high quality catalogues to magazines and advertising supplements. The industry was already suffering from overcapacity, decreasing demand and declining prices when the financial crisis struck. To ensure its competitiveness, the company launched a comprehensive Change Programme to rightsize the company by cutting costs and increasing productivity and flexibility through LEAN processes. As experts in Change Management and LEAN implementation, Celerant Consulting was brought in to drive the programme alongside the client.
BUSINESS CHALLENGE The client, a division of a leading global Telecommunications company, provides field services (civil engineering, cabling, polling) to a number of UK Telecoms operators. Its performance for its largest customer had deteriorated significantly over recent months and reductions in volume and revenues were impacting heavily on the bottom line. Faced with these challenges, our client decided to implement a major transformation programme to improve service levels, reduce costs and provide a platform for sustainable growth. Celerant Consulting was chosen to help drive the project because of its successful record of delivering operational and behavioural change and extensive track record in the Telecoms Industry.
CELERANT SOLUTION The project initially involved 2 sites and focussed on reducing machine downtime by optimising production planning, improving changeover times, increasing machine rates and reducing breakdowns and paper scrap. In a change from normal practice, Celerant’s experts began analysis and project implementation simultaneously, which meant that as potential was defined in the analysis stream, first system, cockpit and process improvements were being implemented in the project stream. Celerant Consulting then worked closely with the client team to perform root cause analysis on machine downtime and paper scrap, redesign changeover and maintenance processes and install production SICs. They also installed a production MCRS® Management System and used Closework® approach to transfer tools and methodologies among production staff and establish a culture of Continuous Improvement. Following this success, the programme was rolled out to 2 further sites. RESULTS By the end of rollout, millions of Euros annualised savings had been achieved across all 4 sites. The client now have tailor-made production systems, processes and Continuous Improvement cycles that reduce machine downtime and paper scrap. Overall changeover time has been reduced by 10-15% and preventative maintenance plans and checklists have been implemented, introducing the concept of ‘autonomous’ maintenance, and databases for breakdown analysis and planned maintenance work orders have been designed and deployed. A Knowledge management system has been installed and over 350 employees trained in problem solving tools and other methodologies.
Manufacturing
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CELERANT SOLUTION Celerant’s experts began the programme with a 6 week ‘Rapid Performance Improvement’ phase in the client’s Scottish European region to provide immediate stability to its major customer and continued revenues to the company. Following this success, they then focused on 4 key areas where operational and behavioural changes were urgently required: Customer Operations: A highly efficient, centralised National Customer Operations Centre that included all operational processes was designed and implemented. Field Operations: A ‘Right First Time’ quality management system was implemented at the front end of the business, reducing rework and increasing Fujitsu the client’s ability to deliver ‘On Time. In Full.’ Cost Control: A stringent cost control process, focused primarily on materials and equipment costs, was implemented to reduce inventory and running costs. Business Performance Management: A comprehensive MCRS® Management System was designed and implemented across the organisation to drive the behaviours required for a sustainable business performance. RESULTS Financial benefits of millions of Euros have been achieved by reducing purchasing spend and centralising customer operations in a single location. ‘Right First Time Quality’ of over 95% has been achieved across all areas of field operations and the client now delivers upper quartile customer service performance when benchmarked against its competitors.
Telecoms
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Only The Best For The Best
Leaner. Meaner. Futureproof.
BUSINESS CHALLENGE The client is a world leading, fully integrated manufacturer and provider of dialysis services, with billion dollar annual revenues. Its North American President had set an aggressive 3 year stretch goal for savings, but because the company’s culture begins and ends with quality, this objective was only worth pursuing if quality simultaneously improved. So Celerant Consulting was brought in to help design and implement a LEAN & Six Sigma Programme to create a true results focused, quality driven, process excellence culture.
BUSINESS CHALLENGE The client is a major European producer of industrial minerals. Its organisational structure for overhead functions had been split between 2 sites, causing inconsistencies in responsibilities, processes, overhead costs and several parallel structures which contributed to relatively high SG&A cost vs. sales. To change this, it wanted to increase organisational and process effectiveness and align the organisation for future growth. Celerant Consulting had already produced a successful turnaround at the company’s Eastern European subsidiary, so it was brought in to help drive the project.
CELERANT SOLUTION Celerant Consulting began by giving the client real visibility into where Six Sigma could help, where it was most needed and who was best suited to be involved. It guided this process by working in two crucial dimensions: Project Prioritisation and Human Resource Allocation. The first area identified a series of projects that best fit quantifiable benefits, relevance to strategic goals and financial impact. The second selected and assigned human resources to these projects. It was important to know the client’s people were making real progress toward Six Sigma proficiency, so Celerant Consulting introduced a system which continuously reviewed employee capabilities, allowing the company to track development and tailor the training and coaching of each individual. Celerant Consulting also established a baseline to measure the specific results it had committed to throughout the programme. This ensured that both financial and behavioural results were accurately captured as Hard (P&L Impact) vs Soft (enablers, but not directly tied to P&L).
CELERANT SOLUTION After carrying out an analysis, Celerant Consulting designed and deployed a comprehensive Change Programme across 6 Workstreams: Organisational Effectiveness: The company structure was redesigned to fit the new environment regulations and to give the company a strong base for possible future acquisitions. MCRS®: A new Management System was created to deliver increased transparency in all administrative functions. Investment: The process and toolsets for CAPEX projects were redesigned for better control of time and money. Purchasing: A new organisational and category management concept was implemented to decrease total cost across Europe. Sales and Logistics: The sales organisation was realigned to give ‘One Face to the Customer’ and a new logistics purchasing process implemented. Innovation: A comprehensive R&D department was established to secure future innovation and growth potential. Celerant’s experts facilitated decision making workshops, while the Client team developed processes and strategies that required real in-house knowledge.
RESULTS The savings stretch goal was exceeded by 30% one year earlier than planned. The ROI was greater than 5:1 in less than 1 year and 10:1 after 3 years as a result of the programme’s Black Belts and the ongoing LEAN projects. 9 Six Sigma Black Belts and 20 LEAN practitioners were successfully trained during the 12 month project and a sustainable MCRS® Management System was installed to drive Continuous Improvement by cultivating a renewed workforce of implementers.
RESULTS Significant cost savings have been achieved in Purchasing and through Administrative head count reduction and process optimisation. Additional CAPEX savings have been achieved by seeking new ways to fulfill operational requirements with lower or no capital expenditure and Logistics benefits have been realised through freight consolidation. The administrative organisation is now fully geared to support a growing business and the overhead functions are flexible and scaleable to support increased sales volume either through the ‘One face to the customer’ strategy or acquisitions which can be easily integrated in the back-offices. The organisation is now back on track to deliver benchmark performance.
‘What you guys are doing is fantastic. You are helping us change our culture to achieve even greater results.’ SVP North American Operations.
Life Sciences
Metals & Mining
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Driving Talent Success always demands a greater effort.
You’ve got all the right pieces, but do you have the right glue? KPIs, SOPs, LEAN tools, Escalation Processes. It’s not how many Performance Management tools you have, says Cathy Johnson, Vice President at Celerant Consulting UK, it’s how you fit them together that really drives improvement. t’s a given that in today’s volatile, globalised economy, every major company has Performance Management tools in place. Of course that box is ticked and it probably cost a great deal of money and managerial time. But there’s a huge difference between something being ‘in place’ and it being ‘in practice.’
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The truth is that, in the majority of assignments Celerant has conducted over the years, we’ve found that what’s actually ‘in practice’ are disjointed, disconnected elements of Performance Management Systems that haven’t been fully implemented - and managers and supervisors who are under using the tools available to them. So what’s going wrong? No stickability means no sustainability One of the greatest responsibilities of a Leadership Team is not just to set the strategic direction for the company, but to make certain that everyone understands the context of that direction, is aligned behind it and knows exactly where they are on the journey. Leaders must articulate their vision, share ownership, establish Key Performance Indicators and then monitor and communicate progress to encourage ongoing buy-in. The glue in all this, and one of the things that separates out really entrepreneurial companies, is a comprehensive Performance
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Management system that helps information flow quickly from executive level to the cutting edge - and back again. It’s a system which: • Encourages real collaboration by making the right information available when and where it’s most needed; • Ensures timely decision making and action at each level of the organisation on a daily basis; • Role models the optimal set of behaviours required throughout the organisation to drive a culture of performance – starting at the top; • Relentlessly focuses on the discipline of getting things done. Only with this is in place and working fluently can Leaders really maximise their Performance Management tools by giving their best people the authority and accountability to study the data and encourage well designed experiments to deliver improvements. Supervisors are critical – if they actually supervise Most Performance Management systems break down at the ground floor level, or where the ground floor connects with middle management. Middle managers will often resort to fair weather reporting to senior management – and in the absence of clearly cascaded KPIs it could be argued that this is better than nothing. But the people at the cutting edge can often lose their line of sight. Was today’s performance good or bad? What can I change about it if it was bad? Where is the empowerment everyone talks about?
Supervisors and first line managers are critical to a company’s performance, but they’re often ill equipped to perform. Many are promoted before they have the training, skills and behavioural set to manage performance, so they shy away from difficult conversations and decisions. They spend their time trying to manage, but desperately wanting to return to the cutting edge, resulting in extremely high Non-Value Added (NVA) time - as Celerant’s latest major study clearly demonstrates. Who is really having an impact on performance? Covering the period from 2007 to 2009, one of the most critical business cycles in recent history, Celerant’s 2010 Workforce Impactability Study analysed the direct activities of 208 supervisors and operators in the Energy, Healthcare & Life Sciences, Chemicals and Consumer Staples industries on a day to day basis. After assessing more than 11,000 work hours, common themes emerged by comparing time spent on activities that add no value (NVA) to a company’s products or services, with those that do add value (VA). It showed that operators generate a stunning 50 percent more value than supervisors. Much of this is because operators are in the trenches, and very little of their time is spent away from product development and delivery. Even so, that separation in NVA means that supervisors are 5.43 times less likely than operators to participate in focused, value adding tasks.
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‘There’s a huge difference between something being ‘in place’ and it being ‘in practice.’
The good news though, is that study also showed that 43.5 percent of a supervisor’s daily work load can be effectively impacted, so to really drive Performance Management companies must microscope supervisor activities and determine which portions of the day can be altered to make more effective use of their time. This means examining specific roles to ensure that the right employees are performing the right tasks. Loosely defined roles and ineffective practices create a frustrating daily work experience, with a great deal of lost time. Implementing a simple architecture with clear roles and responsibilities is the first step in breaking this cycle and improving performance. MCRS® is Performance Management Superglue Throughout the study, NVA issues were stronger the further employees were from customer contact. This was especially true for companies that operate in silos, with a focus on departmental performance, rather than effectiveness across the
entire organisation. Supervisors and managers play a vital role in managing the risks of operating in a complex environment, acting upon errors that often go unchecked until they have set back the whole operation. A holistic perspective and process allows management to make the right decisions, improves communication and reduces the negative effects of errors from one department to the next. In addition, a team that understands its contributions and feels connected to the entire business is more motivated to deliver results. MCRS®, Celerant’s proprietary management system, is the superglue of Performance Management and Continuous Improvement, not only because it thoroughly links people and processes, but because it’s always developed with the people who will actually use it - and this creates a much greater understanding and appreciation of its true value. The ‘to be’ system is assessed in the early
stages to highlight what tools and techniques are currently in place and how they’re working. Are the processes fit for purpose? Are there too many meetings? Inadequate follow up or a lack of information flow? What KPIs do we really need? How will meetings be run around them? What behaviours do we want or not want? A benchmark of what constitutes good practice is useful, but it’s rarely accepted at face value because the objective is to evaluate performance and then develop a faster, more effective operational rhythm. The installation process is then rigorously measured on a weekly basis so that each management level can understand exactly what needs to improve further. This, coupled with extensive coaching and training, -develops the real behavioural and cultural change that ensures a business can maximise its Performance Management tools and achieve Continuous Improvement that is exactly that – continuous.
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Driving Results All thoughts must be distilled into action and action that brings results.
LOOKING FOR THE PERFECT GLOBAL PARTNERS?
IT’S ALL DOWN TO CHEMISTRY Janssen Pharmaceutica knew that to continue delivering patient value at affordable prices, External Manufacturing was crucial to its supply chain strategy. Celerant Consulting helped it find the perfect partners.
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‘ The immediate impact is that people are more capable of doing their jobs and working more effectively with partners.’ Luc Ruelens, VP External Manufacturing.
s a producer of active pharmaceutical ingredients for the Janssen Supply Chain, Janssen Pharmaceutica has to ensure that demand can always be met. Cost pressures on pharmaceutical manufacturers are global and growing all the time, so the company needed to implement a new strategy for the future. It wanted to become a supply chain organisation with both Internal and External Manufacturing (EM) to enable it to provide an equally reliable, competitive and compliant supply to global pharmaceutical companies such as Johnson & Johnson.
A
Creating long lasting relationships Celerant Consulting was brought in to help drive this new strategy and guide the company
on how to manage EM as a seamless extension of its own manufacturing footprint. Celerant’s experts worked closely with the Janssen project team to develop and implement a robust roadmap for the qualification, selection and development of EM partners. As the project involved multi-site management, contracts and contractor management, a comprehensive Project & Portfolio Management System was installed to achieve clear timelines and results-focus. Progress was driven by pre-planning and allocation of all resources across EM sites and effective decision-making was facilitated by applying clear criteria for each process step.
CONSISTENT RESULTS • EM partners are now managed as Janssen Pharmaceutica virtual sites. • EM partners are systematically managed to Janssen Pharmaceutica standards. • Consistent risk management has led to improved CapEx avoidance and accelerated cost productivity benefits in outsourcing.
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Driving Talent Success always demands a greater effort.
What’s the best medicine for your hospital’s financial wellbeing? Committed healthcare professionals. Faced with growing budgetary pressures, hospitals everywhere have to improve the effectiveness of their care delivery and their financial controls, says Sébastien Planche, Vice President - Lead Analyst Europe. Their biggest challenge is getting healthcare professionals fully involved with the process.
fficiency programmes are rapidly gathering pace in public healthcare establishments, but one element remains largely neglected: changing the behaviours of the medical and non-medical care staff so that they feel involved in these programmes and committed to doing their part to meet the improvement targets that have been set. That’s why Celerant Consulting has developed a Change Management model specifically aimed at this issue. It’s designed to improve cooperation and commitment right across a hospital and is organised around 4 main principles:
E
1. Involving medical and non-medical care staff in a Change Programme. This has to be the top priority for hospital management because it creates a common awareness of the need for change, and involves the whole value chain in the programme. To achieve this, homogenous, representative working groups need to be set up, consisting of doctors, nurses, medical support staff, hospital management representatives and any other people involved in the patient care path. These working groups can then identify existing dysfunctional areas and the changes that need to be made to achieve the desired efficiency gains.
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2. Encouraging greater cooperation between clinical department workers and healthcare managers. Before any restructuring initiative is launched in a clinical department, it’s absolutely vital to obtain a consensus from doctors on how restructuring will affect their day-to-day practice. It’s also vital to encourage greater cooperation between doctors and managers because the success of the changes will depend on the consistency of the messages that are conveyed to other hospital staff by this joint approach to governance. During the implementation stage, a managerial - medical staff teamwork approach should be systematically introduced in the hospital’s key planning meetings, so that both technical and medical expertise can be brought to each subject. Managerial staff will play a key role in identifying potential areas for cost reductions, following up the progress of the actions and implementing the new management methods, whilst doctors will play a role in engaging the medical staff. 3. Adapting the governance structure to reinforce healthcare management’s leadership role and coordinate efficiency actions at all levels. The first key action that’s required to make any
Change programme effective is to give senior non-medical staff more decision making authority: • Finance & Administrative managers must become a driving force for identifying cost structures and related areas for potential savings. • Chief Executives and Deputy Chief Executives must play a major supporting role in encouraging change. • Nursing Directors must play a strong motivational role within the plans and increase their influence among the medical staff to ensure that decisions are accepted. The second key action is to make all medical staff more aware of the goals of the financial recovery plan. The contract needs to be managed with regular follow up by the hospitals’ management committee, but it also needs to be taken onboard by all the medical departments and wards because it is within the care services themselves that the nuts and bolts of operational efficiency gains can be identified. In this respect, leadership of the administrative staff is a decisive factor. These are the people who will convey the instructions in the change process, so they need to be convinced and to be convincing.
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patients’ needs and patient management will be more efficient. Improved processes mean improved quality of care and improved financial wellbeing. It’s important for hospital management to communicate with everyone about the transformations that need to take place in healthcare establishments today and to demonstrate that they will not reduce standards of care in any way. On the contrary, improvements in processes, habits and financial savings will result in lasting improvements to the quality of care delivered to patients. For any initiative to fully succeed, therefore, this presupposes that both doctors and managerial staff possess adequate skills in terms of problem-solving, understanding the principles of how processes run smoothly, the basics arts of management and work organisation. By using these skills, they will free up more time to devote to patients.
‘ It’s possible to achieve two goals which are thought to be mutually exclusive: staff will be less overworked and more available to meet their patients’ needs and patient management will be more efficient.’
4. Implementing LEAN techniques to put ‘Patient Expectations’ at the centre of improvement plans and support efficiency programmes LEAN management is an approach to operational excellence that has come out of best practice in industry and in hospitals it focuses primarily on patient needs, waiting times, care standards, cost reduction and employee satisfaction. For a LEAN programme to succeed, it the must be seen as being credible from the outset by producing tangible results. So it’s essential to begin the programme in an area of the hospital where progress can be rapidly demonstrated.
One of the main features of day hospitals is the high throughput of patients who receive treatment each day. Most of the work in these clinics can be planned, so it should be possible to spread the workload over the course of the day and adapt the clinic’s patient capacity accordingly. This will lead to a reduction, for example, in the time taken to look for patient notes, patients being sent to the wrong rooms, the same information being entered several times, etc. By cutting wastage this way, it’s possible to achieve 2 goals which are thought to be mutually exclusive: staff will be less overworked and more available to meet their
An overall management approach is the only way to increase care activities and efficiency gains. The resources that this will free up can then be allocated, not only to improving a hospital’s financial wellbeing, but also to developing new areas of work or improving standards of care and working conditions. As a world leader in implementing sustainable improvements, Celerant is the partner of choice for hospital organisations that have decided to take up this challenge. Nicolas Paquet, Consultant, Jean-Paul Sacy, Manager and Jacques Kaspi, Principle Manager also contributed to this Change Management model for Hospitals.
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Driving Relationships Celerant clients, former clients & friends of the business share their expertise and experience.
‘Are companies doing enough at the sharp end of a Mega-trend? No.’
Bert Witkamp is the owner of BWC Sustainability Partners and an Associate at Thrust Consult. He previously held senior management positions in Operations, Supply Chain and Sustainability at several international companies, including 20 years with DSM where in his function as Corporate Manufacturing Director he set up a Life Cycle Analysis Competence Centre.
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Sustainability
F
ar-sighted CEO’s have already integrated Sustainability into their
You describe Sustainability as a Mega-trend. Is it really that big?
overall strategy, but Bert Witkamp argues that really effective implementation on the ground requires a solid understanding of environmental impacts, Life Cycle Management tools and LEAN practices.
In just a few short years, Sustainability has transitioned from fringe interest to mainstream imperative. In a recent survey of 1,000 CEOs for example, 93% considered it absolutely essential for future success.* The ‘Life-Cycle’ concept what goes into a product and what happens at the end of its life - is now embedded in mainstream governmental, societal and business thinking. In its Communication on Integrated Product Policy, the European Commission concluded that Life Cycle Assessment(LCA) provides the best framework for judging the potential environmental impacts of the products currently available, and in the USA, the Environmental Protection Agency is developing strategies for the sustainable use of natural resources, waste reduction, and recycling based on a Life Cycle approach. Consumers are also demanding more and more proof of the green or social credentials of the products they buy. ‘Green washing’ or the making of false green claims, still occurs, but it’s being rapidly replaced by facts, certification and independent assurance. Regulated product labelling programmes to protect and inform consumers are now a trend. In France, the Grenelle 2 law provides a pilot for the mandatory environmental labelling of a wide range of products and last year the US Federal Trade Commission adapted its Green Guide to
make deceptive environmental marketing claims a potential criminal offence. So it’s not just good ethics, it’s good business. Relating Corporate Social or Sustainability performance to the bottom line though, is still proving difficult for many people.
Should companies use their ecological footprint as a performance yardstick? Absolutely. For CEO’s and their businesses, real insight into the levers of sustainability and how they affect their products, processes and supply chains is absolutely essential. Without it, it’s impossible to make robust decisions about investment, market and product portfolio strategies, technology choices, make or buy preferences, or plant locations.
Where are current Sustainability strategies falling down? The problem lies with the fact that they’re largely focused on defining policies, setting targets, repositioning existing products, developing green products and introducing life cycle management thinking. A company’s environmental impact and the life-cycle footprint of its products are important elements in defining a strategy.
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Driving Relationships Celerant clients, former clients & friends of the business share their expertise and experience.
93
%
OF CEOs CONSIDER SUSTAINABILITY ESSENTIAL FOR FUTURE SUCCESS
Life Cycle impact analyses are science-based, so expert consultants are often required, but there’s no magic formula and every company needs to develop a tailor made approach. The real issue is that although this is essential as a first step, it does not address the problems of embedding Sustainability into the core processes of the business.
There’s no cohesive effort down on the ground? Too often, a Sustainability strategy is simply deployed on a project by project basis and treated as a separate activity from core business processes. Even very committed companies struggle to close the gap between strategic Sustainability intentions and the reality at an operational level, so awareness of what Sustainability actually means in relation to day to day work remains poor. Effective implementation requires Sustainability KPIs and the integration of Sustainability practices into existing manufacturing processes, supply chain management and product development.
So Life Cycle Management tools have to drive everything from cradle to grave? Yes. By mapping the ‘footprints’ of their products and processes, companies can identify environmental and other hotspots and then develop
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Eco-Efficiency, or specific targeting to improve both economical and ecological performance, as an effective tool to reduce these impacts. The environmental impact of packaging is rightly much debated, but smart packaging protects goods and prevents waste. Food losses over the total chain can be as high as 70% and up to 40% for consumer purchased food.** So in many cases, LCA can demonstrate a positive contribution to packaging. Sustainable or Green Procurement can also have a major impact on the ecological and social footprint of a product. Cleaner production contributes through waste reduction, lower energy consumption and more stable processes. This not only reduces the footprint, but also costs and environmental incidents. Life Cycle Costing makes the connection between environmental impact and economics by evaluating the total value chain.
What about Eco-Design? Implementing Eco-design processes aids the development of new, sustainable products and processes by incorporating environmental impact as a variable. For example, executing a Life Cycle Analysis for washing detergents showed that heating the water had the largest environmental impact of the entire washing process - and this discovery spurred the development of cold water detergents.
How can you integrate ‘Footprints’ with Standard Processes? Deciding what needs to be done is a process in which the first steps are relatively easy to implement. Trends are clear and the UN Global Compact, WBCSD, GRI, ISO and UNEP have all developed widely used frameworks and materials. As well as generic Sustainability requirements like reducing greenhouse gas emissions, energy use and responsible sourcing of raw materials, business specific needs will be determined by stakeholder concerns, industry specific issues and individual company strategy. A good beginning is to apply the eco-efficiency principles of reduced material intensity, reduced energy use, use of renewable materials and energy, recycling and extended product life. The challenge is to establish a base line and monitor improvements to gather key data for effective operational steering. The principle of ‘What gets measured, gets done’ definitely holds true for sustainability issues. For example, companies will calculate their greenhouse gas emissions, but fail to implement a management system to continuously improve their footprint. Line-managers might not even be aware of what’s been measured because it’s often done centrally. So the Life Cycle Management approach, looking at a large number of parameters with higher complexity and data intensity across the entire value chain, cannot be effective without
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Sustainability
7.4 GOODGUIDE RATING
embedding sustainability into existing management and work processes. The current trend is to execute detailed LCA on individual products or product groups, but although Footprint analysis and reduction is important as a first step, bigger gains will be made by applying eco-design methodology, with process redesign, sustainable sourcing, formulation changes or combinations of all these.
Where do you see the next steps? Life Cycle Assessment, Eco-design, Eco-efficiency and Life Cycle Costing are rapidly growing in importance. Legislators, customers, authorities and final consumers are making many of their buying decisions on information supplied with products. Regulation driven eco-labelling schemes like ‘Energy Efficiency’ for electrical goods are already well known, but public initiatives like GoodGuide in the USA, where consumers scan a product barcode on their mobile and get on-line sustainability data on that product, producing company and alternative products, could become huge. So it’s crucial that the management and work processes needed to generate these data and improve ecological performance are executed efficiently. It’s also crucial that they’re then embedded into the organisation with key metrics for effective operational steering. Practices like LEAN manufacturing, Six Sigma and Operational
‘ Real insight into the levers of sustainability and how they affect your products, processes and supply chains is absolutely essential.’ Excellence can be successfully applied in combination with environmental data gathering from the supply chain, R&D and marketing processes. Sustainability indicators can then be linked with economic and business performance indicators. Today, this approach of integrating ecological footprinting with core business processes is rarely seen. Yet effective, industrial scale footprint reduction can only be realised through an integrated Life Cycle approach. Indeed a solid, detailed knowledge of practical sustainability and an expertise in LEAN processes can be combined to develop LEAN Life Cycle Management - and that benefits everyone.
* UN Global Compact-Accenture CEO Study 2010 ** Nestlé at LCA Food 2010 conference
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Driving News Examining global issues in global publications.
Will LEAN help the Oil & Gas industries achieve zero-defect performance, or hamstring flexibility and responsiveness?
THE ANSWER LIES As Vice President-Energy for Celerant Consulting Americas, Gary Traylor knows that LEAN success requires skilled management from design to implementation, particularly in the face of oilfield resistance. He expanded on that view in a recent article in E&P magazine.
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hat distinguishes LEAN from other management principles is that it requires re-engineering all inter-related and supporting processes at the same time. LEAN presents the most comprehensive way of thinking about business and operating improvements, while fully accounting for each process, system, organisation and its requirements for an integrated solution. This approach to improvement is very different from other change initiatives such as Six Sigma. Instead of viewing a process through measurement and analysis of variations and underperformance, for example DMAIC - Define, Measure, Analyse, Improve, Control - LEAN systematically looks for value in every process from beginning to end.
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LEAN offers a more robust approach that includes trial and error and creates more sustainable results. It also leverages higher order management systems for control of processes and standardisation of operating procedures. Such metric guidance
the challenge of breakthrough performance, visibly demonstrating management’s alignment and support for them. In addition, some programmes employ months of extensive training, pilot programmes, or statistical analysis, stalling momentum and delaying tangible solutions and results for which management can claim victory.
myths about personalities, or perceived risks associated with change, especially when safety and environmental performance are of the highest priority.
‘Sustainable LEAN performance is much
The faster and more effectively LEAN can be integrated into operations, the faster business transformation will occur. Hence, the concept of 'value velocity' comes into play.
more about people and
Significant improvements in the oil patch In the exploration process many support and sub-processes are infamous for causing delays.
plants or equipment.’
Whether waiting on seismic interpretations, permits, infrastructure build-outs or final exploratory drilling prognoses, the overall
Sustainable LEAN performance is much more about people and their behaviours than it is about technical fixes, plants or equipment.
their behaviours, than it is about technical fixes,
OUT IN THE FIELD serves to better direct the workforce on a daily, shift-by-shift, area-by-area basis.
Faster operational integration means faster business transformation Responding to intense international competition and cost pressure, LEAN principles have already been applied in most major industries. Oil and gas companies, however, have been reluctant to adopt the principles out of concern for lost flexibility in the face of the unknown. As any oil and gas executive knows, each piece of information secured during an exploration, development, or production optimisation effort can dictate an unanticipated course of action. Every core business process is supported by several support processes and sub-processes. On rigorous investigation, many of these can be improved and standardised to some degree, collectively resulting in breakthrough performance for the core process. LEAN not only applies to repetitive processes such as well drilling and well repairs, but also to one-off processes such as capital projects and greenfield developments. Many LEAN programme leaders however, fail to recognise how important it is for top management to get the entire workforce to openly embrace
performance of the exploration process is often constrained by the performance of its many parts. By improving each of the parts, the core process can be improved to a meaningful degree. LEAN can also be successfully applied in many other areas, including LEAN developmental drilling, Offshore drilling and operations logistics, well-completion processes for onshore gas, particularly shale gas operations, welloptimisation and workover programmes and gas gathering and compression system optimisation. A Change Management programme is crucial to making LEAN sustainable Expecting real cultural change to become part of the organisation’s DNA is simply not going to happen overnight. This is where another profound shift in thinking is needed.
The process of change must consider the reality of the situation in which people work. To change behaviours, management must engage the organisation around desired behavioural norms to demonstrate the benefits of changing behaviour. In the oil patch, particularly in the field, change can be met with stiff resistance - whether based on a company’s historical success, enduring
Changed behaviours bring real bottom-line benefits Achieving significant success through LEAN relies on finding the right fit, charting a robust roadmap to the end, measuring success along the way, and winning genuine senior level commitment. The workforce must fully grasp its short, medium, and long term targets and objectives for the programme and understand how results will be measured and reported to upper management. By emphasizing value velocity, initial results should come quickly, keeping momentum moving forward.
The company that accurately identifies opportunities, engages its workforce, and builds the right systems to measure performance and ensure continuous improvement can iterate the value stream cycle faster, thereby getting more out of its organisation over time. When combined with the right focus on changing behaviours and getting buy-in from employees with rapid, visible, measurable results, LEAN can bring oil and gas companies real bottom-line benefits.
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Driving Performance We must learn to be equally good at what is short and sharp, as what is long and tough.
Doing More With Less
Refining Maintenance Costs
BUSINESS CHALLENGE The client is a global leader in smokeless tobacco, with other global brands including cigars and matches. It was under pressure from big tobacco conglomerates looking to enter the market, tougher regulations and rising taxes on tobacco products, so it needed to significantly improve its business practices. Celerant Consulting has proven expertise in delivering operational improvements, so it was brought in to drive a complex Change Programme that would reduce costs and increase performance and flexibility.
BUSINESS CHALLENGE The client is one of N. America’s largest integrated energy and energy-related companies, with upstream, midstream and downstream segments in Canada, the United States, Greenland, Indonesia and China. It wanted to implement a major improvement programme at one of its largest refineries, producing gasoline, diesel and aviation fuels to meet U.S. clean fuel standards. The aim was to increase the effectiveness of Maintenance activities by aligning Operations and Maintenance and achieving a sustained 20% reduction in direct maintenance labour costs. Celerant Consulting was brought in to help drive the programme.
CELERANT SOLUTION To deliver a holistic step change in performance and create the framework for Continuous Improvement, Celerant Consulting helped design and implement a comprehensive Change Programme focused on Quality, Delivery, Economics, Safety, Technology, Environment and Personnel. Concurrent teams were established in: Manufacturing Excellence (across 3 plants in Europe and the US); Production Planning & Logistics; Industrialisation & Development; Product Quality; Safety & the environment; Procurement; Operational development; Communications and Common Management Systems - all working under a Programme Management Office led by Celerant experts and Client managers. To deliver hard financial results, Celerant Consulting focused on the Manufacturing Excellence and Production Planning & Logistics teams, with cost and production and delivery targets under the most scrutiny. Robust capacity planning and production line improvements were made and LEAN manufacturing tools were implemented to drive sustainability and Continuous Improvement. RESULTS The results exceeded the plans that had been set and validated by the plan controllers at the beginning of the programme. •Direct manufacturing costs and tobacco waste have been drastically reduced. •Overall production (OEE) on all European lines has increased by16%. These substantial improvements have been acclaimed by the Executive Management and will be closely followed as the company broadens its global strategy. ‘This has been a lot of hard work and great results - well done. Now let’s focus on making this continue.’ VP, Global Supply Chain.
FMCG
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CELERANT SOLUTION It was critical that the site’s environmental and health performance was maintained or improved, so that it could continue as a leading refinery and obtain the necessary capital to upgrade and process lesser grade crude. Joint Celerant - Client Teams representing maintenance and operations were formed to implement a redesigned work order process and a robust MCRS® Management System. Overtime and contractor controls were established as part of the work order process, and integrated work order scheduling was implemented. Celerant’s experts also used the Closework® approach to train the site’s supervisors to adhere to the new process and use it to drive improved cost and reliability. This involved: •Implementing the Maintenance Process MCRS® Management System, including KPIs for each role. •Developing a new KPI Hierarchy and establishing a review meeting structure. •Delivering Training Modules on maintenance job planning, scheduling and active supervision. •Providing a road map for a Reliability Process. RESULTS Direct maintenance labour costs were reduced by over 28%. •Daily schedule attainment increased from 28% - 86%. •4 resources were trained on Celerant implementation methodology and a comprehensive training programme was established for new employees. ‘We did not have a process culture. The change Celerant has created, a process oriented culture, weekly KPIs with Continuous Improvement, is really a sea change. It is really huge.’ Team Member.
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Creating A Team Of Champions
A New Identity. A New Future.
BUSINESS CHALLENGE This client is one of the world’s largest producers of zinc and copper, employing thousands of people in its mining and smelting operations. It wanted to implement a plant wide Business Excellence Programme that would increase productivity, reduce costs and create a culture of Continuous Improvement, flexibility and fact based decision making.
BUSINESS CHALLENGE The client is the specialty chemicals division of a leading consumer products company in North America. Prior to arriving from a competing company, its new President had gained a perception of the business as well managed, but with limited room for innovation. So on arrival, he proposed that the business should completely rethink its identity - not seeing itself as a standalone specialty chemicals organisation, but as the business-to-business arm of a consumer company. The difference was not merely one of semantics. Investors expect a consumer business to meet higher standards in revenue growth, earnings and profitability. The President argued that this new mindset, along with new processes, systems and behaviours to support it, could enable the Division to grow by more than 30% in 3 years, with a much higher operating profit and return on capital employed. Celerant Consulting was chosen to partner on the project because it demonstrated a global expertise in both Change Management and Behavioural Change.
CELERANT SOLUTION The client selected one of its Northern European plants as a pilot and chose Celerant Consulting to help it deploy an operational LEAN Programme with the strongest focus on Production, Maintenance and HR. The project was divided into 3 large workstreams: Process Excellence, Organisation Effectiveness and a site wide MCRS® that focused on KPIs and short interval controls, from shift level up to management, and laid the foundations for transparency and fact based decision making. Collaborating with the workforce and implementing methods such as root cause analysis, 5S and Operator Maintenance, Celerant's experts improved processes by standardising methods and tools, with the result that production stabilised operations became safer and more fact based. A Rigorous Closework® approach also created a team of internal MCRS® Champions to support the drive towards Continuous Improvement and real behavioural change occured when every manager and specialist was trained in Leadership Development. RESULTS Annualised improvements worth millions of euros have been achieved through increased performance in production and supporting functions, better inventory management and reduced energy consumption and contractor costs. •A new LEAN framework has been created and accepted as the foundation for the corporate programme. •A site wide MCRS®, from shift level up to management, has been implemented across Production, Maintenance and HR and a team of MCRS® Champions has been created to drive the culture of Continuous Improvement. •Celerant is now involved in the next stage. ‘The programme was very intensive and our organisation was pushed to its limits, but after all the hard work we can say that this was needed to kick-start our journey towards Continuous Improvement.’ Production Director.
Metals & Mining
CELERANT SOLUTION The project’s implementation was scheduled for more than 32 weeks of intensive activity. The goal was a performance step change across all the Division's functions to hit stretch targets for revenue, earnings and growth. The joint Celerant - Client teams therefore placed particular emphasis on the relationships between functions. This enhanced overall effectiveness to unprecedented levels, as individuals, teams and groups could play to the company’s functional and cross-functional strengths, while using disciplined methods to identify and pursue opportunities. RESULTS A new stage-gated product development process added over $20m in just 24 weeks. •Over $1m in benefits was achieved in just 20 weeks, 50% higher than target. •A gross expense reduction or avoidance of almost $0.5m was also achieved. •The strategic foundation was laid for more cost effective sales and marketing organisations. ‘I endorsed Celerant’s methodology and challenged the division to buy in. This was not something we were going to do halfway.’ President.
Chemicals
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Driving Results All thoughts must be distilled into action and action that brings results.
Revitalising a relationship s the world’s largest Human Resource Professional Association, the Society for Human Resource Management (SHRM) made its mark by engaging with more than 250,000 members. Membership had grown consistently over the past decade as it came together around education and certification programmes, public policy outreach and publications. However, the global economic downturn demanded something more than business as usual - and provided an opportunity to look at the future.
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SHRM realised that to ensure stability and future growth, it needed to take a fresh look at its Membership offering, its Annual Conference and the way it used technology. If these could be improved, emerging markets such as India and China offered exciting new avenues to grow membership and take its message to a more global audience.
Look, listen, learn - then respond Celerant’s Closework® approach had resonated strongly with SHRM and its staff quickly became an integral part of a new team that set ambitious targets for 2010. To help SHRM achieve its vision of being the authority on human capital challenges facing companies, governments and non-profit organisations across the globe, programmes would be launched to pursue a 25% growth in annual conference paid registration, a renewal rate over 80%, a doubling of revenue from corporate sales, a new product development process, and an organisation-wide operations reporting system. To achieve these targets, Celerant tailored its Closework® approach to SHRM’s specific situation. Consultants spent critical time listening, coaching, training and engaging SHRM staff. Then together, they developed team charters, team member selection criteria and established milestones to ensure organisational success.
New behaviours and new technology The team also conducted analysis, market research, idea generation and brainstorming sessions that not only provided technical solutions, but with the help of SHRM HR staff, included staff engagement and buy-in. This led to a framework for controls in the form of regular follow up meetings, weekly status updates, reviews with business unit owners and executive sponsors. Celerant’s consultants also provided SHRM staff with the tools they needed to take ownership and ensure sustainable Behaviour Change. These included a comprehensive MCRS® System and KPIs for Corporate Sales, Professional membership acquisition, Annual Conference Paid registration, technology project status, and the paid circulation of SHRM’s official publication. The outcome is a more results oriented, data driven organisation.
When the Society for Human Resource Management wanted to increase membership and re-energise its members, volunteers and ® staff, Celerant Consulting’s Closework approach was a decisive factor.
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requires the human touch. AMBITIOUS TARGETS DATA DRIVEN RESULTS • Registration for 2010’s Annual Conference increased by approximately 70% over 2009. • US professional membership renewals increased by 4% over 2009. • A new product development process was implemented that enabled SHRM’s membership bundle to be rationalised and resulted in a recommendation to change over 50% of the bundle offering. • Resources and systems were also put in place to help Continuous improvement, including a Conference Planning playbook and a process to document and rationalise technology goals that paved the way for the first mobile applications and member marketing and engagement efforts.
‘ Rather than simply bringing a cookie-cutter approach, Celerant worked with us to first learn our business and our culture. This resulted in solutions that were much more quickly incorporated into the way we managed our business.’ Steve Miranda, SHRM Chief HR and Content Integration Officer
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Driving Results All thoughts must be distilled into action and action that brings results.
When Rieber & Søn wanted to transform itself from a business conglomerate into an integrated food company, Celerant Consulting was a vital ingredient.
‘Everything is on espite its position as a leading supplier of products to Northern Europe’s retail food service industry and ingredients to food manufacturers, Rieber & Søn’s financial performance was not as strong as it could be in comparison to peer group companies, negatively impacting its share price and consequently shareholder satisfaction. The organisation was struggling with inefficient production processes and interfaces between sales and production that lacked structure and quality. To counter this, it decided to launch a pan European Change Management & Improvement Programme that would completely transform its entire operation. Everything was on the table.
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Creating the right mix Rieber named the programme ‘Our Future’ and appointed Celerant Consulting to help it drive the ‘Future Production’ element, involving Production, Maintenance, Planning, Warehouse and Energy. Celerant was appointed because it had demonstrated deep expertise in managing complex projects in a multi-site and multi-cultural context. The challenge was to introduce cost savings that would bring EBITDA into line with industry standards. Celerant was first tasked with improving the operational performance of 2 key factories in Norway and the Czech Republic. Having achieved impressive results at both sites, it was then tasked with the full restructuring programme involving 13 of Rieber’s 15 sites.
The programme was divided into 5 phases: Design, Install, Implement, Sustain and Continuous Improvement. Performance improvements would be achieved through better asset management, a more focused performance culture, improved management control and reporting systems, greater performance visibility and tailored processes. Once all these had been designed, they were consecutively installed, implemented and sustained. Sustainability was monitored by various tools and during this final phase, new improvements were also planned for the period following the programme. Once the Continuous Improvement phase had been running for some time, performance was followed up by regular audits.
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Real food for thought Celerant’s team worked closely with the client taskforce to create leaner, more professionally run factories where planning, execution and evaluation at every level is precise and disciplined.
Seeing the future from 13 angles Managing a multi-site programme means that planning, alignment, standardisation, open communication and the constant delivery of high quality are key elements in making it a success. So Celerant’s experts implemented an integrated Programme MCRS® Management System and detailed planning to ensure total alignment and communication at every step of the journey.
the table.’ ‘ Celerant has a special capability that I have not seen in other Consulting companies. You’re really good at going into details from shop floor to senior management level. Thus securing full implementation and more importantly, sustainability via lasting changes in behaviour.’ Frank Mohn, R&S Supply Chain Director
Production costs were reduced through more efficient use of resources, overtime and downtime cut. Inventory holding improved through greater plan attainment and reduced reliance on safety stock. And the support costs for each site in terms of energy, services, maintenance and other costs were also cut back.
What began as a project covering 2 sites in 2 countries has grown into an international programme covering 13 sites in 7 different countries. All Rieber’s main sites have now gone through the ‘Future Production Programme’ and the last remaining factories are being improved this year.
5 RESULTS • Savings of around €18m. • OEE increased on average by close to 23%. • Plan attainment, preventive maintenance and many other operational KPIs have all realised their stretch targets.
Although all 13 sites are different, a standard set of tools, processes and techniques was developed, together with a standard training plan to facilitate real behavioural change right across the organisation. As the programme advanced these standards were continuously improved so that the baseline was constantly raised. Everyone involved has been successful in building upon previous performance, raising the bar for future projects.
• A culture of Continuous Improvement has been installed, with a committed, proactive workforce.
Developing uniformity quickly led to more cost efficient products being delivered on time, in full. As a direct result, employee work experience became less stressful, with their actions being proactive and preventive, rather than reactive. This real cultural and behavioural shift also allowed for greater focus on process improvement, preventive maintenance, training and knowledge transfer.
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Driving Results All thoughts must be distilled into action and action that brings results.
TCO: The hottest challenge for a cold rolled steelmaker. Kandil Steel’s ambition is to become a high quality, low cost steel producer, so it asked Celerant Consulting to help it forge a new TCO model - and a can do attitude.
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gypt’s Kandil Steel is a genuine regional player, with over 22 years experience of manufacturing cold rolled, hot rolled, galvanised and pre-painted steel. Its ambition is to become a high quality, low cost producer, but despite exceptionally strong technical capabilities and a recent investment in a new service centre, it knew that many parts of the business could still improve.
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Kandil Steel operates in a fiercely competitive market and a complex sector in terms of quality and conformity, so a decision was made to launch a high impact Change Programme and Celerant Consulting was brought in to help design and drive it. Galvanising the entire operation Kandil’s mission is not just to deliver first class products, but to build lasting relationships with its local and global customers. So improving customer satisfaction was at the core of the new programme. Designed to increase profitability by rationalising supply channels, redesigning the end to end supply chain process and increasing product quality and conformity, the programme was holistically focused and included 4 workstreams - Supply Chain Management, Sales, an effective MCRS® (Celerant’s management system) and a TCO (Total Cost of Ownership) model that would enable Kandil to balance optimised cash flow with customer satisfaction.
It was imperative that Kandil not only target every inefficiency that might exist within its delivery system, but also redefine and re-engineer the way its supply chain functioned so that it could build strong business relationships with its suppliers. Celerant Consulting designed a sophisticated TCO model that scrutinised every component of total cost, from the procurement of raw materials to the shipping of finished product, and as part of a comprehensive MCRS®, installed and measured relevant KPIs at every level throughout the organisation to drive compliance and generate savings.
‘TCO made us realise that we were buying the cheapest coils, but not necessarily the most profitable ones.’ Khalil Kandil, CEO.
Celerant also introduced a streamlined purchasing process to support the new culture of Continuous Improvement by driving supplier OTIF and quality and thereby reducing inventory. In turn, the new S&OP procedures impacted customer satisfaction by increasing OTIF and quality. HOT ROLLED RESULTS • Within 3 months of TCO installation, the application had saved $141k on purchase orders for 1 month ahead • Annualised savings of $1.15m have been achieved • Inventory write-offs reduced by $3m • Inventory levels reduced by an average 5 days on hand • Management compliant Operational KPIs fully installed • SICs implemented across different functions • A Performance management system and can do attitude fully embedded in the team
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Driving Relationships Celerant clients, former clients & friends of the business share their expertise and experience.
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elerant Consulting Americas asked a group of Senior Executives to
share their insights into the Top 3
‘What’s top of the agenda for today?’
Challenges facing CEOs today. During the boom years, capital rich companies invested heavily and were open to taking risks. With a cooler economy, organisations are finding that the returns they’d hoped for simply aren’t there. At the same time, CEOs everywhere are looking for new products to bring to market. So what factors, trends and pressures do they face?
1 Balancing risk, innovation & quality
Innovation and investment are vital for success. How hard do you think this is in the current climate? JIM-Life Sciences: In our industry, innovation has always been the key to new products, but last year, pharma invested $4bn in R&D, and the FDA approved only 21 products. Companies are spending more money, but they’re not getting products in the market. And many of the products that are getting out there are not the innovative blockbusters they’re searching for. WAYNE-Manufacturing: Manufacturing has a slightly different challenge. It’s always led the pack in efficiency and cost cutting, but now there’s a real concern over losing quality because of the complexity of global supply chains. The total value of the supply chain is not what we thought it was. We’re not getting bang for our buck if you take the whole picture into account. Over the past 15 years, everybody’s been chasing cheap labour. Well, it turns out that in our current economy, and with the way the world’s going right now, chasing cheap labour is a very expensive proposition.
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The Top 3 CEO Challenges
You have to manage quality, delivery, design changes. Every CEO that I’ve talked with over the past month had that on their list of things they’re looking at very hard. STEVE-Energy: The energy sector’s investment challenge is about the maturation of the industry. With oil production, all of the easiest fields have already been found. Exploration is getting riskier and oil fields are yielding less than they used to. The threshold for making a field economical is higher, costs have gone up, and this means risks - political, environmental, technical, and cost - are increasing. If you look at the investment that’s been made by the industry in general and the returns that are coming out of exploration, it’s getting tougher and tougher to find new accumulations, particularly of big fields. What’s been happening over the last decade has been a further deterioration in the performance of rank exploration. The probability of success on prospects is less today than it was 20 years ago. The frontiers of the late ‘80s and early ‘90s were deepwater and international. The international opportunities haven’t always panned out quite the way every¬one anticipated, primarily due to a growing nationalism in the host countries and a reluctance from international oil companies to come in and take part in developing and taking a share of the resources. You can always find volumes, but they have to be economical to be developed.
2 Innovating through acquisition
Where are CEOs today putting their money to get the revenues they need? Are they innovating through acquisition? STEVE-Energy: They are in our industry. The opportunity is shifting to a new way of getting the product altogether. We’ve had new technology that has come along and opened up reserve opportunities from existing accumulations that we knew were there, but we couldn’t really economically access in the past. A good example of that are the hydrocarbons coming from shale formations. If there’s a toehold that companies can secure through buying an independent
company that already has the acreage, then they will do that. It’s not that they’re looking for the expertise of the people that come with those companies; it’s that they're looking for their access to acreage. Shell has done three acquisitions in the last several years, and recently, Exxon acquired XTO, a $30bn acquisition of an independent company that had a lot of interest in tide gas, shale gas, and other unconventional onshore gas. JIM-Life Sciences: You have to be careful though, M&A is not a magic bullet. Most pharma companies took it way too slow, didn’t get enough cost synergies, and usually disappointed Wall Street. What’s being left on the table is the opportunity to improve efficiency in manufacturing. By picking up more and more companies across the globe, we’re stretching the supply chain out and adding more complexity. I think companies are going to have to get better at M&A and try to make it happen quicker, more efficiently, and truly understand what they’re getting into. Most of the time they focus on cutting people or programmes. But getting manufacturing and operation streamlined, that needs to be improved.
3 Managing & developing talent
This continues to be a problem across all sectors. What more can CEOs do? DAVE-Service 2: Top talent wants to be around other top talent. CEOs are realising they can’t ignore talent management because as the economy warms, your best people are tempted to leave, and when you are trying to make big changes quickly, you need those people who are able to think strategically. You need you’re A-team. And not only do you need them to stay, but you need them to step up. Executives are screaming for leadership, management and corporate maturity training. FRANK-CPG/FMCG: When you make acquisitions, you need to get the people who have just been acquired to recognise that they have a bigger, brighter future. You also need to get your own people to see that there are an awful lot of
things that the acquired company did well that we need to bring into our culture. You have to have leadership at the very top and within the organisation that understands that there is value on both sides of that M&A activity. At the same time, you need to move quickly to drive the economic and marketplace advantages out of that M&A, because they don’t have forever. WAYNE-Manufacturing: Companies that have developed a great culture over the years are losing that culture, and they’re very concerned about it. The manufacturing industry in particular is losing people that have been around a long time and helped develop and grow the respective culture of their companies. CEOs have got to get back to where the people they are bringing in really feel that there’s a strong company bond.
The group has extensive experience of these issues across a wide range of sectors: ENERGY: STEVE MANUFACTURING: WAYNE LIFE SCIENCES: JIM CPG/FMCG: FRANK CHEMICALS: PEGGY SERVICES: DAVE
PEGGY-Chemicals: People are arguably a company’s most valuable assets and without taking a careful and strategic approach to talent management and development, CEOs risk not only losing good people, but also hampering innovation and quality outcomes as well as hurting the company’s brand, reputation, and culture. Conclusion Innovating new products, acquiring companies and building a team for the future isn’t easy. With the world changing so quickly, CEOs are worried that what they’re going to do this year, may be undone next year. They’ve got to recognise that someone needs to be focused on each major issue, particularly the culture issue. It needs to be something that is actively, aggressively worked in order to get it fixed. And in a lot of cases right now, the question is, are they doing the right things and are they doing them quick enough, and are they doing it in such a way that they’re going to stick?
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Driving Talent Success always demands a greater effort.
How to ensure your new Industrial Footprint gets off on the right foot. A strategic vision is key, says Fernando Cruzado, Principal Manager at Celerant Consulting Germany, but it will remain just a vision if it isn’t consistently translated into action. hese days, every major organisation is putting its Industrial Footprint under the microscope, either to explore cost reductions or support profitable growth. There’s no doubt that such structural changes can provide a real step-change in performance, but how do you design and deploy the new Footprint so that it links consistently to the overarching company strategy?
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Redesigning an Industrial Footprint goes way beyond shifting manufacturing assets from one place to another. Complexity kicks in when you consider the necessary supplier network, the knowhow transfer of R&D functions or the restructuring of a sales organisation. Then there’s the people dimension. Major change programmes always have a significant impact on the affected parties and that will need careful handling. Adding to the complexity, typically a significant number of possible Footprint options can be identified in the beginning creating the challenge to discard the non-viable ones and concentrate effort on the appropriate scenarios. Translating strategic ambition into operational reality In simplistic terms, to develop a successful Industrial Footprint a company needs to answer these 4 questions: • WHAT products and services should we offer to what markets? • WHERE should we situate our Manufacturing, R&D and Supply Centres, and where should we
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generate value, in-house or by outsourcing? • WHY should we choose a particular set-up? What’s the inner logic of the envisioned Footprint and how does it link to our strategic vision? • HOW does our capability profile, skill level, technology etc match what is needed to deploy the envisioned Footprint successfully? Most companies will have a pretty clear idea of how to answer the WHAT and part of the WHERE questions, but our experience has shown that the other 2 are often not considered thoroughly enough and this causes a disconnect between strategic ambition and operational reality. It’s therefore crucial to follow a phased approach which ensures consistency from the strategic level right down to the implementation projects. In other words, the Celerant 4 Phase approach. Phase 1: Developing the operational strategy. Following an outside-in-view, major market requirements such as cost efficiency, market access, responsiveness, etc are captured and prioritised. At the same time, the constraints of the existing network in terms of flexibility for product transfers and relative cost structures need to be understood. Both elements are the basis for the Footprint Design Principles that will need to be followed when developing the future structure. It’s extremely important to have a clear alignment on these overarching principles in the management team, as they will
form the foundation for the Footprint design. Whenever questions arise in the later stages of the process, these Design Principles will ensure a consistent approach. Phase 2: Defining the relevant scenarios. Once the Design Principles have been agreed, potential Footprint scenarios can be developed.
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These are then assessed with regard to their high-level benefits, with no-go options discarded and the few scenarios which need further investigation identified. Phase 3: Checking the operational feasibility. Each scenario is now rigorously tested against operational feasibility and the
Phase 4: Implementing the chosen scenario. This phase is the most demanding in terms of Change Management expertise because many parts of the organisation will undergo profound change. Numerous elements need to be closely managed and range from the security of knowhow and key resources, to the selection/qualification of Supply Chain, to the management of motivational /performance factors within the organisation. It’s therefore not unusual to sequence the implementation projects according to their effort/impact ratio. Ensuring success and sustainability Redesigning your Industrial Footprint is not just about creating a profitable, future-orientated structure, it’s about transforming your organisation. So success can only be achieved by following a really comprehensive approach. Insufficient consideration of site capabilities and market implications or the implementation feasibility from an internal/external perspective can lead to sub-optimal set ups which can negatively impact the business - at worst leading to costly rework of the new Footprint. The right involvement of stakeholders is also decisive for success. During initial strategy development this will focus on the top management team to ensure objectiveness and confidentiality. Going into implementation larger groups will be involved to build confidence and get commitment.
contributed business case. Key outputs are the value/risk ratios which serve as a basis for the final selection. Once this final selection has been made, it’s important to determine the main implementation steps and projects which will help to make ambition become reality - and have a transparent view on feasibility and effort required.
Based on our experience we have developed the Celerant Industrial Footprint PyramidTM which highlights all the key factors for success and is backed up with structural change management knowledge to make a new structure sustainable: • Quality, Technology & Compliance: An assessment of the process capability and know-how level of the receiving entities that provides a comprehensive view on quality, as well as R&D capabilities. It can help to avoid apparently attractive transfers to low-cost countries, which then turn out to be more costly than an existing set-up. • Source, Plan & Delivery: This focuses on the changes induced by the drive for optimisation of the Supply Chain. For example, an extensive evaluation of global sourcing synergies, warehouse
structure and costs, as well as supply performance benchmarking in the old and new footprint • Transformation Feasibility (external & internal): An evaluation of implementation feasibility, considering both internal and external constraints for the giving and the receiving entities. For example, unionisation level of sites and the resulting limitations regarding changes. • Operations Efficiency & Manufacturing Costs: Financial and efficiency benchmarking of the operating units and optimisation of product allocation. For example, OEE and capacity utilisation assessment, COGS benchmarking and an assessment of the remaining capacity potential of the existing set-up. This also includes makeor-buy decisions and the use of external manufacturing resources. • Strategic Market Factors: An assessment of the impact of the Industrial Footprint on market access, for example the political limitations to sell in a country if there is no local production, and an evaluation of the political/economical stability of a target country to avoid investment risks.
‘A new Footprint can have an impact of 20-40% on the total cost base.’ A new Footprint can deliver real impact A new Footprint can have an impact of 20-40% on the total cost base through: • Cost reduction/network optimisation: realised economies of scale and consolidated network capacity. Improved Supply Chain structure and increased responsiveness to the market, as well as lower total cost of delivery. • Strategic alignment: focus on core business, establish a consistent make-or-buy strategy. Develop core capabilities and know-how via creation of Centres of Excellence. • Improved market access: proximity/appropriate presence in strategic emerging markets as a base to leverage growth opportunities A new Footprint offers significant potential for a step-change in performance, but it does contain risks, so it must be comprehensively designed and thoroughly checked, otherwise the benefits can be consumed by re-work. Is it worth the effort? Absolutely - if you do it right.
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Driving Relationships Celerant clients, former clients & friends of the business share their expertise and experience.
‘I could see the difference. I could even feel the difference.’ T
essenderlo Group knew that its European PVC Profiles Business Unit
was underperforming, so things had to change and fast. It had 3 plants in Belgium and France that were operating with very limited synergy. Albert Vasseur explains how the decision was taken to merge its global strategy to create Profialis, a single banner across all three plants to bring back profitability, change behaviours and improve customer satisfaction.
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What was your situation last year? At that time, our results in continental Europe were so bad that it was clear we could not continue to develop and sell all over Europe, we needed to concentrate on our core market of France and Benelux. It was also clear that improved profitability could not simply come from the traditional tools of cost cutting and capital reduction. We had to change our entire strategy.
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Business Transformation
Now when you say ‘Change the entire strategy’ you have to consider exactly what that implies. It didn’t just mean selling the product in different markets. It meant we had to talk about downsizing, reorganising the business structure, reorganising the product offering. Reorganising the business structure was the biggest problem facing us. It was made up of 3 different companies, sometimes operating in different markets, sometimes in the same market. Success would depend on the ability of these companies to work together and actually merge into one single operation. If we could achieve that, the improvements in financial savings and capital employed would be huge.
How did you move forward and decide to work with Celerant Consulting? I believed our biggest problem would be the human element, putting together people who, although they might not have actually been competing against one another, were not acting together in the market. So it became clear to me that we would need some support to do it. Support because it was complex, support because we had an obligation to improve quickly.
Albert Vasseur, Director, Plastics Converting Business Group, graduated from INSEAD and began his career as a production department head at Courtaulds Fibres, France, rising to become Plant Manager and ultimately President of the Board of Management and a Member of the Executive Committee. He then became Chief Executive Officer of Thermoplastiques CousinTessier, a French subsidiary of Tessenderlo Group. As Director, he has also been a Member of the Management Committee since 2002.
I discussed the problem with a few Consulting firms to see which of them could help us. I knew Celerant from previous experience and one of the things I liked about them was that they operated an analysis phase before entering into a project. We decided to ask Celerant to do a first analysis phase and when they produced their conclusion, we shared it with the business management. We were all impressed with their targets in terms of savings and capital reduction and by the timing they put forward. There was not much debate. We all said OK. We were convinced they could help us. We weren’t sure that we would achieve everything they said, but at least the approach they were putting forward was in line with what we believed.
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Driving Relationships Celerant clients, former clients & friends of the business share their expertise and experience.
That decision was made with the top management. The problem then was to convince the rest of the management. Convince is probably not the right word. We had to communicate the decision and make sure we got their involvement and motivation with the project. Naturally, people weren’t that happy at first.
When did you first notice the cultural change that was being implemented? For me this was the most critical point. The savings, the product offer adjustment, I always felt that could work. But I felt the human factor could fail. That’s why I was present at all the milestone meetings and all the management meetings throughout the process - just to see how that sort of thing was evolving. And I could really see in meeting after meeting that things were changing. Even the way people were talking to each other. Not only in formal meetings, but also in the working dinners that the new CEO of Profialis was organising. It’s not easy for people who have been working independently, managing one business, to suddenly be told that this is not so important now. What’s important is the total business. So that’s what really worked. Bit by bit I could see the changes. I could see the difference. I could even feel the difference. It was apparent within the first 6 months and on other projects I’ve been involved in it would have been over a year or something like that. After 6 months we were clearly one team. I know that the way Celerant built the working groups helped, but I also know that our own management was doing everything possible to make sure that people worked together. When you think about it, they worked together and literally killed some of their own products and replaced them the products of the other company to make a global offering. They accepted one name and one communication image. A year ago I would not have believed that was possible. That’s the
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‘Trust your people and you will get a good return, an unexpected return.’ biggest change and the biggest success. The sustainability of what Celerant built with the management, tools and processes.
What would you say makes Celerant Consulting different? It’s not that Celerant uses different tools or is different in terms of structure, but there is a specificity in approach and a difference in the way of doing things. In terms of process, the good thing is that Celerant work with a pre-analysis, so when they enter into the actual work they already know the organisation and the targets have been set. The other good thing is that they commit themselves to the success of the project with part of their remuneration based on achievement. At the end of the day, I think what really makes Celerant different is the way its Consultants behave with the people in the organisation. They showed us the way and supported us. They were sitting next to our people, not just looking over their shoulder, but sitting with them and being on the shop floor with them shop floor being both production and
administrative work - during the day, during the night, during the weekend. Not only teaching and coaching with their Closework® approach, but working hard together. What makes Celerant different is that they not only teach, they do. That convinced people that my choice was a good one.
What would be your key learnings? The first learning is that if you push people hard and clearly explain your goals, you can get a lot out of them. More than you first think and more than they themselves think. The other thing is that even people who have been working in a different way for ages can change. The management team of today is almost entirely made up of people who were working in the old businesses. None of them would have believed they could get where they are. It was very challenging and very intense, but if you clearly explain what the aim is, they can do it. Trust your people and you will get a good return, an unexpected return. As for the key learning about Celerant, they delivered what they promised.
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Driving Change Change is the constant, the signal for rebirth, the egg of the phoenix.
Celerant Consulting’s unique Closework® approach means that
91 %
of clients say they would like to work with us again.* *Insead Global Survey.
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Driving News Examining global issues in global publications.
‘In Qatar we’re dealing with up to 30 different nationalities in one company. We’re very good at that. We have 44 in our own.’ elerant Consulting is ranked among the World’s Top 5 Best Positioned OM consulting firms in Change Management. It has offices in 11 different countries, including the newest in Abu Dhabi, and has been in ME since 2001.
down on the ground to drive results up and we work with major corporations around the world. A large part of our business is made up of companies in the energy sector, and this is one of the reasons we’ve identified Qatar as a major market.’
Operations Manager Barry Samria has been working on and off in Doha for the past year and is expecting a major expansion in the company’s activities in Qatar in 2011.
Energy is not their only area of expertise however, as they also specialise in training and developing human potential - something they know is of high importance here as the government works towards nurturing a knowledge-based economy.
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‘Celerant Consulting focuses on transferring an organisation’s strategy into reality. We get
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Having seen the progress that Qatar has made and
is continuing to make, Celerant saw an opportunity that matches their growth ambitions. Samria also praised Qatarisation efforts throughout the country. ‘What’s been achieved is very impressive, but I believe that rather than organisations simply following quantitative targets, more qualitative measures need to be introduced.’ Samria added that what he has seen of companies here shows an understanding of the expatriate labour force and efforts to improve integration and working conditions. The need to integrate
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different nationalities is one of the biggest challenges of operating as an organisation in Qatar. ‘In Qatar we are dealing with up to 30 different nationalities and cultures in one company and this is the major challenge of working here. We very good at that because we have 44 different nationalities in our own company. So when we implement Change Management programmes, we can help everyone understand the changes they’re experiencing and show them how to achieve their goals.’ Samria also argued that another major consid-
eration for companies nowadays is environmental awareness and that this is true for regional business as well. ‘It’s on every CEO’s agenda now - that’s for sure. The BP oil spill crisis in the Gulf of Mexico will have far-reaching consequences in this part of the world. It inevitably has to affect the way organisations work and we’ve already spoken to companies who are assessing their current management processes and how they work with their contractors. That will be key for Qatar companies and other companies in the region as well.’
Barry Samria, Operations Manager at Celerant Consulting UAE, recently spoke to Gulf Times about the company’s ambitious plans for Qatar and the wider region.
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Driving Performance We must learn to be equally good at what is short and sharp, as what is long and tough.
Excellence All Down The Line
Quality Rises To The Top
BUSINESS CHALLENGE With operations in 40 countries, the client is a global leader in aggregates and a prominent player in cement, concrete and other downstream activities. It faced difficult market conditions due to the global downturn, fierce competition and integrating past acquisitions. Logistics costs and performance had also been an issue and optimised performance had been compromised through substantial IT challenges, leading to decreased customer satisfaction. To counter this, the company launched a comprehensive Change Programme focused on protecting market share, controlling costs and cash, and increasing competence management. To drive Cost Leadership and Operational Excellence in the Logistics Service, Celerant Consulting was appointed to partner the company’s operations in a major European country.
BUSINESS CHALLENGE Today’s cost conscious consumers demand bargains every time they visit a grocery store, so the client, a leading N. American Milk Marketing Cooperative, needed to improve performance. It manufactures cheese and butter to meet demand, but the raw materials are commodities, so it needed to add value at a profitable rate. Celerant Consulting was brought in to help improve performance and upgrade management techniques and leadership priorities, using the Closework® approach to deliver real Behavioural Change in the key plant leadership.
CELERANT SOLUTION Celerant’s experts designed and implemented a 4 Step Logistics Optimisation Programme: Step 1 focused on reducing the logistics costs at the company’s Cement Operations (3 production sites and Headquarters) by optimising logistics processes and increasing truck loading efficiency. Step 2 implemented a transparent, efficient and customer focused Order-to-Delivery process and management system. Step 3 focused on increasing transparency on logistics performance in the organisation and Step 4 on upgrading people competencies and organisational efficiency. RESULTS A reduction in logistics costs of approximately 10%. •An efficient and customer focused Order-to-Delivery process and a robust management system have now been installed. •The organisation is now decentralised, with full ownership of the end-to-end process. •Customer satisfaction has increased. ‘I am very satisfied with the results Celerant has achieved and the progress the team has made.’ General Manager.
Construction
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CELERANT SOLUTION Working closely with the client team, Celerant Consulting identified and prioritised issues, determined root cause and implemented solutions using Celerant tools and methodologies. Heavy emphasis was placed on Celerant’s MCRS® Management System and Root Cause problem escalation processes. Celerant’s experts also used the Closework® approach to provide side-by-side coaching and reinforcement. This produced a great working relationship with the people on the floor who were used to develop Single Point Lessons that took best practices and shared them from operator to operator and shift to shift. The programme was also designed to specifically develop the organisation’s ability to enable future waves of performance improvements, so a solid Programme Office was created and trained to run further projects. RESULTS With good raw material supply, the client’s plants now operate at record production levels, with greatly reduced overtime and a smaller headcount. •Front line supervisors actively manage their teams and focus on problem solving, rather than fire fighting. •New teams are being formed in both plants to tackle new issues, with the tools and skills learned in the project. ‘People think they can do this by themselves, but Celerant brings the intensity and focus that makes you think about improvements every day.’ Team Member.
FMCG
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3 Years Work In 28 Weeks
Big Savings In Finance
BUSINESS CHALLENGE The client is a world leader in ingredients for the food and pet food industries. To stay competitive and satisfy new shareholders, its ambition was to double EBIT in 3 years by increasing OEE and reducing non-quality, stocks and maintenance costs.
BUSINESS CHALLENGE The client is a major European insurance services company, primarily offering claims, life insurance, pension, savings and mortgage products. The sector had come under intense pressure due to the global financial crisis. Clients were and are more demanding, legislation and supervision had become stricter and cost levels needed to be dramatically reduced. To cope with these new market conditions, the company needed to transform itself into a lean operation, offering real value for money. It also concluded that to become THE lean insurance company, people would have to become more customer focused and look at how to continuously improve themselves. Celerant Consulting was brought in to help because of this focus on Behavioural Change and its committment to delivering it.
CELERANT SOLUTION The company’s new CEO had previously worked with Celerant Consulting and was particularly impressed with its Closework® approach and impact. Real behavioural change would be critical to the future, so Celerant was asked to drive a 28 week project. After a detailed analysis, Celerant defined 3 major workstreams: •Increase throughput by introducing customised LEAN manufacturing techniques. •Reduce maintenance costs. through better handling of the GMAO. •Reduce stocks. All activities were linked by a new robust MCRS® Management System and efficient operational indicators. Celerant's teams also used Closework® approach to help the workforce facilitate these improvements, because the most effective way to reduce waste in a process is to engage the people who are closest to the process and therefore best able to see the waste. RESULTS All stretch targets were achieved on time. •OEE was reduced from 50% to 75% on major areas, •Non-quality was reduced by 50%. •Stocks reduced by 30% and maintenance costs by 20%. ‘I was impressed with the results and speed of implementation.’ COO. ‘Results are visible and sustainable. We would have spent 3 years if we had decided to do it on our own.’ Plant Director.
CELERANT SOLUTION Based on a thorough analysis of the company, the Celerant - Client team defined 6 major themes for the programme: Mapping ‘The Voice of the Customer’ and designing and implementing a structural VOC process; Aligning the end-to-end processes to fit VOC demand; Managing the interfaces within these end-to-end processes (ICT,Finance); Implementing a robust MCRS® Management System to enable Performance Management and Continuous Improvement; Developing the Leadership to steer the change and implementing programme management for future programmes and projects. The team then created 7 specific workstreams to cover the programme themes: Life Insurance, Banking and Mortgages, Non-life Insurance, Marketing & Sales, Staff, IT, the Programme Management Office, and Leadership and Behaviour. To support their implementation, Celerant’s experts used the Closework® approach to help the client taskforce facilitate real changes within the organisation, thereby creating a self-sufficient change capability. RESULTS The programme’s success was determined by 4 key factors: Milestone realisation, Financial performance, Behavioural Change and The Voice of the Customer (SIS). •The programme milestones and SIS were delivered on time, in full. •Cost reductions and margin benefits of over €10m were achieved, above plan as well as the extra sales target. •A culture of Continuous Improvement has been embedded, led by a client taskforce of over 30 people. •Customer satisfaction has risen significantly, from 10th place to 2nd for Life and 12th place to 3rd for claims.
Manufacturing
Financial Services
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Driving Results All thoughts must be distilled into action and action that brings results.
Wall to wall improvements at the UK’s largest homebuilder. The UK’s housing market was one of the hardest hit in the economic downturn, with homes discounted up to 40%. To remain competitive, Barratt Developments quickly reduced Site and Divisional Office headcount and brought in Celerant Consulting to help design and implement a ‘Quality & Cost’ Improvement Programme.
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arratt Developments is one of the UK’s largest homebuilders and consists of Barratt Homes (traditional homebuilder), David Wilson Homes (larger family homes), Ward Homes (operating in Kent and SE England) and Wilson Bowden (commercial and mixed use property). It directly employs 5,200 people across 26 UK Divisions and most site work is subcontracted.
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The sharp downturn in the UK’s housing market had dramatically reduced profits, so costs had to be cut, without affecting quality or customer service. Barratt has a overriding culture of customer satisfaction and provides a 5 year warranty on new homes, so Celerant Consulting immediately focused on helping the company to get everything ‘Right First Time’ - whether
that involved building new homes or correcting any defects during the 5 year warranty. Laying the right foundations for the future After site walking tours to perform a root cause analysis of construction and correction failures and a detailed analysis of all the processes involved, Celerant's experts designed and implemented: • A comprehensive MCRS® Management System with a balanced focus on time, cost and quality metrics, to drive accountabilities for performance down to the right level. • A Closework® approach to active site management to eliminate construction and correction failures. • A leaner process of Customer Service contact after move-in. • A leaner Customer Service organisation, better suited to future reduced work volume,
was also identified and managers were given extensive coaching on how to develop and performance manage their people.
STRONG RESULTS FROM FLOOR TO CEILING • A 35% reduction in remedial work during construction, with a 25% reduction in remedial material costs. • A 40% reduction in customer service costs after move-in. • Working alongside the client, Celerant also identified a 25% reduction in the Customer Service organisation, delivered annualised benefits of £12.06m (with £10.86m agreed on) and identified £5.8m in further savings.
‘ Q&C is the most successful project ever rolled out by the Group. It’s the first project to improve quality and at the same time reduce costs.’ Tom Proctor, Construction Director, Barratt North East.
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Driving Relationships Celerant clients, former clients & friends of the business share their expertise and experience.
M
ogens Granborg has held significant positions in Danish companies until he
retired after 20 years on the Executive Board of Danisco. Now, amongst other things, he is serving as Chairman of the Board of Directors at DSB, the Danish Rail company.
‘Can Danish companies play in the big league? For sure - if they foster people who burn for productivity, burn for efficiency and think about it around the clock.’
The Danish Prime Minister has addressed competitiveness as a cornerstone in securing Denmark’s international position. What do you think are the keys to increasing it? Three things: identify cost structures, identify complexity and identify competition. I myself would probably do them in reverse ranking. First of all, identify competition, then complexity and then cost, because cost is a result of the other two. The way forward always depends on your competitive situation, but one thing I passionately believe is that every company must involve its employees more. It must allow employees to speak up and not be filtered by middle management; otherwise it misses out on so much production knowledge. My experience from all the companies I’ve worked in is that there’s a lot of knowhow in the unskilled and skilled labour force and a real willingness to be more efficient. So there’s a lot of resource that you can benefit from. They know where ‘the shoe is too small’, if I can use that expression. They know when a company is not efficient and when it has too much waste in its production. So involving your employees is vital to really understanding the specific challenges for your company and identifying the specific ways you can increase productivity.
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Global Competition
The head of runway maintenance at Copenhagen airport woke up in the middle of the night and said: ‘I’ve found a solution to all the snow that keeps blowing across the runways and closing them.’ Now that’s what I call burning for efficiency.
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Driving Relationships Celerant clients, former clients & friends of the business share their expertise and experience.
Another useful exercise is to ask ‘What would we do if we were to start this production from scratch? How would we organise it?’ This will often give you many answers as to how you can improve your current production. You also have to ensure that you have the right people who can analyse the current situation. For years now, senior management are people with a commercial or an economics background. In the old days, people with technical backgrounds more predominant. My predecessor in Danisco was an engineer and he knew everything about the productivity and processes in the factories. He was absolutely dedicated to this. So much so that he was known to run around checking things with his shirt hanging outside his trousers - even at the age of 65. I think companies today need to foster people like that who burn for productivity, who burn for efficiency and who think about it around the clock. This is perhaps one of the problems we’re facing. The usual battle between the CMO and COO will always exits, but companies need to listen more closely to people who really understand production.
Can real productivity increases ever take place without job losses? One of the worst things we’ve seen in this financial crisis has been major job losses. If demand disappears then of course you need to really cut back on your work force. But it’s important that you have a long term plan in place for such situation. Going back to my own experience, you need to have this issue at the top of the agenda in every employee meeting, at every factory floor meeting - and that brings us to the role of middle management. Middle management is often asked to inform about things decided by senior management.
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At times of crisis or difficult decisions senior management must show their presence and communicate with the organisation. If not we risk misalignment as middle management probably was not involved in any of the strategic discussions, so he/she will have a clouded vision as to the background or consequences of enforcing and implementing decisions. This can cause real problems with the work force. So if you want to avoid major redundancies, productivity has to be the No.1 or No.2 issue in all strategy meetings on the floor. If you do that, I’m sure that you can convince most people in most companies of the need to increase efficiency or reduce cost by 1% or 2% every year. I often hear employees saying ‘Yes, we can cut down if we have to, but it means we’ll have to do things differently.’ This is one area where management simply doesn't listen enough to employees at the lower level. You can never avoid major redundancies when a market or a product collapses. Of course you’ll need to close a car factory or a manufacturing site or whatever. But when it comes to deciding which site you’re going to close, it’s imperative that the whole organisation understands why that particular site was chosen. So having internal bench marks, having internal competition, and making sure that all employees understand the challenges facing the company is absolutely paramount.
How do you maintain a focus on innovation in an environment that aims for overall effectiveness? Denmark is known for being innovative, that’s for sure. Being innovative in new products, in new applications, new packaging, new services, but having people whose only task is to be more efficient in production is just as important for long term success.
Companies have to ask themselves whether they have people that really burn for efficiency, productivity and reducing complexity. Do they have people that wake up in the middle of the night thinking about all this? Let me give you an example of what I mean. It’s a very simple one. Around Christmas time the head of runway maintenance at Copenhagen Airport woke up in the middle of the night and said ‘I’ve found a solution to all the snow that keeps blowing across the runways and closing them.’ So he got the fire brigade to spray water on all the snow piles next to the runways. That froze the snow so it couldn’t blow around and the runways were kept open. Now that’s what I call burning for efficiency. Not so long ago, every major company had a production process department in connection to production. Its primary task was to develop the processes, ensure efficiency and ensure that they used the machinery in the best possible way and so forth. I think we need to re-introduce innovation in productivity and efficiency by having people dedicated to this.
DSB is performing well.What lessons can Danish business learn from your success? Rail is a very different business, but one thing our management has been doing with great success is motivating employees. Our CEO has been out several times on road shows in the course of 2010, engaging our workforce, motivating them, empowering them, getting them to understand the services we need to offer. So again it comes back to my theme that everything revolves around your employees. It’s back to my initial statement that if you don’t have the employees on board, then forget it, you will never succeed.
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Driving Change Change is the constant, the signal for rebirth, the egg of the phoenix.
Celerant Consulting’s unique CloseworkŽ approach means * that in a world where 75% of Change initiatives fail
95 %
of our Programmes succeed. *The Economist Intelligence Unit global survey in 2009.
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Driving Talent Success always demands a greater effort.
COMPLEXITY: Managed with skill and foresight it can create real competitive advantage. Companies have two options in today’s complex environment, says Doug Newman, Senior Vice President at Celerant Consulting Americas. They can scramble to change strategy on every new development, or accept that some complexity is unavoidable - and some is even desirable. aking smart decisions about what to seize and what to embrace can be the difference between taking a lead position and losing a handle on long term success. One prime example is Honda’s investigation into alternative fuel usage at a prospective UK power plant. Factoring in predictions of country-wide electricity shortages that could limit industrial power, regulatory pressure on carbon emissions and an auto industry turned on its head, the company carefully chose which elements of complexity to roll with and which to tackle head on.
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Its most innovative move, according to the Wall Street Journal1, is an effort to supplement traditional power sources with miscanthus grass. ‘The company has offered farmers 15year growing contracts and could eventually require between 5,000 and 15,000 hectares of farmland. Honda officials say a miscanthusfueled power station, along with wind turbines and the use of solar panels could, in theory, satisfy all its factory’s electricity needs.’ Now that’s managing complexity to create a real competitive advantage. Internal agility to navigate external developments Forward thinking leaders worldwide recognise that by reducing operational complexity to maximise existing strengths, they can create a company agile enough to navigate externally propelled market developments. Food sellers are seeing such difficulties by the barrel. Kraft is no stranger to this. The company has high visibility due to its dominating presence in so many markets, but along with that comes
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exposure to cross border complexities. ‘We’re concerned about potential new government regulations that may expand the use of corn ethanol.’ CEO Irene Rosenthal told Forbes magazine2. ‘These proposals may displace a small amount of foreign oil, but create unintended consequences, including higher food prices, both for consumers and manufacturers.’ The Wall Street Journal3 also touched on the outside factors impacting food prices: ‘Costs are being driven by growing demand for meat in China, India and other emerging markets. That’s driven up grain prices, which in turn boost the cost of chicken, steak, bread and pasta.’ These complexities hit every point in the supply chain and beg the question for the food industry: where can complexity throughout the organisation and supply chain be managed to yield an advantage instead of a pain point? Knowing where to focus energy and where to let the market play its hand takes discipline, foresight, and a keen grasp on how to steer an adaptable organisation. Executives should guide their operational strategy using 4 keys to complexity: 1. Accept unmanageable complexity Not everything is part of the business plan, a point driven home by the obstacles faced by the industries above. The question for CEOs is when to challenge the market on its own terms, and when to look inward to determine how to best adapt? Which course of action will lead to the most competitive advantage? To stay ahead of the storm, businesses must align their internal
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systems and processes to meet the demands of external complexities while remaining profitable. At the same time, these processes must be designed to assist executives in making one decision over another, and then to gauge the success of that decision after the fact.
found that across most major industries, as much as half of the time employees are at work is spent on non-value-adding activities (NVA). Much of this NVA time is impactable, and it should be redirected towards activities that have a positive impact on the bottom line.
This is one of the most critical elements of managing complexity - without a clear view that aids decision making, there’s no way to make a real determination of which path leads to the desired result. When considering external developments or internal strategy, leaders should develop a full understanding of their business' end-to-end processes, which will provide a picture of where complexity can be simplified or even eliminated.
4. Changes in behaviour from people, processes and systems bring lasting results A culture of creativity, innovation, and databased decision making must be fostered all through the management ranks. A crucial element in managing complexity is ensuring that those ranks are well organised and working towards the same goal. Each employee should have at most a few items of concern, and each with supervisory duties should have only a few direct reports beneath him. Every employee should also know where they fit in the structure and how their actions affect the company as a whole.
2. Create a nimble organisation to manage Internal Complexity With visibility in place, choosing which organisational complexities to focus on becomes an exciting exercise. Leaders can combine their understanding of outward facing issues with internal capabilities, allowing them to position people, processes and systems in such a way as to capture the benefits and avoid the pitfalls. For example, CEOs and their teams will see when market movements are changing customer preferences. The organisation may not be able to impact that change, but it can make a firm stand on which segment it sells to. Making an adjustment means tweaking operations throughout the supply chain, product development, and marketing channels. Not an easy task, unless the organisation is already primed to make quick adjustments. That means being tuned into suppliers, vendors, and of course each area of internal operations. 3. Get the most value out of operations Navigating through this complexity requires a different way of thinking, acting, and organising than the typical control mentality. Passion and emotion should be removed from the equation, and each choice should be guided by what the data indicates is the best option. Choosing several key performance indicators as metrics is absolutely necessary, and care should be taken that enough KPIs are leading, and not lagging, indicators. An executive should be focused on looking through the windshield not in the rear view mirror. One key metric is the amount of time employees spend on activities that add value to the final product or service. A recent Celerant study4
Embedded in this organisational framework must be a clearly distributed system of responsibilities and accountability that is understood by all. When variance occurs, a CEO should be able to easily follow the path - to the individual operator if necessary - to find the cause. When the pain point is identified, the responsible employee should be held accountable in a manner that both improves their future work and advances the company. Jumping a plateau Maintaining a focus on people, systems, and processes can bring about enduring changes in behaviour that vault a business to new levels of productivity. In turn, new revenues and decreases in expenses, combined with measurable successes on the human and operational levels, can yield increased and sustainable profitability.
‘Without a clear view that aids decision making, there’s no way to determine which path leads to the desired result.’
Honda’s pursuit of alternative fuel taps an inventive solution, but keeps the management of the solution close to home by enlisting farmers near its planned power plant. Creative leaders can take such difficult situations and, by leveraging a nimble organisation, generate momentum in a direction that rides the wave of unmanageable complexity, accelerates growth, and enables the company to jump a plateau. 1 Honda Looks to Grass to Resolve Its Power Needs: Michael Weir, Wall Street Journal, November 8, 2010 2 Kraft’s CEO Clears The Air About Cadbury And Buffett: Alexandra Zendrian, Forbes.com, October 28, 2010 3 Food Sellers Grit Teeth, Raise Prices: Julie Jargon and Ilan Brat, Wall Street Journal, November 4, 2010 4 Saved Time, Saved Value: Impacting Employee Contributions Across the Organisation. Celerant Consulting, 2010
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Driving News Examining global issues in global publications.
The buck starts here. Celerant Consulting has commissioned a series of reports in partnership with The Economist Intelligence Unit on the challenges facing business today. The latest is: Leaders of Change: Companies prepare for a stronger future.
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Economist Intelligence Unit he focus of Change Management has shifted according to a recent survey of 288 senior executives from Europe, North America and Latin America by Celerant Consulting in partnership with the Economist Intelligence Unit.
just 3.6 change initiatives annually. Competitors will be looking at other areas than just cost cutting, including trying to grab some of your market share. So aligning the focus of change with the most pressing strategic priorities has become more important than before.
Companies remain cost conscious, but they’re now putting much more emphasis on growing market share and preparing for the future. They’re also devoting increased attention to their Sales & Marketing functions. This reflects a shift in emphasis away from cost cutting and towards growth and the future.
Consider whether your sales function needs an overhaul, or you need to address an overarching company-wide issue The most popular area for change programmes over the past year has been Sales/Marketing. Other businesses, meanwhile, are making a strategic choice to look at company-wide change such as complexity reduction. The key consideration is where change will best prepare the firm for the new competitive environment being shaped by the multispeed global recovery.
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Executives are leaving the preoccupations of surviving the downturn behind, yet all too often companies are still unable to execute change. Now more than ever, that responsibility lies with their leaders. REPORT CONCLUSION The global economy is always evolving and companies need to adjust. Businesses however are simply not that good at change, failing nearly half the time. As this study shows, getting the most out of change initiatives requires going beyond the basics of leadership commitment, good planning and communication. The following principles emerge: Treat Change Programmes as a key, but limited strategic resource There are limits to how much change a company can absorb - on average survey companies make
use them as change champions. Leadership is not about telling people what to do, but getting them to do it. If more senior employees are the problem, then leadership is dysfunctional and needs to address its conflicts quickly. ‘It’s very different to lead people to engage in innovation, than encourage people to find efficiencies’ says Professor Rosabeth Kanter from Harvard Business School Such leadership will be essential as business prepares itself for the future. The full report is available on www.celerantconsulting.com or www.eiu.com
Sweat the details The broad principles of change management may vary little, but the details will in ways that matter. As executives opt for new goals and locations for change programmes, they will need to understand the resulting specific requirements of success. These will likely differ from the requirements of changes in the depths of the downturn. Cutting costs, encouraging growth and promoting sustainability need distinct play books. Treat bottlenecks as a symptom, not a disease If middle management is a difficult bottleneck to change, then leadership needs to improve. Bring middle managers into the change process earlier, have them work on the planning, and
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Driving Relationships Celerant clients, former clients & friends of the business share their expertise and experience.
‘Change has been beneficial, but not fast enough.’ A
fter decades of stability that allowed France to become a leading nation
in rail transport, deregulation has
Jacques Gounon began his career with France’s Ministry of Infrastructure. After covering the City of Paris, the creation of a maintenance company and Eiffage, he joined the Ministry of Labour as a Ministerial Advisor. He then became a Private Secretary to the State Secretariat for Transport. From 1996 to 2000 he was Chairman France of Alstom and he followed that by becoming ViceChairman & Chief Executive of CEGELEC. In 2005 he was appointed Chairman & Chief Executive of Eurotunnel and in 2009 received the Revelation of the Year Award at the BFM Awards.
begun with the creation of Réseau Ferré de France, the launch of transformation projects by the major players and the arrival of tough, new competitors. Jacques Gounon, Chairman and Chief Executive of Eurotunnel, looks at the challenges this presents for his company.
How do you view the rail sector in France? It’s changed enormously since the mid ‘90s. The deployment of the rail packages and modernisation programmes has had a huge impact on both goods and passenger transport. Deregulation has really prompted incumbent operators to change. That’s what happens when you introduce competition. Guillaume Pepy, Chairman and Chief Executive of SNCF, was first to say that the introduction of competition was an excellent stimulant. So change has been beneficial, but not fast enough. The rail sector is a very constrained world, even conservative in some organisations. So having a strictly administrative vision can hinder the development of the whole sector - including the arrival of new entrants. But many players are now changing to counter this inheritance. Here I must pay particular tribute to the creation of Opérateurs Ferroviaires de Proximité - or
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Local Rail Operators. Their flexibility and an innovative approach based on staff versatility means they’re one step ahead. They are really meeting the expectations of everyone who is concerned about the decline of rail transport compared to road transport. When we talk about administrative constraint, it shouldn't be confused with safety, which is of course, a core concern. Eurotunnel is the busiest line in the world and it's located 40 metres below sea level, so safety is our absolute priority. Having said that, shortly after the start-up of our first rail freight subsidiary, Europorte 2, we were scrutinised by the regulators as though we’d never even driven a train. So we sometimes wonder whether too many controls might hinder the sector’s development, without really making a tangible contribution towards improving safety. I’m convinced that rail freight is a sector that can only get bigger and better in the future. Proof of that is the aggressive competition waged by SNCF Geodis and ECR and interna-
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Deregulation
tional competitors such as B Cargo and CFL. n the freight sector, road and rail complement one another to a certain extent, particularly over short distances. In European freight corridors, suitable infrastructures must be put in place and new freight-dedicated lines opened. You can see exactly why when you look at the saturated Lyon transport slot, for example. It creates real
make planning decisions. In France, we must advocate these lines. Let’s follow the example of our neighbours, who have deployed effective freight aid policies: In Germany through aid for the creation of industrial branch lines, and in Great Britain where the freight market is showing an annual growth of 4%, through substantial aid for mixed transport.
You have one foot on either side of the Channel. What are the differences between the two rail systems? The fundamental difference relates to geography.
‘ Developing rail freight should be a major priority for Europe. The question is whether there’s a common political will, with strong involvement and financing from every state?’
bottlenecks and this restricts any possibility of expansion for the entire sector.
Will development involve a European-scale policy?
What are the major challenges for Eurotunnel?
Yes, European rail traffic has tremendous potential and creating rail corridors would help increase traffic and promote a genuine European rail freight network. Transport would then be more efficient in terms of journey times and capacity. The problem is that there’s a real lack of ambition regarding rail freight in Europe. Up until now, every country has had its own technology, related to its geography and history. So it would be good to standardise the system, particularly with regard to regulations.
As I said, Eurotunnel is the busiest rail line in the world. In just over 15 years, we have transported 250 million passengers and 50 million vehicles - including 15 million heavy goods vehicles. What’s our next challenge? We have an ambitious strategy in both rail operations and infrastructure management, so we want to increase traffic between mainland Europe and Great Britain. We also want to grow our freight traffic by increasing the number of freight trains and piggybacking over long distances to reduce pollution and relieve motorway congestion. Great Britain is certain of the future of rail. There is real public will to back freight, but we must go beyond that declaration of will and
Developing rail freight should be a major priority for Europe. All the players recognise this in principle and an infrastructure identification programme has been launched. The real question is whether or not there’s a common political will, with strong involvement and financing from every state? This has to be a task for the European Commission.
In Great Britain, transport works on a northsouth basis, while in France it’s more difficult to establish direct links because of the hexagonal topography of the country. So you get a more complicated system. In addition, Great Britain has always made great use of its ports, while France has favoured its very efficient road network. Politically, the British are aware of the challenges of expanding rail freight and as a binational group, we’re also aware of this at Eurotunnel. That’s why we bought the French operations of Veolia Cargo, now rechristened Europorte. It gives us much greater strike power in the French rail freight market. Last year in Great Britain, we also acquired GBRF, so our French and British business activities are highly complementary.
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Driving Talent Success always demands a greater effort.
EUROPE’S ELECTRIC & GAS UTILITIES:
The game’s changed. The competition’s changed. And there’s no extra time.
‘Customers everywhere have growing demands and expect optimum reliability from their network.’
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In just a few years, Europe’s Electric & Gas Utilities sector has changed dramatically, says Henri-Paul Missioux, Vice President - Head of Operations France. The name of the game now is Operational Excellence and only those companies that raise theirs will be able to match customer demands. he opening up of Europe’s energy market has transformed every organisation in the sector. Incumbent players have split their business activities, separating transmission and distribution networks which are public services, from their production and sales operations, which are open to contracts and competition. Producers are expanding alongside new business lines and launching investment programmes to diversify their offer - and new players, including many suppliers, have entered the market, forcing network managers to rescale and update their infrastructures.
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The creation of a single energy market has also accelerated with greater European-level production coordination and ever-rising consumption. For operators, this means building new network and interconnection capacities, so substantial investment programmes must be absorbed, teams sometimes reduced and an in-house outsourcing balance deployed. Alongside all this, renewable energy sources such as wind, solar and biomass are gaining momentum. A key feature of these new energy sources however, is that their production is decentralised and for the most part, intermittent. So to support their growth, network managers must develop further infrastructure in the often isolated areas where they are located and control energy flows ever more precisely. These multiple challenges have created a far more complex sector and some companies are struggling to adapt. Move from a technological culture to a customer culture In this new market, customers everywhere have growing demands and expect optimum reliability from their network. Network managers have to be able to commit to continuity of supply, so a greater knowledge of incoming energy and outgoing consumption is essential, together with a greater responsiveness in the event of accidents.
The only way forward is through Operational Excellence - controlling costs, optimising investments, adapting the organisation, etc while maintaining profitability, customer service and safety levels. In short, incumbent players must make a profound cultural shift from an essentially technological culture to a customer satisfaction-oriented culture. In this context, processes excellence is a major challenge, so internal teams have to be trained in value optimisation methods such as LEAN, Six Sigma and Value Stream Mapping (VSM). Applying these methods will help increase both the speed and quality of information available, create efficient interfaces to ensure the optimum management of energy flows and meet customer demand at all times Boost performance and change cultures Process excellence must be supported by highly effective Performance Management. Operators must define indicators that are reliable and suited to their needs. The frequency of forecasts, for example, must be calibrated according to the reaction time that the operator can allow, In the near future, smart grids will be a valuable performance management tool because accurate energy production and consumption data will be transmitted in real time, optimising the coordination of network flows. Capital intensive production units and distribution networks must make greater use of their means by boosting production capacity at the lowest cost. New stakeholder demands and new company boundaries mean that performance measures must be redefined. An upcoming company’s vision must include indicators and scorecards that cover the most operational levels. Success in implementing such practices in daily business engenders a profound change in the company’s culture.
Motivate your people to maximise your progress Every organisation in the utilities sector has to adapt its operation, often quite radically. This means moving from a business-based management culture to a cross-cutting management culture; from a culture of committees to a culture of effective meetings; from a technology-based management culture to a performance-based management culture. Separating previously integrated business activities has led to a trend for specialisation and this can have its downside. In the past, it was possible for a member of staff in the distribution network to move from network maintenance to customer management or marketing. Now, that employee can only manage networks, which may be seen as a step backward by some. So the managerial challenge is to give staff motivation - and smart grid projects may be a real opportunity. Utilities companies are generally very precise and specialised, so transferring the knowledge and know-how of senior generations in parallel with the recruitment of young people and external profiles is another genuine challenge. To ensure this transfer, it’s necessary to identify these experts, who are repositories of irreplaceable knowledge capital, and then offload some of their everyday tasks so that they can help prepare, train and support new recruits throughout their orientation. Companies must also make greater use of local managers. They are an essential pillar in creating the link between the strategy that management has defined and the teams in the field. The way forward is clear and the support is here.
Philippe Jaspart, Nicolas Pinglot and Julien Tanneveau from Celerant Consulting also contributed to this Thought Leadership.
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Driving Performance We must learn to be equally good at what is short and sharp, as what is long and tough.
Negotiation Smoothes Integration
Tasty Results. Sweet Success.
BUSINESS CHALLENGE The client, a multinational manufacturing company, wanted to reduce local subsidiaries by 40% in 3 years. Celerant Consulting was engaged to perform a feasibility study for integrating a major subsidiary, defining the business case, examining the potential merger modalities and creating a detailed integration plan. The study’s main focus was the integration of the 10 support functions.
BUSINESS CHALLENGE The client, a global leader in the confectionary market, had invested heavily in its Supply Chain network and was now determined to create a strong Continuous Improvement capability - a team of change agents armed with the skills and tools to drive change across the network. This would require a fundamentally new way of working, with Operations Excellence embedded at the heart of its Supply Chain System. Celerant Consulting was chosen to partner the programme because it demonstrated a clear understanding of how the company could achieve its goals, a highly collaborative approach, and proven techniques for changing shop floor behaviours.
CELERANT SOLUTION Celerant created 11 workstreams that covered the Strategy, Governance, Communication, Legal, HR and IT aspects of integrating the support functions. Each workstream was lead by a Celerant-Client operational leader, with Celerant ensuring objectivity and fact based decision making through robust and validated data and workshops with members of both companies. Any disagreements that could not be resolved at workstream level were escalated to the Board for a final decision. The pros and cons of different integration scenarios were studied, particularly from a financial and HR point of view, and submitted to the Regional Board for approval. Once a final scenario was agreed, Celerant led the definition of detailed transition plans, including supporting HR and preparing consultation with the unions. The client then took the lead to carry out social negotiations and the actual integration. RESULTS Celerant’s feasibility study demonstrated that integration would mean an overall Group benefit through less complexity and less cost, so it was decided to go ahead. •The detailed organisation was agreed on both sides, with the integrated entity benefitting from a clearly defined mission. •Detailed transition plans ensured that no activities or alignment in processes or procedures were overlooked and integration was achieved on time, in full. ‘We engaged Celerant for their objectivity and rigorous approach in leading that difficult exercise and facilitating discussions between two entities that did not have the same interests at all. This has been successful, even though painful, and we feel confident that we can continue with the plan.’ Integration Project Manager.
Manufacturing
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CELERANT SOLUTION Celerant’s experts undertook a thorough diagnostic, which also acted as an engagement tool to get people on board with the programme, then installed and embedded a 32 week Change Programme focused on behavioural change at one of the company’s key European sites. This included new production performance tools to increase Organisational effectiveness (OEE) across the plant and stretch operational performance, improved Maintenance efficiency and effectiveness, an integrated planning and maintenance approach and a site-wide performance management framework to maintain the focus on core performance and drive Continuous Improvement on a day to day basis. RESULTS Millions of euros cumulative cashed benefits over the 32 week programme. •Operational excellence improvements included a 10% volume increase on critical lines, Process stability, OEE increase, waste reduction and a 17% changeover compression. •A comprehensive MCRS® Management System has been installed, driving proactive preformance management and making the programme the new way of working. •20 Team Members have been trained in Celerant CI methods. ‘This programme has been great at delivering results in engagement, acceptance and technique. It has developed a group of people who understand the links between programmes, systems and execution - and that 80% of success is through influencing and changing behaviours.’ Manufacturing Manager & Project Team Member.
FMCG
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A Hard Task In A Hard Arena
Innovation Changes Everything
BUSINESS CHALLENGE The client is one of North America’s leading providers of mining, heavy construction, industrial, piling and pipeline services. To win more business, it urgently needed to cut costs and improve operational efficiency. Its internal systems were not delivering the required levels of visibility and accountability in project performance; its maintenance systems, policies and procedures were almost non-existent, resulting in a reactive environment - and an organically grown organisational structure meant that roles and responsibilities were ill-defined. Celerant Consulting was appointed to help re-evaluate the mission and vision of the business and to create an operation that planned, controlled and measured as effectively as it worked.
BUSINESS CHALLENGE The client, a leading supplier of complete lifecycle power solutions, focuses on the marine engine and power plant markets with products, solutions and services. It earns most of its revenues from engine and power plant maintenance services, but after losing market share in marine solutions over 4 years, it identified a clear need to regain leadership in engine products and sales. It also identified Celerant Consulting as the ideal partner to make this happen by replacing a change-resistant mentality with new behaviours and installing a culture of Continuous Improvement and genuine Innovation.
CELERANT SOLUTION Celerant Consulting was asked to design and implement a successful operational transition to support the future demands of increased competition and operation under the scrutiny of being a public company. And do it in a matter of months, in one of the toughest operating environments on the planet. Working in close collaboration with the client taskforce, out in the field and at corporate headquarters, Celerant’s experts helped implement a comprehensive Change Programme designed to put the organisation back on track and lay the foundations for a successful IPO. The initial results were fast and impressive, but the medium and longer term success were equally important. So Celerant implemented a wide ranging sustainability programme to ensure that the newly improved processes, tools and management systems would be the programme’s durable legacy. RESULTS An overall project ROI of 4:1. •Over $30m in annualised cost savings versus a base business case of just over $20m. •A new organisational structure has been created, implemented and fully aligned with the client’s commercial imperatives.
CELERANT SOLUTION The multinational project was primarily designed to deliver Innovation content, so Celerant’s experts used a Voice of the Customer approach to relentlessly focus on customer satisfaction and seek continuous feedback from the organisation. They also improved the project portfolio and resource management processes to ensure that R&D projects were in-line with the product strategy; introduced a comprehensive MCRS® Management System that enabled the 3 Business Units to manage their R&D projects more efficiently; standardised the product development process; introduced LEAN/Six Sigma tools and trained the R&D workforce; implemented successful pilots to demonstrate the impact of these improvements in real R&D projects; developed the plan for the full roll-out in the organisation for 2011. RESULTS SIS targets were 100% achieved. •Plan attainment 94% on end target. •The pilot phase was extended from 4 R&D projects to 10 due to critical mass support from senior management. •100 R&D experts and Project Managers, including a core group of Key Users, have been trained to ensure ownership of the new ways of working. •Real Behavioural Change has taken place and a culture of Continuous Improvement has been installed.
‘What would have taken years, you guys have done in months.’ Project Manager.
Metals & Mining
Energy
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The Cycling Consultant
An idea on the way to work led Dan Harrison to cycle through Africa and use what he’d learnt at Celerant Consulting to make a lasting difference to Charities and NGOs along the way.................
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Have you ever had an idea that changed your whole life?
bout 3 years ago, I had an idea that completely changed my life. It seems odd to call it an epiphany because it happened on the 8.48 train to work. As I glanced out of the carriage window, it struck me like a bolt from the blue. Why not cycle through Africa? All the way from London to Cape Town – and do it to help good causes on the way!
A
Obviously, cycling solo across Africa wasn’t a logical idea. I’d pedalled around London, but I’m not a lycra-loving cyclist. I’d never been to Africa and I had a pretty decent job. So why jack it in? The lack of logic wasn't important, however. I was incredibly excited. I'd dreamt of escaping London to see more of the world now it was time to just do it.
I didn’t even know if it was possible to cycle solo though Africa, but luckily I came across a British guy who’d done it. I was inspired. I made my plan and committed to it. I would save money, raise funds for causes en route and leave the following summer. This is where an understanding boss and a supportive employer made all the difference. With the help of my immediate bosses and support from CEO Ian Clarkson, I began working 4 days a week, using my extra day for planning and fundraising. My loyalty didn’t need to be bought, but I continued on full pay for several months, so it was possible to save the funds I needed. Consultants have a heart after all, or at least ours do. Little by little, with friends and family in support, the idea on the train became a reality.
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The Cycling Consultant
‘It may take me 2 years to reach ‘The darkest thing about Africa has always been our ignorance of it.’ George Kimble. With progress on our charity looking good and a freshly pimped yellow bicycle, I pedalled off towards Africa. I was running a little later than I’d anticipated, about 6 months in fact, which meant I was about to tackle Egypt, Sudan and the Sahara in mid-summer! Luckily my friend Kenny decided to join me for this challenge of questionable judgement.
‘It is never too late to be what you might have been.’ George Eliot. One fine day in July 2009, I set off. It feels like the best career move I’ve ever made. With Celerant’s help, an online fundraising campaign and a Union Jack jockstrap, I’d raised almost £30,000 in one day for the good causes I’d arranged to visit and volunteer for throughout the ride. My epic ride started surprisingly well. After 3 days I passed our office in Brussels. I continued on linking up with friends for sections across Europe. Barring a scrape with the tarmac on a mountain pass in Italy, the first month went without a hitch. Friendly people, beautiful landscapes and incredible food that I had to eat just to keep up the calories. Seeing the world from the bicycle, I was living my dream and savouring every minute. I visited my first project, an orphanage in Albania. Roping in the help of some fellow travellers we set up a new library in 3 days for $400 - a great start.
‘All journeys have secret destinations of which the traveller is unaware.’ Martin Buber. After 4 months, 15 countries, 5,000+km, 5 punctures and 7kgs lighter I reached Damascus in Syria. I expected to stay 5 days and ended up staying 5 months. I met an inspiring group of people changing the lives of the local kids and a refugee camp community through capoeira, a game I love. UNICEF reported the success of the social projects, giving the impetus and credibility to do more. From my experiences setting up the Better Life Cycle and with Celerant, I had the professional skills to help them turn a sporting group into an NGO. Bidna Capoeira is now a registered charity in the UK and we’re about to start our first major project, teaching 480 children in refugee camps in the West Bank. We will use capoeira’s positive, playful energy combining sport and music to develop self-confidence and awareness, discipline and respect for new cultures while the kids play and test themselves. In 5 years our mission is to have 5 sustainable programmes running, teaching over 15,000 kids.
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50oC is pretty darn hot and it seems even hotter when you’re surrounded by desert. Fortunately our crossing of the sea of dunes was regularly interrupted by outstanding kindness from the Sudanese people, whose generosity and hospitality would make even the most benevolent philanthropist blush. Not too many folks I’d spoken to before the trip would have guessed that. In a final push of 1000km in 6 days, consuming up to 20 litres of water a day, we crossed the Sahara. A shower has never felt so divine or so
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South Africa - maybe a lifetime.’ ‘The ladder of success must be set upon something solid before you can start to climb.’ Voltaire.
necessary. As the landscape changed so did the caste of the people; the Arabs of the north mixing with their dark skinned Nubian countrymen from the south and brown gold skin of the Eritreans, Ethiopians, and Somalis to the East. There were lots more children, laughing and screaming. Skinny livestock moseyed along the roadside followed by boys with sticks. Circular mud huts appeared with thatched roofs and open doors. Fires smoked. Towns buzzed. I had arrived somewhere new, not on the map. The Africa of my childhood imagination. We entered Ethiopia with the rainy season. After cycling a few days through stunning mountain roads we arrived in Gondar, a former capital set around a 350 year old castle. Here we visited Yenege Tesfa, a locally run NGO that helps hundreds of orphaned and vulnerable street children. We were instantly impressed by their dedication and transparency of spending. Inspired to help we began building a new website to help with fundraising and our work soon expanded to help organise the operations in the office.
People had come to Yenege Tesfa before, all guns blazing, setting up systems and processes to make things better. The trouble was they didn’t bother to really teach the local folks how to use them, or take their thoughts and experiences into the equation. So they’d left and things went back to how they were. I’m determined not to make the same mistake. We’ve just launched a new project to build homes for 250+ children, allowing them to get off the street and into a happy home with an education. We’ve got our weekly meetings going, some simple processes running and the local staff are starting to take charge. There’s still a way to go, so that’s why I’ll be here a while. Charities like Yenege Tesfa have an obligation to report their results and show value for money. When they do, funding will flow. I now realise that what I learnt during my time at Celerant Consulting has made the difference between me being a well meaning, but timeconsuming volunteer, and someone who can make real, sustainable changes to the way a charity or NGO runs itself - and that will last far longer than any donation.
........................... For more information or to sponsor any of the causes please visit:
www.BetterLifeCycle.com www.BidnaCapoeira.org www.YenegeTesfa.org
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Americas + 1 781 674 0400 Belgium + 32 (0) 2 762 52 38 Denmark + 45 35 45 90 01 Finland + 358 10 396 8800 France + 33 (0) 1 56 69 53 00 Germany + 49 (0) 211 58 33 00 33 Netherlands + 31 (0) 20 570 5400 Norway + 47 22 43 29 23 Sweden + 46 (0) 8 670 6579 United Arab Emirates + 971 (0) 2 406 98 77 United Kingdom + 44 (0) 20 8338 5000
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