European economic prospects are gloomy. Just have a look to newspapers frontpages if you are not yet convinced. In such context, as I wrote once, best strategy would be to “be prepared to start again“. That means to be aligned with customers expectations and to be competitive when business will start, in short, having a good position, on good place, at good price. Yet every european companies have cut at first their 2012 budget to save cash which threatens to rarefy.
Then, for most of companies, business equation will be : transforming themselves while saving capital spending
Currently, Europe is hit by a severe liquidity crisis which have its roots in questionable solvency of states which spread to banks. Financial european world does not trust each other and borrows liquidities at very high interest rates which darken states and banks solvency more and more. How to get out this revolving door circle is the question which hogs every european summits for months.
What is taking out from all that: the urge to restart cash machine by restoring economic growth based on enterprises competitivity. Several medicines are contemplated : euro depreciation which lower prices but rise fears of capital shrinking and more questions on solvency, frugal states budget and tax cuts which mitigate unit labour costs but rise fears on social model and states solvency. Anyway, all this would take time and is drawing a bleak outlook for next years.
Then, according to their own prospects enterprises would follow 2 strategies :
- be prepared : get slimmer and stay prepared for economy recovery
- be active : contribute to restore growth and transforming themselves to be more competitive
Then how to get transformed while saving capital expenditure ?
First of all, being successful in transformation project. For years, business gurus explained that enterprises are draining a lot of energy to define brilliant strategies but fall short in execution (“[Strategy] Execution is the great unaddressed issue in the business world today. Its absence is the single biggest obstacle to success and the cause of most of the disappointments that are mistakenly attributed to other causes. Ram Charan, Larry Bossidy).
In 2008, in a management conference which reviewed all aspects of question, William Malek sum up causes of failure. They are:
- No common language
- No common framework
- No integrated systemic planning process
- Poor design of organizational system accountabilities
- Representational issues of complexity at a high level of abstraction
- Organizational maturity phases require different methods and leadership
For enterprises that means a lot of energy consumption – time, cash, motivation – for getting a small part of strategy goals and gains.
Here, the point is not to say that failure is not acceptable since all projects have a given part of intractable risks and may be bets worth to be done. But when so much hurdles gloom results, it is almost impossible to get trust, reputation and finally market support in a struggling economic context.
Now it is time to change that… It is time to radically Improve change efficiency and strategy execution. It is time to drive people to success which will drive them to another successes… It is time to leverage companies competences and capabilities… to glue operations, IT and management people into a global team…
This will restore trust into companies capabilities to be competitive, fuel more cash and capital and, finally, break the revolving door cycle.
For reshuffling their capabilities, companies have to establish a new function at C-level which will be in charge of building common framework and common language. It will then coordinate work on change targets identification, planning and performance framework for executing strategy. Then it will provide scope and roadmap to companies change managers and project managers and drive an integrated systemic planning projet. It will provide tools and method with high level of abstraction and help to define the good change method.
Getting out Babel tower by making IT and financial people working hand in hand with production, sales, logistics and other enterprise functions is today mandatory for being sufficiently integrated.
To cope with new customers and market expectations, companies needs to drive their managers to more systemic approach of change. They will obtain strong foundations and directions which will improve changes straightness and successes. Common language and common framework will increase trust between internal stakeholders and increase successes.
All this is matter of Enterprise Architecture.
For years, some business bodies managed to join their competences to define framework guidelines to drive change successfulliy within complex organisations. They relied on best practices approach to provide pragmatic and usable methods and had the vision of bringing systemic knowledge to Enterprise Change approach. They started to work on IT/Business alignment topic which was hardly enough with respect to challenge. One of the most interesting body, The Open Group, crossed the boundary and relased TOGAF 9 as a comprehensive change management framework. Even if some improvements may be expected, it is already a strong foundation for companies own change practice.
Good demonstration of Enterprise Architecture efficiency is “Going Digital” program of Procter & Gamble which gained praise by industry. Which company will be the next one ?
2 thoughts on “European crisis urges companies to reshuffling their change capabilities”
Maybe it’s time politicians and administrators took advice from professional economic crisis specialists with a proven track record of positive results. For example, the Orlando Bisegna Index, specialists in the economic crisis, have developed a program that has helped various counties with debt problems, unemployment and business failures, have helped the economic condition of many families also.