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Introduction

he economic climate may have changed forever, debts are now guaranteed by

vervalued assets which have led to a scenario where people may never be able

o pay back what they currently owe. Economies have moved their manufacturing

lants to Eastern Europe and the Far East (the only proven source of wealth

eneration), and the US Government is now left with $53tr (4x USA GDP) of

iability which has doubled on the George Bush watch, and £85Bn of UK business

ebt is due in 2009. An exciting mess or do we choose to be fearful?

What’s interesting is all of the complacency that has filled the gap – our

unaffordable micromanaging of deadly public sectors, body-shopping

recruiters filling roles with more of the same, staff retention issues, and

excessive business-business costs.

The traditional fixes now don’t work, patience with consultants & their 5 box

models, thank goodness is running out. That’s the good news.

Research from Ashridge Business School shows that the skill set to lead in

turbulent times are shared vision, authenticity, and vulnerability, building

relations, living with confusion, discipline and humility. These intangible

business assets are the new untapped source of value.

This series sets out to demonstrate our complete commitment to

our clients. We can help you develop agility, so when you need to

you will be able to react. I have added to our implementation

capability a partnership to gather hard to get facts to quantify

revenue and profit targets and competitive positions, on

which to base shared reward programs.

It is in the simple stuff the answers lay.

Tom Pickering CEOIcebreaker Executive Interim Management

0207 193 5518...

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The way you transition will be the way you set yourself apart from the

competition, mitigating the doom and gloom that was rife in the UK

workplace during the last major recession

A lack of trust is characterized as confrontation, holding back data, and in

extreme c ircumstances encourag ing sabotag ing behavior . More

micromanagement is not the answer, in fact is quite the opposite; you should

engender trust with employees, suppliers and customers.

Why Change Matters

Benchmarked costs create a reference to achieve par, what do you need to

deliver >25% savings to secure your position? At the same time what do you

need to grow the business? What will the business model look like to get you

there?

Supply chain costs can be over 70% operating costs. Most of these costs are

locked into the rigid structures arising from the procurement specifications we

set. Rigid supplier specifications, often even set out how to do it, and are

unrelated to performance in service. How disrespectful and costly is that?

Supplier’s hands are tied and opportunities of benefits from suppliers are

squandered.

Reasons to be thoughtful - part 1

Through applying step changes in technology, Indian companies such as ICICI

offers an internet banking service some 25-75 points higher than Canadian

Banks, consequently every week 1500 Canadian customers are signing up.

Far Eastern manufacturers focus on defining the functional spec, parameters

e.g. budget cost, and interface requirements and let vendors use their

initiative to achieve these business targets.

Intellectual property is becoming less central to the new world as this is in fact

a reflection of past or current competencies, and as with many assets is

rapidly diminishing in value. The focus instead should be on aligning time to

market getting ahead and staying ahead

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Reasons to be thoughtful - part 2

Successful leaders will be those that transform their people’s perception of

Change – it is essential to be seen as enormously exciting. In the face of

adversity we all have the choice of fear or excitement.

Don’t be a control, freak

There is no doubt that outsourcing does not just resolve an operational

problem, it is key strategic decision; outsourcing a headache is very likely to

lead to a migraine and the more customer facing functions there are the lower

is the benefit in resourcing those functions remotely.

There are 3 elements required to accelerate competence building; selecting a

flexible network of specialised suppliers, connecting them into your business

and influencing their competence. These elements will force us to re-evaluate

the rationale for the firm. Many organisations replicate facilities overseas and

impose their systems and processes regardless of culture and start captive

green field facilities. The more enlightened leverage local capabilities by

collaborating with selected suppliers in the selected region and working

respectfully and in that way leveraging a great deal more value

In parallel it can be recognised that mistakes will be made and these can be

acknowledged and not be dealt with too harshly else the organisation will

become severely risk adverse. The key will be getting a balance of external

and internal information and making teams realise what they do really affect

the numbers so that they are in no doubt about their responsibilities.

The focus for value creation is shifting from products to talent markets.

Specialisation is becoming an important engine of value creation and is

through this specialisation access is achieved to global economies of scale and

the associated refined competence that can be influenced. Talent is converted

into value through sound business processes, trust and respect to deliver.

Connection to the core business processes and through this connection the

opportunity arises for influencing competence building. At the boundaries of

the global businesses differences of culture and business process creates a

spark to create great innovation and new ways of thinking.

This competence building can be iterative however the entrepreneurial

business models evolving globally centred in highly competitive markets, often

with excess capacity drives a dynamic where businesses and product

architectures are being re-designed from the bottom up, creating

opportunities for highly disruptive breakthrough approaches.

It is only by having a foothold and influencing these competencies in these

rapidly evolving markets currently emerging in China and India that this

opportunity will become evident and partnerships identified.

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Reasons to be thoughtful - part 3

In a recent survey 54% of UK boards had insufficient talent at board level, yet

only 21% had management development programmes.

Never underestimate the strategic importance of having good people and the

management ability to guide rather than interfere - giving individuals real

power is terrifically motivating and in so doing they will be improving their

skills and building the organisations competence to develop further.

Planting a seedMaking tough organisational decisions to meet the challenges can be carried

out once and quickly with those affected compensated fairly and generously.

Senior managers should review the interfaces between their business and its

suppliers

There is a point in every organisation where decision making and task

ownership have to separate. Many people like to think they have a say in

every major decision however it is simpler and clearer if there is one person

ultimately making the decisions.

A business that lacks decisiveness will muddle through meetings and these

challenges with very little decided. Where decisions are made by consensus

things happen much more slowly. Successes in complex industries have usually

been achieved because of business agility and quick reaction times. A business

that is not nimble will become obsolete and one strong leader can change

this. What is good for a company is not always good for comfort zones.

What are the characteristics of those individuals to make these changes

happen, and what support do you need?

Measuring Business Performance

Developing decision trees to define the stages to make big decisions and defining

the supporting data that is required to make these decisions is important for

management clarity. It is important that everyone is on the right branch and stops

harking back to earlier points which have already been agreed upon. Having

worked out the route, have all the arguments - the key is not going back and

concentrating on the decision not the detail. The details will follow the strategic

decision, boundaries and timeline.

Set all the key players the task of setting out their objectives for the next few years

forcing them to identify and address the big issues, and potential scenarios. Having

set out the plan - explain what you are doing and why you are doing it and how this

will affect individuals. Monthly meetings with subordinates will be vital and let them

know if there is anything you need to communicate you will let them know – thereby

making them less susceptible to rumours. Demystifying decisions in smaller groups

will make staff feel involved, consulted and informed.

There are really only a few lead variables that determine advantage – technology,

materials costs, employee knowledge, labour rates, and the availability of finance and

business processes. Which metric will draw in the others to centralise competence

and industry, and what should you focus on controlling to succeed?

A traditional view is that firms exist to economise on market transactions. The

view of the reasons for the firm’s existence is changing; moving from

efficiency savings to competence building and institutionalising systematic

innovation from flexible partners.

This ability to accelerate competence and innovation building is the new

reason for the firm’s existence to seek diverse and relevant specialisations to

creatively resolve business issues.

The rapidly growing domestic markets in China and India are a catalyst forcing

specialised companies to come together to develop innovative products and

business models to serve this new generation of customers in these

demanding markets. It’s the way they work together that makes the

difference.

Reasons to be thoughtful - part 4

Decisions, decisions, decisions

Make the most of your mavericks

Can you think of a situation where you learnt something from being told what

do? Consensual decisions squander innovation; they achieve the lowest

common denominator, limiting the ability to address issues and threats.

Consult and decide will illicit the views whilst reserving the right to make

tough calls.

Mavericks are the high energy go getters that respond well to working to a

vision, others will be scared and can’t see the links, and will need the picture

bit by bit, with measures to hold the process together. Recognize and accept

individuals are different and that that’s OK and make use of the diversity to

manage across both time frames.Consultative decisions, when progressing tough issues, will drive the team

mad as it only ever leads to winners and losers.

Set out the decision making process up front to avoid being seen to be

underhand or divisive.

Reducing participation sets a tone of focus and efficiency. The pot of gold is

the actions that come out of consult and decide process, and the interim

manager’s ability to lead and develop the team by giving them the space to

deliver.

To effect the change, you need the mavericks to lead and challenge the

significant reduction interaction costs between traditional developed

economies. The iterative reduction in interaction costs also drives the ease of

the switch from one provider to another. Reductions in these interaction costs

are assisted by technology innovations, but it is primarily the way we engage

that creates more value at less cost.

Contact: Tom Pickering

CEO Icebreaker Executive Interim

Management Limited

Telephone: +44 0207 1935518

tom.pickering@icebreakerexecutive.com

www.icebreakerexecutive.com0

Public policy is intensifying the war for customers and deregulation is eroding

trade barriers. Trade liberalization is enabling companies to compete on a truly

global scale, creating much more bargaining power for consumers. The ease of

the formation, funding and operation of companies in certainly however

becoming an issue

Most value will come from addressing the tough calls, reviewing vendors and

your existing team, thereafter the challenge is in giving these remaining

partners the space to think, the trust to do, respect to implement, without

micromanagement. Having made the decisions, define the objectives and

boundaries, the let the remaining team deliver figure out the how. Being part

of a successful change management process, can be the most rewarding time

of your their careers.

Most businesses have become complacent, yet have huge untapped

competitive resources, people, and customer contacts. This is often only

apparent to those who have personally funded startup businesses. It is by

getting back to the core business, working more effectively with customers

and third parties that this intangible source of value will be realised.

Getting the right support