It took BP 116 days to cap the Deepwater Horizon Oil Spill. In other words, for 116 days approximately four million barrels (170 million gallons) of oil continuously spilled into the deep ocean. It is unknown how long it will take to cleanup and for lives to get back to normal. Perhaps it will take years or decades.

The exact cause of the explosion may involve a lot of finger pointing, but the simple fact remain: BP failed. BP failed to adhere to business policies, due diligence and demonstrated incompetency for 116 days straight. That incompetency resulted in waste: environment, marine lives, people’s livelihood, money. An indisputable business and organizational failure. Tony Hayward‘s claim that he had no prior knowledge of the drilling of this well lacked logic that ultimately led to his departure as the CEO of BP. The obvious fact is that as the head of BP it was his responsibility for BP’s successes and failures.

Now, let’s dissect the challenges of change management in enterprises, regardless of technology solutions that are available.

Enterprise 2.0. Enterprise Collaboration. Change Management.

The commonality of the above? Eliminating corporate waste and cutting cost; boosting efficiency, productivity, innovation, sustainability, competitive edge with technology. The question begging to be asked though: Are tools and processes being implemented correctly? Sadly, hardly. Most often these are sound bites in SME to large enterprises. Why? It’s fashionable to use jargon and buzz words of the day. People enjoy linking their image with cutting-edge technology no matter how superficial the knowledge. As shocking as it may be failure to execute the solution is largely due to lack of experience, expertise and knowledge.

Then there is “social”. This magical word is believed to transform businesses from it’s medieval, slow-grinding, hierarchical organizational death trap to today’s fast paced, open share, transparent, sustainable and cutting-edge business solutions with technology. The concept would be true, if it was simply not as absurd a claim as it sounds. If the human minds ranked words like search engines do, perhaps meta tagging buzz words in board meetings and presentations would be of importance. But, does the Board’s brain light up on buzz words or does it on company’s earnings and losses – or, to be more accurate, waste?

Global financial meltdown has forced enterprises to cut cost, be more efficient. The solution has always been available with technology. The challenge was (and still is at many sectors), resistance to embracing technology as a strategic business partner and not merely a service provider. Tech silos too are comfortable in being told what to do vs providing strategic solutions focused on business need. Popularity and/or large user base alone will not make a product valuable if it does not meet business needs. Think Facebook and Warren Buffet‘s, Berkshire Hathaway Inc. As impressive a portfolio as Facebook claims with over 500 million users, would integrating Facebook accelerate Berkshire’s day to day operation? Very doubtful.

Yet still, one of the greatest challenge of change management remain people themselves: technology alone cannot be the solution if not embraced and executed by knowledge workers. Little knowledge combined with excessive use of buzz words in many different forms does not make a person an expert. In hierarchical organizational structure, that very misconception is a looming threat to innovation and efficiency. Meanwhile, the vast majority of work force remain under-valued, under-appreciated, mismanaged, frustrated leading to heavy turnover, productivity loss, inefficiency, low morale. These negativity essentially translate to waste of time and money in company’s ledger.

Whether hierarchical or otherwise, every employee is directly responsible for company’s sustainability and growth. However, leadership sets the mood. If that leadership is hands-off management, creating more layers and fragmentation contributing to confusion than solution, leadership must be reevaluated. An example: Yahoo! Inc. Carol Bartz compared the then organizational chart to Dilbert cartoon. It is the responsibility of the head of a company to foresee successes and failures of its management. If failures are outgrowing its successes, change management is a necessity.

Regardless how many layers and silos a chief executive form to efficiently run an enterprise, she or he must break down those same layers if the end result is disaster. If the chief executive chooses to be on an yacht outing, leaving his crew to get their hands dirty as Hayward did, that would be a disastrous strategic decision for himself as well as for the company. He too should be actively involved with the rest of the employees. Otherwise, it’s poor leadership and management.

Now, if every company’s waste could be graphically determined in the same manner as the oil spill did for BP, a large number of US cities’ business districts would be submerged in oil. It is up to the chief executives to heed the explosion in their own corporations and act quickly to cap the spill. Embrace technology as strategic partner and implement effective change management.

Today and not tomorrow.

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Tags: Berkshire Hathaway Inc, BP, Carol Bartz, change management, Deepwater Horizon, enterprise 2.0, enterprise collaboration, Facebook, knowledge, oil spill, social, Technology, Tony Hayward, Warren Buffet, Yahoo
Posted in Best Practices, Business, Collaboration, Sustainability, Technology |

Change management is a natural process following mergers and acquisitions. From the Board to operations, people are required to realign themselves with the new founded entity. The process may involve reshaping, restructuring, new hires, as well as disengaging personnel, regardless of the length of their tenure or contract. These changes are not only smart but essential – as separate entities objective and goals would have been different but as one merged entity, business needs must be redefined across the board.

Most times change management is a challenge. People fear the unknown and act to preserve their interest and long-held authority within an enterprise by resisting change. The reality though is shareholders’ interest boil down to bottom-line: profitability. Rightfully so since it is their dollars on the line when businesses bear losses. Those losses, or gains, are directly attributed to how and who run the shows, from the Board of Directors to senior executives to rank and file. As owners, shareholders appoint the Board and entrust them with certain authority to execute in the best interest of the entity – ideally. Unfortunately, too often, that is not what transpires in reality, as we have seen with AIG, GM, Goldman Sachs and Morgan Stanley and Fannie Mae and Freddie Mac, to name a few.

The question then is what steps should shareholders take to protect their interest and essentially, the business? How are they assured that past mistakes will not be repeated by the Board and their executives? Owners are not involved enough to ensure success, regardless of the reason(s). On the other hand, executives who are hired and entrusted with the well-being of an enterprise must make executive decisions that exclusively benefit the business. If that process require re-aligning their own positions and/or compensations, engaging independent entities for objectivity and proficiency and/or new hires as well as disengaging people, so be it.

People mistakenly credit their positions more than what they really are. The longer a position is held, the more that misconception. Extremely few people are indispensable in the working world. The sooner people grasp this concept, the stronger and more efficient the work force will be. Carl Icahn said it best -

…….. managers have been awarded lavish retention bonuses. In my view, very few managers are irreplaceable, especially in this economy.

On the other hand, shareholders may boost their work force by assuring easy access to them by all on board, be it at AGM or direct discreet communication without the fear of retaliation and/or loosing their jobs. Not the complaint department, where it’s essentially handled by legal to avoid lawsuit, but direct access to share ideas and/or to present business proposition for profitability. Wouldn’t owners (shareholders) be open to ways their business may reach greater heights by accelerating performance, doing more with less (cutting cost), boosting efficiency? As a shareholder, I would.

Mergers and acquisitions bring forth complex problems because the competition within is doubled to protect own self interest – human nature. Shareholders must be more involved, demand more answers – at least during the months following the acquisition. One greatest tool to their advantage is technology – it should be used to strategize, partner and execute.

Tags: acquisition, AIG, Business, change management, enterprise, entity, Fannie Mae, Freddie Mac, GM, Goldman Sachs, mergers, Morgan Stanley, owners, shareholders, Technology
Posted in Best Practices, Business, Technology |