ISSUE 31
C H A N G E I N A N A G E O F I N N O VAT I O N
WELCOME
THE JOURNAL FOR CHANGE LEADERS
T
leading
change
continues
to be a
leading
business
challenge
ISSUE 31
he articles in this issue of IMPACT JOURNAL
have a consistent theme: leading change.
In the 2015 Impact Executives’ Change
Leadership Survey, hundreds of senior executives
from around the world confirm that leading
change continues to be a key business
challenge. However, Anitha Thornlund, an experienced
change leader from Scandinavia, explains how organisations
can prepare for a new permanent state of change and still
flourish in her article, “Change is here to stay”.
Boards are wrestling with the disruptive effects of change.
In fact, e-commerce entrepreneur Niclas Huerlin argues that
a lack of board-level engagement in digital strategies present
the biggest risk to delivering innovation projects. The influence
of digital channels on almost all industries and organisations
should provide further motivation for board appointments
to include diverse candidates that understand the fast pace of
technology change.
If there is one company in recent years that has embraced
change and embodies the spirit and values of innovation it is
the online music streaming service Spotify. In her interview
with Impact Journal, VP of Global HR, Katarina Berg, explains
how Spotify succeeded. And in a feature article, business
journalist Gavin Hinks argues that having just one big idea
is no longer enough to stay ahead in today’s environment of
constant change.
With our ‘Impact Journal Insights’ highlighted through
the following pages, I hope you enjoy reading these diverse
illustrations of how one of 2015’s most pressing challenges –
leading change – can be addressed, embraced and optimised.
Christine de Largy
Managing Director,
Impact Executives - Global Interim Management
[email protected]
+44 (0) 20 7314 2003
Editorial Gavin Hinks and Andy Bookless
Design Phil Shakespeare
IMPACT is a publication of Impact Executives,
a division of Harvey Nash plc
Impact Executives Head Office
110 Bishopsgate, London EC2N 4AY
+44 (0)20 7314 2011
www.impactexecutives.com
©2015 Harvey Nash plc
All rights reserved. Contents may not be
reproduced in whole or in part without the
written consent of the publishers
2
ABOUT IMPACT EXECUTIVES
Impact Executives is a leading provider of interim
executives to organisations of all sizes around the world.
With offices covering the UK, the Nordics, Europe, Asia
Pacific and North America, Impact Executives is part of
the global recruitment specialist Harvey Nash Group
plc. Over the past 20 years it has helped more than
2,000 organisations to engage interim experts at short
notice to help them manage periods of growth and
transformational change.
Impact Executives / IMPACT / Issue 31
CONTENTS
CHANGE IS HERE TO STAY
Experienced change leader, Anitha
Thornlund, explains how organisations
can prepare for a new permanent state
of change and still flourish. Pages 4 - 5.
INNOVATION:
OUTDOORS AND INDOORS
MODEL BUSINESS: WHY
BOARDS SHOULD GRASP
THE DIGITAL CHALLENGE
Ola Klingenborg uses his experience from the
world of outdoor advertising to argue that
only by empowering staff and embracing
failure can organisations build
a truly innovative culture. Pages 6 - 7.
E-commerce entrepreneur Niclas Huerlin
knows how to turn digital innovation
into business success. He believes a lack
of board-level engagement presents the
biggest risk to delivering innovation
projects. Pages 8 - 9.
THE SPOTIFY WAY
If there is one company in recent years
that has embodied the spirit and values of
innovation it is the online music streaming
service Spotify; an interview with Spotify VP
of Global HR, Katarina Berg. Pages 10 -11.
IMPACT EXECUTIVES CHANGE
SURVEY RESULTS
Results and analysis from the annual Impact
Executives Change Survey: a majority of
business leaders are shifting their focus to
growth-related endeavors. Pages 12 - 15.
THE IMPACT EXECUTIVES
REVIEW OF BOOK REVIEWS
What makes a great change leadership book?
Our resident book-worms present five top
books for change leaders, as well as a
200-word summary of what their 2,000
pages of text really mean! Pages 16 -17.
THERE’S NO SUCH THING AS
FAILURE, ONLY FEEDBACK
The big problem for companies is making
innovation something that happens
continuously. Having just one big idea is
not enough. A feature article from business
journalist Gavin Hinks. Pages 18 - 19.
Impact Executives / IMPACT / Issue 31
3
PROCESS
CHANGE IS
HERE TO STAY
Anitha Thornlund has held top-level legal and compliance roles at
Svensk Handel (the Swedish Trade Federation), Carlsberg Sweden, CocaCola Nordic and Microsoft Nordic. She explains how organisations can
prepare for a new permanent state of change and still flourish.
Organisational change is unavoidable in a
competitive business. But it is the people behind
the scenes – the support staff – who are essential
in forming corporate cultures which accept that
change doesn’t just end with completion of
the latest project. Indeed, according to Anitha
Thornlund, an experienced executive with a
track record that includes time heading HR,
legal, credit and communications departments
at some of the world’s biggest consumer brands,
support roles are critical in reinforcing the
message that change is good and should be a
permanent feature of corporate life.
“It’s important to see how important the
administrative functions are in change. People
forget that when they talk about strategic
change. The ‘stoppers’ of change often sit in
these kinds of role – in communications, in HR,
even legal can be a blocker.”
She adds: “These stoppers can obstruct
engagement with change among staff if they
don’t believe in it and fail to put processes in
place to support it.
“In the era we’re in you have to understand the
mechanisms for driving change, the processes
employees must go through to actually get
change moving and implemented. And this you
do, for example, from HR or communications.”
4
Impact Executives / IMPACT / Issue 31
Anitha speaks from experience. With
a forte for managing change in teams or
organisations, she now takes on interim
placements but her CV reveals a record
of leading support services or business
transformation at a raft of big name
companies. Anitha has served at brewers
Carlsberg, Sweden, where she was head of legal
and compliance followed by a stint as HR and
communications director. This followed time
as general counsel EMEA/Asia and then head
of global sales support at Lawson Software.
Prior to that was a period heading the legal
department at Coca-Cola Nordic and Microsoft
Nordic. More recently Anitha was CEO of an
international law firm in Moscow, leading
business transformation. Currently she is a
interim HR /IT manager at Svensk Handel (the
Swedish Trade Federation) and temporary CEO
of one of its affiliates.
Her experience has left Anitha with a passion
for “goals-driven” change, and an abiding belief
in back-office services playing a significant role
in underpinning strategic change.
IMPACT JOURNAL SAYS:
But while Anitha’s role is to implement immediate
change requirements, she emphasises the broader
strategic need to shepherd organisations and their
staff to an acceptance of change as an ever-present
part of their working lives, especially at a time when
frenetic technological innovation means companies
must adapt to keep pace with competitors and new
trends. Mindsets, Anitha argues, must be moved
from “conserving” old ways of working to one of
delivering on goals. If that can be achieved, change
will be accepted as “good”, she says.
“The first thing people ask when you come in as
someone who will help drive change is, ‘So when
will we be ready?’
“The answer you have to give is that they will be
working with change for ever because they will be
in an organisation that works with goals, and the
goals may be totally different next year.
“You have to build a mindset that the world is
changing at a fast pace, and you have to keep up to
be relevant. To do that you need to have change all
the time.”
creating vision and policy centrally.
“In a small organisation you can create
change, visions and goals from scratch, together
with the CEO,” says Anitha. “You can be the
strategic eye in the room.”
That strategic advantage places the onus on
support services gaining a full understanding
of their organisation’s goals and planting them
firmly at the core of their own policies and
processes. Anitha observes that roadblocks can
be formed when support departments become
fixated by the latest models, or ideas, about
how their departments should run, without
considering how they serve wider business aims.
“If you are doing anything that doesn’t help
the business deliver on its goals, then you
shouldn’t be doing it,” Anitha insists.
“It doesn’t matter what kind of change you’re
in. The only thing you have to understand is
where the business is going and the goals that
need to be reached. Then you have to help the
CEO take it there.”
PROCESS
In tandem with that passion comes a belief in
the inherent advantage that an interim has when
brought in to manage change alongside a reformminded CEO. Interims, she says, are “healthy” and
“clean”. Unaffected by an organisation’s recent
past, and its entrenched positions, they are able to
assume the role of “neutrals” to develop change
objectively (a distinct advantage when helping
craft change programmes that will include newly
defined goals and KPIs for everyone from senior
management to employees at the sharp end of
service delivery). According to Anitha, goals and
KPIs move an organisation forward in a single
direction and provide a transparent process.
It’s important that they come from a part of the
company that is untainted by bias.
“If you come from the support function you are
working with everyone and that’s why you have
such a broad view of all delivery departments,”
she says.
“You can help the CEO to motivate the leadership
team, and you can sell change to them.”
Often the interim can offer more value to
a smaller organisation where processes and
support services are less well developed than in a
large enterprise with a multifaceted headquarters
IMPACT JOURNAL SAYS:
Effective change management requires leadership; the
CEO must lead by example when adapting to change.
Interims offer a
'neutral' set of
hands to manage
change
IMPACT JOURNAL SAYS:
Organisations must be prepared to be in a permanent
state of change. Change is now business as usual.
Impact Executives / IMPACT / Issue 31
5
EMPOWERMENT
INNOVATION:
OUTDOORS
AND INDOORS
Ola Klingenborg is the regional vice president and CEO
Sweden of Clear Channel, the international outdoor
advertising specialists. He outlines to Impact Journal how
empowering staff can help organisations build a truly
innovative culture.
IMPACT
JOURNAL SAYS:
Building an effective innovation
culture rests on leaders with the
courage to take risk knowing at
least 50% won’t succeed.
6
Impact Executives / IMPACT / Issue 31
tune what we do. It’s about how we work with
processes. How we make sure we deliver to clients
the things they need in an efficient way, so that
we can spend more of our resources meeting and
talking to them,” explains Ola.
A KPI close to the heart of Clear Channel is,
therefore, the time that staff spend in direct contact
with clients. Ola insists this is one of his most
significant indications of innovation having an
effect on the business. “Innovation that leads to
more client interaction, or happier clients. That’s
what we are looking for,” he says. The measure is
supplemented by a client satisfaction survey asking
if Clear Channel’s service
remains relevant, and
a regular study asking
employees if they believe
they are working on new
things.
“If we stagnate and stick
to what we’ve always done,
it’s impossible to keep the
very best talent,” says Ola.
Staff figure heavily in
Ola’s view of innovation.
The organisation is
decentralised and workers are empowered to
make decisions which, Ola says, means “pushing
responsibility down in the organisation”. But an
innovative culture, he insists, starts with the right
executives who come to know clients in depth.
“The executives really have to understand the
clients, it cannot be something delegated to sales. All
innovation has to start and end with a client need.
“The other important thing is courage to take
risks. When you are dealing with innovation you
need to know that half, or more, of all projects
won’t succeed. But that’s the nature of things. You
have to accept it’s not a failure, it’s an opportunity
to learn. That’s a very different mindset from a
production environment.
“Then it’s about inspiring. If you want people
to innovate, you need to be able to inspire them
to think about the future and what the client is
dreaming about. It’s really important.”
EMPOWERMENT
F
or Ola Klingenborg innovation starts
with a definition. “Innovation is the
process whereby we satisfy a new
and emerging client need. One that
they didn’t know they had,” says Ola
Klingenborg.
He should know. Clear Channel works in the
world of outdoor advertising, a sector once
dominated by print-based billboard posters. Faced
by increasing competition for advertising spend,
Clear Channel had to innovate. The business now
boasts an array of eye-catching digital displays
delivering advertising messages in high definition
and video, including the
world’s largest outdoor
screen revealed during
November 2014 in Times
Square, New York.
The innovation doesn’t
stop with big displays. Clear
Channel has pioneered
interactive advertising with
Connect, a product that
allows smartphone users to
link directly with the brands
they love through outdoor
wi-fi connections. This development means that
outdoor, no matter how advanced its screens, is
no longer just about reaching a mass audience
with stunning images. It can now provide direct
engagement with customers. Even the giant screen
in Times Square is interactive.
“It is transformative,” says Ola. “Our ability to
generate mobile search and traffic at online stores
through our interactive screens means that we
believe the time of outdoor is really now. We can do
both engagement and reach.”
But digital innovation is not just about the
products. It’s also about work processes for Clear
Channel’s staff. All planning in Clear Channel’s
back office has been digitalised so the business can
produce highly targeted campaigns across its assets
at an accelerated pace.
“Innovation doesn’t have to be a breakthrough
product. For us it’s also about how we fine-
Innovative
organisations
empower staff to
make decisions
Impact Executives / IMPACT / Issue 31
7
DIGITAL CHANGE
MODEL BUSINESS:
WHY BOARDS
SHOULD GRASP THE
DIGITAL CHALLENGE
Niclas Huerlin is a highly regarded e-commerce executive, with more than 20 years
experience in a range of high profile digital Nordic businesses. He believes a lack of
board-level engagement presents the biggest risk to delivering digital innovation projects.
Given the ubiquity of the internet it comes as a jolt to learn that not all business takes place
online. Indeed, as one of Sweden’s veteran e-commerce entrepreneurs, Niclas Huerlin,
points out, around 90 per cent of all sales remain “physical”. That means there is still
room for development in most business sectors, though sometimes the incentive may be
slow to emerge.
“As a general view, nothing is better
than it has to be,” says Niclas, suggesting
that without competitive pressure
businesses in many verticals fail to invest
in digital trading.
Even so, the switch to e-commerce is
happening at a rapid pace. So much so
that digital trading has rapidly evolved
from e-commerce to m-commerce
(smartphones) to an omni-commerce
approach in which businesses use
multiple channels to serve customers’
needs. The urgency to master digital
trading means it has to be on the agenda at board level and mould business models for
the future.
“When a customer wants to buy something the decision starts online,” says Niclas.
“And in many cases it actually ends up offline. But if a business doesn’t exist online, or
have a good presence there, you won’t be getting those sales.”
Digital innovation
is a strategic issue
and demands
board-level
engagement
8
Impact Executives / IMPACT / Issue 31
For Niclas this is a broad question about mature
organisations reacting to accelerated change among
competitors and markets. Change, according to
Niclas, can be hard to make, especially if a company is
heavily invested in physical infrastructure, such as
a chain of stores.
The biggest impediment to transformation, Niclas
says, is being “strategic” and at boardroom level, where
he says there is a shortage of e-commerce competence.
Resolving an internet business strategy therefore has
to take place at the most senior levels of management.
“It has to be at board level,” says Niclas, “because
all of those investments are strategic, long-term and
signed off by the board. If boards don’t have the
competence to see where this is going, they could
jeopardise the whole company.
“The knowledge and operational skills are fairly easy
to solve on a company level. You hire a person, you buy
a system. But that doesn’t solve the problem. The whole
business model has to be solved. And that can’t be done
by a young person in the marketing department – it’s at
the wrong level.”
IMPACT JOURNAL SAYS:
IMPACT
JOURNAL
SAYS:
With the pace of
technology change
becoming evermore rapid there is
a greater urgency
to understand and
commercialise
digital platforms.
DIGITAL CHANGE
Niclas has watched and influenced developments in online business for the past 20 years. His career
has included time as European director of business development at Microwarehouse, an online
retailer of computer equipment, and a stint as CEO of inWarehouse, the second largest digital retailer
in Sweden. He has also been a board member at Familjeapoteket, Sweden’s first online pharmacy. He
spent four years running an e-commerce module for Hyper Island, a private college teaching digital
business in Sweden, the USA, UK and Singapore, and is the founder of Roombler, a provider of cloudbased hotel management software. His latest venture is as senior partner at Enferno, a provider of
back-end platforms for webshop developers.
But if Niclas is serious about anything it is the belief that e-commerce is about more than taking
orders on the internet. He reels off an impressive list of Nordic players – in music Spotify, among telcos
Rebtel and Skype, in payments Klarna and in gaming Mojang, the producer of Minecraft – and points
out that what they mostly have in common is being “disruptive” in traditional markets. They prove that
“you can reinvent a traditional business by addressing it in a very different way – digitalisation is a very
important part of that,” he says.
All these companies emerged as start-ups run by talented people that came across investment
capital at a critical stage in their development, he observes. It begs the question whether existing
market players can adjust to make advances in digital markets.
With so much trade still to convert to e-commerce, Niclas
believes there is a bright future and the West must grasp
the opportunity it offers to become digital knowledge
economies. Smartphones will become the “hubs” for
wearable technology, he believes, as well as providing
the infrastructure for a host of new products that can be
commercialised digitally. E-commerce is increasingly
global, he says, insisting that online start-ups must think of
themselves selling to the world, not just local markets.
But he also believes that people working in e-commerce
will have to acquire
patience. “The
young managers
of today are native
in digital. The
concept of not
having an online
connection is
incomprehensible
to them.
“But one
thing that needs
to improve is
that they expect
everything to happen now. That means a lot of very good
people and good ideas are being wasted because people
cannot wait. They give it six months, but in my opinion it
takes five years to build something. If you are not there for
the whole ride you will never reap the benefits.”
Digital ventures
can be instantly
global, but they
still take time
to mature
When a customer wants to buy something,
whether B2B or B2C, the decision starts online.
Impact Executives / IMPACT / Issue 31
9
CULTURE
THE
SPOTIFY
WAY
Interview with Katarina Berg, Spotify
Words: Gavin Hinks
I
f there is one company in recent years that has
embodied the spirit and values of innovation it
is the online music streaming service Spotify. The
brainchild of Swedish founders, Spotify has been
a revolution in the music industry.
Launched in 2008, the company now has
more than 12.5 million paying subscribers but more
than 50 million active users across 58 countries. It has
gone from 29 employees to around 1,500 around the
world today, including staff based at offices in Sweden,
London and New York.
With such stellar growth, recruiting the right staff
and maintaining the company’s innovative culture
has been one of Spotify’s key objectives and a task
handed at the end of 2013 to Katarina Berg, who took
over as the company’s VP of global HR. Impact Journal
spoke to Katarina about finding the right people and
maintaining an innovation culture.
10
Impact Executives / IMPACT / Issue 31
IJ: What are the qualities you look for when seeking
leaders and executives in an organisation like Spotify?
KB: We look for strategic and disruptive thinkers,
people with proven leadership success at other
companies. Preferably they have experience in highgrowth situations and understand environments that
are fluid and flexible. They must be open to change.
Since our management service-level agreement is
important to us we search for leaders and executives that
can deliver on, and embrace, our leadership criteria.
Furthermore, we look for operational excellence,
subject matter expertise (such as Agile management
skills), the ability to adapt, an understanding of
streaming and digital, and with a creative eye.
Diversity of all kinds is key to our success.
IJ: So, how do leaders influence Spotify’s culture,
especially innovation?
KB: Innovation is in our DNA. It can’t just be
communicated. It has to be demonstrated. Whether
it be by product changes, our Hack Weeks (dedicated
time set aside twice a year for Spotify teams to
explore new ideas), or process developments. And
the leadership have to be the ones in the forefront,
actively supporting these things.
Great ideas and innovation come from
everywhere. Leadership should set the tone of the
organisation and the framework for teams to thrive.
We focus on the 70/20/10 framework for learning
and development.
IJ: Can a company hire its way to innovation?
KB: If a company fosters an environment of
innovation, even the least innovative people can
soon find themselves transformed. We have nontech people participate in Hack Week. We think
innovatively not only in technology, but also in how
we do business, how we operate, how we support
our staff.
The term culture of innovation does not fully
jibe with me. A culture of innovation has almost
no meaning unless you put principles in place to
support the culture and enable, learn and encourage
both success and failure. Action must be taken.
We need to encourage and enable people
to make bold decisions and support as well as
celebrate success and failure. You can create a
framework, priorities, and strategies for people to
thrive in and drive innovation.
CULTURE
Impact Journal (IJ): Tell us about the core values at
Spotify and the objectives that drive recruitment.
Katarina Berg (KB): Recruitment at Spotify is
a journey and we will probably never reach our
final destination. Talent acquisition in a highly
competitive market, a digital and 24/7 connected
world, means that the core values and objectives
that drive our Talent Intelligence (data gathering
for potential Spotify recruits) are adapted and
tweaked constantly. We need to move fast and
find the right talent – speed and quality are at a
premium. With this in mind the main objective
has been to provide the organisation with the right
‘band members’ (employees) as well as a tight
cultural fit. We believe in providing a forwardlooking and personal experience and to do this our
way – the Spotify way.
IJ: Spotify has grown so fast – how does it keep the
innovation culture intact?
KB: It goes back to a non-negotiable culture. This
is who we are. It’s how we operate. If we promote
innovation in all the ways we work, it doesn’t
matter how many people you have. Even those
hired specifically to develop process, procedure and
framework... they do so
in a spirit of innovation.
We work to ‘hit, re-hit
and remind’ with our
core messages. We also
give everyone a voice,
such as in our Global
Passion Tour (just ended)
in which we invited
everyone to redefine our values and to spend time
together connecting to our Vision and Mission.
In addition, our Town Hall meetings help us stay
on track. They take place every third week and this
is when all staff are invited to a live meeting with
our CEO Daniel Ek and have a chance to take part
in a Q&A with our leadership team. These are just a
few examples of how we invest in our culture and
internal communication.
Culture is at the
heart of successful
innovation
IJ: Do you look for innovation as a quality in the
leadership of all departments?
KB: Since innovation can be defined in many
ways it is a tricky question. But to give you an
answer, yes. We look
for experience in
specific fields, but we
look for people who
are problem-solvers,
change-makers who can
adapt and develop. We
look for people driven
by results, who think
creatively to achieve goals and push the limits in
their industries.
Innovative
businesses recruit
'disruptive thinkers'
IJ: Spotify now has staff across the world. Has that
complicated the effort to maintain an innovative
culture?
KB: The key is not to force the exact same culture
on every country or region. There is a ‘Spotify way’...
a look, a feel, a DNA. And that is a global thing. But
we allow for autonomy and individuality in each of
our offices and regions as well.
Impact Executives / IMPACT / Issue 31
11
SURVEY
TOP BUSINESS
CHALLENGES FOR
THE YEAR AHEAD
O
ver the past three years
Impact Executives have
tracked the leading business
challenges as articulated by
hundreds of senior executives
from around the world.
The lack of visibility for future demand has
consistently topped the list of worries, however,
for the first time in three years it does not occupy
the top spot. Senior executives today are most
concerned about the squeeze on profit margin
(18 per cent) compared to 17 per cent who cite
future visibility.
Also weighing more heavily on the mind
of business leaders in 2015 is an increasing
regulatory burden and ongoing economic
uncertainty, both likely to be seen as threats to
profitability.
With external factors having a greater impact
on 2015 concerns, those that can be managed
internally – such as cost over-runs, response to
global and local competitors, and skills shortages –
are all receding.
Business leaders seem to have more faith in
their own ability to overcome challenges they can
manage, such as cost control, but are increasingly
pessimistic about the impact of external
challenges not of their making, such as geopolitical decisions that are impacting economic
stability or regulatory control.
What is your single biggest challenge?
18%
16%
17% 17% 17%
16%
15%
12%
2014
2013
12%
8%
8% 8%
5%
7%
2012
11%
10%
9%
8%
7%
6%
7%
8%
5%
3%
Margin
pressure
12
Future
visibility
Impact Executives / IMPACT / Issue 31
Skills
shortages
Economic
uncertainty
Cost
concerns
International Regulatory
competitors
burden
4%
2%
4%
2%
2%
Local
Acquisitions
Poor
competitors
productivity
SURVEY
GROWTH ADMIDST CONSTANT CHANGE
Despite concerns about profit margin durability
and worsening global economic uncertainty, a
growing majority of business leaders are shifting
their focus to growth related endeavors, up by 10
per cent in the past three years.
During the same period, consistently high
levels of instability have been experienced by
more than eight in ten senior executives, as
whole economic regions shift restlessly between
recessionary and growth environments.
Managing change appears to be the constant
imperative in the modern business atmosphere.
Successful change
is a result of clarity
of purpose and
determination to
succeed.
Paul Stevens, COO,
RedPixie
Comparing experience of growth
strategies and managing change
86%
87%
84%
63%
62%
53%
Experiencing more change
Shift to growth
2014
2013
2012
Impact Executives / IMPACT / Issue 31
13
SURVEY
SEARCHING FOR PROJECT SUCCESS
Effectively delivering projects within an increasingly
turbulent economic environment has become more
challenging in recent years, but remains a critical
component of business success. As such, change
management skills are more critical than ever, with
organisations using ‘project success’ as an important
benchmark to identify future leaders.
However, the reality is that the proportion of
projects being successfully delivered is falling.
While almost two thirds of business leaders (63
per cent) experienced project success in 2013, this
had dropped to just over half (56 per cent) in 2014,
crashing 7 per cent in just 12 months.
Four in ten senior executives (42 per cent) are now
achieving project success in fewer than half of their
initiatives. Yet only 26 per cent will admit to project
failure. These results suggest that, for a significant
16 per cent of business leaders, project failure is not
being recognised or addressed.
ENGAGE WITH STAKEHOLDERS
Ineffective engagement of stakeholders has been a
top reason for project failure since tracking began
in 2012.
However, more than half of all business leaders
have recognised this and are focused on advancing
engagement skills; 51 per cent will invest to
further engagement skills this year.
Poor scoping is another contributor to project
failure, yet only four in ten (38 per cent) believe
strategic thinking can help improve scoping success.
Project achieved most / all original
aims and provided good ROI
63%
56%
2014
2013
Even fewer (25 per cent) believe planning and
organisation skills can help improve project success.
The responses by business leaders to ensuring
project success appear contradictory. While many
recognise the root causes of project failure too few
are investing in change management skills that
can improve the likelihood of success.
Those who are able to take action to improve
the probability of project success will be better
positioned to deliver business value in what is
expected to be an increasingly uncertain economic
environment. Top reasons for project failure
66%
64%
58% 57%
54%
54%
40%
39%
39%
Stakeholders not engaged effectively
Poor initial scoping
Unrealistic timings
2014
14
Impact Executives / IMPACT / Issue 31
2013
2012
SURVEY
OPTIMISTIC FOR AN INNOVATION FUTURE
Despite the challenges, business leaders remain
an optimistic group on the whole. Whilst
acknowledging increasing levels of change and
project risk to contend with, senior executives
remain positive about 2015.
A large majority (65 per cent) foresee better
trading conditions during the year ahead,
the same proportion as in previous years. A
small minority (9 per cent) predict worsening
circumstances, but this has dropped since 2013.
2014 Business Outlook (next 12 months)
2013 Business Outlook (next 12 months)
Worse
9%
Worse
11%
Same
26%
Same
24%
Better
65%
Better
65%
DELIVERING INNOVATION
Integrating an innovation culture is seen as the
best method for creating innovation success.
However, embedding an organisation-wide
culture can take time and patience, both of which
are often in short supply when business change is
constant. Establishing a formal system for creative
ideas or defining innovation requirements in the
job of key staff can be set up quicker, but more
than one in five business leaders (21 per cent) are
placing their faith in giving staff time off to pursue
their own innovation projects, anticipating the
external perspective gained during this activity
will add value to their organisation.
Favoured strategies for delivering innovation success in 2015
72%
30%
Pursue innovation
culture
Formal system
for ideas
26%
21%
Innovation in key
Staff given time for
staff job role own innovation projects
Impact Executives / IMPACT / Issue 31
15
BOOK REVIEW
THE BOOK REVIEW
OF BOOK REVIEWS
W
hat makes a great change leadership
book? Ever since 2007, when Impact
Executives started reviewing and
summarising key business publications
for its clients and interim managers, we
have been asking ourselves that very
question. Surprisingly there is no simple answer. In fact many
books on change leadership simply aren’t good at all – filled with
jargon, generic language and written by authors seemingly more
interested in word count than content. But every now and then
certain publications do stand out. So here we present our top
five books for change leaders, as well as a 200-word summary of
what their 2,000 pages of text really mean. If you are to read just
one business publication this year, make it this article!
IMPACT JOURNAL INSIGHT – WHAT WE THINK
The thread that runs through all these excellent books binds together the idea that effective leadership and planning
can balance the turbulence that environmental change brings at every stage of business development.
As Collins says, senior executives feel calmer today managing turbulence: “Not because we believe life will magically
become stable and predictable; if anything the forces of complexity, globalisation and technology are accelerating
change and increasing volatility. We feel calm because we have increased understanding of what it takes to survive,
navigate and prevail. We are much better prepared for what we cannot possibly predict.”
The authors of these books highlight many interesting examples of business leaders overcoming challenges,
managing monumental change and still delivering success. Partly they win because they have had some personal
luck but then utilised their skill to take advantage of an opportunity, but just as often victory is achieved through a
well-organised team, effectively led, applying a new perspective to overcome a stubborn problem.
Impact Executives has seen this approach work in many client organisations, delivering results time and again. When
interim executives enter an organisation and review a challenging situation in flux, their fresh eyes are often able to
help develop an immediate, clear and motivating action plan.
16
Impact Executives / IMPACT / Issue 31
BOOK REVIEW
The Heart of Change
by John P. Kotter and Dan S. Cohen
Synopsis
Real-life stories of how people change their organisations.
Best Bit Most people do not handle change well, mainly because they’ve had little exposure to
successful transformations – clear and strong leadership is required to deliver effective change.
Switch – How to change things when change is hard
by Chip and Dan Heath
Synopsis
If people have the ability to think logically, why do we find changing for the better so hard?
Best Bit: Based on psychologist Jonathan Haidt’s analogy ‘direct the rider’ – give very specific
goals that people can achieve, like ‘drink low fat milk’ rather than ‘eat healthily’.
Nudge
by University of Chicago academics Richard H. Thaler and Cass R. Sunstein
Synopsis
Improving decisions about health, wealth and happiness in business and at home.
Best Bit: The authors argue that effecting a change in behaviour depends on a coordinated effort by
managers influencing an often invisible myriad of stimuli to affect how employees embrace change.
Great by Choice
by Jim Collins
Synopsis: Explores why some companies thrive in chaos and uncertainty and others don’t.
Best Bit: The dominant pattern of history isn’t stability, but instability and disruption.
Therefore, managing the tension between consistency and change is one of the great
challenges for any enterprise.
The Success Equation: Untangling skill and luck
by Michael J. Mauboussin
Synopsis: Investigating how much skill or luck – and usually a combination of both –
contribute to results.
Best Bit: How one of the greatest computer programmers of all time, Gary Kildall, failed to
capitalise on an offer by IBM in the 1980s, opening the door to ‘second choice’ Bill Gates to
introduce his Microsoft platform.
Impact Executives / IMPACT / Issue 31
17
EXPERIMENTATION
THERE’S NO
SUCH THING AS
FAILURE, ONLY
FEEDBACK
Words: Gavin Hinks
M
anaging innovation is the talk
of academics and business
leaders alike. As technology
develops at an accelerated
pace, and digital businesses
like Facebook, Google or
Spotify dominate headlines, it’s no wonder that
corporate leaders across the world ask where
the next innovation is coming from to secure
competitive advantage.
In many places innovation is no longer the
preserve of techies in the lab; it has become the
focus for senior staff developing strategy. A study
from global professional services firm PwC in 2013
found that 79 per cent of the most innovative
companies have well-defined innovation strategies
while a huge 93 per cent of chief executives believe
organic growth through innovation would drive
revenues.
These insights raise two questions: how is
innovation achieved and are there enough leaders
around to do it?
18
Impact Executives / IMPACT / Issue 31
The answer to how innovation is achieved is
the subject of endless discussion but one of the
latest additions to the debate comes in a book
published last year, The Innovator’s Method, from
Nathan Furr and Jeff Dyer, both of Brigham Young
University. The pair conclude that the way to
“sustainable innovation” is through a four-step
process: generate insight of a customer’s problem;
deeply understand it; rapidly develop a variety
of prototype solutions; only build the business
model once you know what pleases the customer.
Through this process Furr and Dyer conclude
that the leader’s role in an innovative company
shifts to be one of coach and facilitator of quick
and low-cost experiments.
“To apply the innovator’s method requires a
new style of leadership. In the age of uncertainty,
leaders are no longer chief decision-makers.
Instead, they’re chief experimenters who
formulate hypotheses with their team, conduct
experiments, and let the data speak for
themselves,” they write.
Of course, this begs a question about the kind of personal qualities a business leader brings to the
process. One of the many complaints is that there are not enough people who can lead in a high-tech
environment, a domain driven by innovation. When global market researchers GfK surveyed business
leaders in London’s Tech City (an area promoted by the UK government as Britain’s nascent equivalent
to Silicon Valley) they were told by one e-commerce entrepreneur: “We’ve found sourcing world-class
C-level hires consistently challenging and have had to resort to relocating people from the USA.”
Corporate leaders are not unaware of the problem. In another study PwC finds that chief executives
are taking “personal responsibility” for innovation as it becomes “an ever more vital element of
business survival and success”. The firm’s report reveals that, among CEOs, “strong visionary business
leadership” and having the right culture to promote innovation are the most important ingredients for
successful innovation. Elsewhere though, people are asking where the leaders are in the tech sector or,
at least, why there seems to be a shortage?
Robert M Fulmer and Byron Hanson of Duke Corporate Education asked themselves the question
and concluded that part of the problem was personality types. Techies love data and detail and are
drawn more to designing new products than they are to managing people in teams.
PARADIGMS AND PRIORITIES
DESIGNING FOR DELIGHT
The big problem for companies is making
innovation something that happens on a
regular basis. Having just one big idea is not
enough. Competitors soon catch up. But how
do you make the inspiration come when you
want it? Understanding client needs, as Ola
Klingenborg makes so plain in his interview
here, is crucial. Intuit’s approach, cited by
Furr and Dyer, places the same element at the
heart of efforts to innovate. But it’s also worth
noting that Intuit does not appear to be trying
to reinvent the wheel each time it innovates.
The word "innovation" here means addressing
client problems. That could mean incremental
improvements to an existing product, not
necessarily new paradigms.
But there is a human element to
innovation: personal qualities in leaders
including, as Klingenborg puts it, having
the courage to take risks and getting beyond
narrow technical priorities. For data-driven
technical staff that may be an issue. Intuit’s
D4D solution aims to create a culture in which
people draw on those qualities to innovate.
For Furr and Dyer, the software developer Intuit
is a good example of a company moving to
integrate innovation into company processes
and leadership. By 2008, Intuit was struggling
and looking carefully at what was going
wrong. Execution, it found, was subordinating
innovation and changes were required. It
borrowed from design thinking and developed
a training programme dubbed Design for
Delight (D4D) with three principles: gain deep
understanding of customers; generate many
potential solutions before narrowing down
to successful options; experiment rapidly and
seek feedback early. Intuit organised forums for
thousands of employees to learn the principles,
appointed more than 200 D4D coaches (or
catalysts, as they became known) and assigned
them to projects. Despite the introduction of
the coaches, Intuit found it needed something
else and turned to “lean experimentation” ideas,
outlined by the writers Eric Ries and Steve Blank,
and began a series of “lean start-up” workshops
in which employees tackled a customer problem
and moved to experimenting with potential
solutions in two days.
“As managers were adopting ideas from
design thinking and lean start-up, they were
learning to systematically experiment their way
to success. Moreover, they began to create startup teams throughout the company that used a
similar process to that used by start-ups to bring
new products to market,” write Furr and Dyer.
IMPACT JOURNAL SAYS:
Innovation goals need to address both
the long-term strategic objectives of your
organisation and the short-term imperative
of solving your client’s problems.
IMPACT
JOURNAL
SAYS:
The personal
qualities of a
business leader
make a
transformational
difference to an
organisation’s ability
to innovate.
EXPERIMENTATION
TALENT
IMPACT
JOURNAL
SAYS:
Chief executives
need to regard
themselves as chief
experimenters.
Impact Executives / IMPACT / Issue 31
19
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