Tag Archives: business change

Fight Or Flight? How To React To Change

Curl up in a ball, or seize the moment – what’s the best way to move forward in a period of uncertainty and change?

One thing we know, given the past 18 months, is that dramatic political change leads to economic uncertainty. With protectionist sentiment rising, trade remaining stagnant, the US economy led by a skittish and unpredictable President, a host of unknowns around the Brexit fallout, European elections, abandoned trade deals and other shocks, it’s hard to know how to plan ahead.

Elevated uncertainty can lead organisations to perform the enterprise-level equivalent of curling up into a ball. Projects and investment plans are deferred, fewer workers are hired, risk-aversion goes through the roof, short-termism triumphs over long-term growth and earnings take a hit as consumers decrease their spending.

Three high-profile panellists debated this issue at PIVOT: The 10th Asia-Pacific CPO Forum, offering delegates some very different answers to the question of how to react to change. A consensus was reached, however, around one point – the importance of agility.

Giles Breault, Founder of The Beyond Group, shared this gem: “If you believe that necessity is the mother of invention, I’d say uncertainty is the mother of agility.”

A willingness to adapt and adjust

Agility must be encouraged not only at the process level, but at the senior and strategic level too. This means having the ability, and willingness, to change plans at a moment’s notice. Breault told the audience: “When you’re living in an uncertain environment, you need to constantly plan, revisit and do course corrections. Similarly, you need to demand of your suppliers that they’re doing the same thing.”

Does this mean long-term business plans are now unrealistic? It depends entirely on your approach. Companies that “set and forget” three, five, or even ten-year plans, and then stick doggedly to the path, will quickly discover just how rapidly those plans become obsolete.

Increasingly, best-in-class executives are those that possess a degree of flexibility in how their mind works, have a degree of empathy with their people and the market, and can remain confident in the face of ambiguity.

KPMG Australia Chairman Peter Nash said that “there are still many CEOs today who revert to rigid process and a doctrine of control in reaction to issues faced by the business. They draw the decision-making up to themselves and push down their commands. I expect in the future we’ll see a more agile form of CEO emerging.”

Breault also comments on this outdated method of reacting to change, and ties it to redundant leadership skill-sets. “Many executives are finding themselves in an uncomfortable position as they realise that the skills which landed them in their roles aren’t the skills that will keep them there. The very things they congratulated themselves on achieving won’t keep them employed.

“For example, of the fifteen major corporations we’ve talked to, a total of zero had a specific program for digitalisation. These organisations have no plan how to move ahead, which is absolutely stunning.”

Take responsibility for staying informed

Peter Nash told panel facilitator Keith Bird (MD, The Faculty) that CPOs need to take responsibility for informing themselves about changes on the horizon. “Read about the issue, talk to people in your network and find out how it will impact your business by discovering how it’s impacting other businesses. It’s important to have a high degree of personal responsibility when it comes to keeping yourself informed.”

Embrace change

Nash says organisations should make time to examine how they get things done. “Are they tied to rigid processes or to certain types of thinking, or have they moulded their organisation into something more fluid? Do they test new ideas, adapt to disruption and engage with the community? Organisations that are more adaptive will be far more successful than others.”

Looming disruption or inevitable change doesn’t have to be scary. George Boubouras, Managing Director and CIO of Contango Asset Management, had this positive message to share with Forum delegates facing change: “Challenge yourself and prepare for the exciting time ahead! Embrace the disruption with enthusiasm and look at how you can contribute to it.” 

Navigating The Changing Rules Of The Game In A World of Uncertainty

Change, change, more change and a hefty helping of uncertainty pretty much sums up the current regulatory landscape. Seal Software explore why winning the game has become more of a battle in an ever changing world.

Nothing sums up the current state of regulatory affairs quite like the acronym, VUCA.

V – Volatility 

U – Uncertainty 

C – Complexity 

A – Ambiguity 

The concept was introduced by the U.S. military towards the end of the Cold War and has since been used in reference to any conditions or situations that are, namely, volatile, uncertain, complex or ambiguous.

In a post-Brexit, ever-changing world, keeping up and complying with new regulations can be a constant struggle…

Change, change and more change…

Nothing could be more true about the regulatory landscape. This has become ever more apparent over the last year following the Brexit vote. Brexit is triggering the need to review and change currency and exchange rates, governing law and logistics terms within numerous contracts. Revisions to trade rules could also lead organisations to consider the impact on their business relationships. Proactive organisations are already starting their Brexit preparedness initiatives, and are realising it starts with a clear understanding of how these elements and many others are defined inside contracts.

The battle to understand new regulations

Of course, it’s not just Brexit. Changes in regulations in the financial services industry mean it’s a continuous battle to understand the new regulations, then implement them in the most efficient way possible by the stated deadlines to avoid penalties, fines, or worse.

The one global constant is the ever-growing strain this puts on financial institutions to keep up and comply. They must figure out how to comply with new rules and deal with potential reviews, and audits without adding disproportionate cost and disruption to the organisation.

Many regulations impact the way organisations make commitments or conduct transactions with their partners or customers. New and changing regulations require companies to find relevant contracts, review the affected language and identify excess cost, liabilities, risk and exposure that directly impact financial services organisations.

Only then can business decisions be made to revise or novate the contract, renegotiate commercial terms or terminate to avoid non-compliance. This has to be done for all affected contracts, which could be in the tens of thousands or more for some organisations.

Global regulatory bodies

Global regulatory bodies are enforcing mandates to better control the solvency and recovery actions of banks and lending intuitions in the case of future economic downturns. Several key mandates stem from the Dodd-Frank Wall Street Reform and Consumer Protection Act, signed in 2010 to reduce the potential for a recurrence of the recessionary economic conditions experienced in 2008 and 2009. The consistent theme across stress testing, “living wills”, vendor risk, and overall recovery and resolution mandates is that large financial institutions must have a clear understanding of their contractual relationships and obligations as a foundational element of compliance initiatives.

When organisations manage their contracts for regulatory compliance, they also get insights into the data to support critical business decisions and reporting. This may result in contract novation and repapering or restructuring, depending on the mandate, as well as allowing an organisation to meet changing regulatory mandates, in the best way possible. Managing risks & liabilities during changing regulatory & business conditions

The key to coping with change is agility

It’s critical for financial services organisations to remain agile. They need to have the ability to extract the appropriate data within an overwhelming amount of contracts quickly and without significant business disruption to manage risk, reduce liabilities and compete effectively during times of change.

Previously, when mandates changed, organisations would have to perform manual reviews as a part of their compliance initiatives, resulting in months or years of contract analysis and high costs. However, organisations can now reduce the burden of the contractual review aspect of their compliance initiatives. By using automated contract discovery, data extraction, review and analysis, up to 80% of their time can be saved, providing significant savings. This is critical when organisations are facing tight compliance deadlines and have to review and make strategic decisions on hundreds of thousands of contracts.

Using artificial intelligence and powered by an advanced machine learning framework, the automated solution can extract specific terms and provisions needed for regulatory compliance across all contracts. The framework can be taught by users to look for specific provisions and clauses.

What impact will IRFS16 have?

Let’s look at IRFS16, the new regulations for how leases are accounted for in financial statements. For IRFS16 compliance, all lease agreements need to be located and the impact of the change in regulation needs to be determined. Knowing which of your contracts are effectively leases can be challenging, and an automated contract discovery, data extraction, and data analysis solution will locate all contracts and centralise them in a repository.

The system can extract, gather and validate lease terms from the contracts by identifying which have lease provisions or language. This level of reporting helps business users understand the current environment and develop an optimal remediation plan.

This is just one example which demonstrates how financial services organisations can compete effectively in times of change. Complying with new regulations no longer needs to be such an arduous task.

Using an automated contract review and analysis solution can ensure compliance with global regulatory mandates and help manage the overall risk against defined targets. It can dramatically shorten the time and reduce the cost of contract reviews, as well as help model and analyse the business impact before any changes are made. This results in better decisions on the best ways to achieve compliance.

For more information on how Seal can help address regulatory compliance initiatives, please visit our website.

This article was guest-written by Seal Software, a leading provider of contract discovery. Seal Software uses artificial intelligence and natural language processing to help companies efficiently uncover what’s in their contracts.

The Business of Procurement’s Cultural Evolution

The business could benefit from seeing procurement’s value in a new light. The challenge is getting people to accept the change.

time for business change

In my previous article, I discussed the struggles procurement faces with the perception of its value. One of procurement’s key issues is that, in most cases, the cultural focus is on cost savings.

This driver is linked to the four key stakeholder groups that procurement must answer to – the CEO; business leaders; the supply chain; and the CPO.

Because culture is handed down from the CEO, the culture of savings flows down through the business and the supply chain. This can lead to business leaders and the supply chain attempting to bypass procurement. This is where the perception of value of procurement is critical.

However, all is not lost! With the stakeholder requirements in mind, we can propose an alternative cultural model that will drive benefit for all four groups, plus procurement itself.

Procurement’s Future Culture

The key change in the future culture, from the culture we have now, is that it turns the key drivers on their heads.

  • In the new structure the number one driver for procurement is the supply chain.

Procurement focuses on collaboration, innovation and becoming a customer of choiceThe relationship is built upon mutual benefit and trust. It involves procurement becoming a business partner and promoting the suppliers capabilities and successes.

  • The number two driver is the business leaders.

Procurement brings new ideas and opportunities into the business from the supply chain, resulting in procurement being recognised as a trusted advisor to the business. The business supports procurement’s focus on mutual success, collaboration and becoming a Customer of Choice.

  • The third driver is the CPO

The business leaders complement the CPO on the great value their team brings into other business areas. The business leaders desire procurement’s involvement in their areas of business and identify them as trusted advisors.

  • The final driver is the CEO

The CEO has heard about the added value procurement delivers into the business and the success it is achieving. The CEO’s main focus for procurement is to retain the value they are bringing into the business from the supply chain.

The Procurement department is still a cost centre, but cost takes second priority to the value being generated for the business.

By re-aligning priorities, we have created a culture that meets the needs, and addresses, all four groups. The new culture also takes procurement away from the perception of being price focused, to becoming a value add for its stakeholders and customers.

It is what, for many, has become the nirvana of what they desire procurement to become.

Where’s the Evidence?

The next question you may have is, how do we know this is the right direction?

Some of you may already know of Johanne Rossi who won CPO of the year 2016. In an article posted on Procurious website in June, Johanne talks about what she did to make her Procurement department a major success within the business.

Here are a few extracts from the article for you to think about:

  • “re-structuring…teams in new ways to better partner with stakeholders and supply partners” – we are seeing the first evidence of partnering with the business
  • “A procurement innovation manager has been hired to achieve benefits…such as finding new, mutual value with supply partners through innovation and efficiencies.” – the key word is mutual
  • “Building internal and external relationships, and developing stronger business and commercial skills.” – a focus on developing procurement’s commercial skills
  • “The entire focus for us is to become the customer of choice for our suppliers” – this is the killer quote. It underpins a model of building trust, collaboration and promoting joint success.

Johanne’s full article on Procurious can be found here.

Re-aligning Attitudes to Change

We have outlined a culture where many procurement individuals find themselves trapped today and offered an explanation why it occurs. We have gone on to provide an alternative model for driving culture and value, one that could bring significant benefits to both procurement and the organisation.

To undertake this re-alignment, it may require attitudes to change and potentially re-building supplier relationships. For some people this may be a step too far.

An alternative path is for procurement to remain as it is, but then don’t be surprised if your department becomes fully automated and you’re out of a job. You were warned!

To undertake this journey requires a re-assessment of procurement principles and drivers, with a greater focus on the desired outcomes from the engagement with all stakeholders.

Procurement has a magnificent opportunity to become a critical business function for an organisations success within 21st century markets. The question is, do you want to be a part of it?

“It is never too late to change. The issue is deciding if you want to.”

POD Procurement is a consultancy and advisory for Procurement Transformation. For more information, and to read more about the POD Model, visit our website.

16 Harsh Realities To Get Used To

There are some harsh realities in life and work that we just have to deal with. Here are some of the major ones.

Harsh Realities

For decades, our senior team and consultants at Boxchange have been studying the mechanics of business improvement – and how it can be best used in organisations to create significant and sustainable performance breakthroughs.

Along the way, we’ve learned a lot about achieving success that even the head down, hard at it kind of people don’t know about. There are some major realities that hold them and their organisations back.

I’d like to share what they are, and what to do about them.

Reality #1: The leadership style you needed during the recession is ineffective now.

Reality #2: It takes a lot of repetitions of behaviour to establish ingrained working habits.

Reality #3: More than half of people leave their boss, not the company – but they won’t tell you that.

Reality #4: Employee surveys tell you little about what’s really going on in your business or how your people feel.

Reality #5: Most of the money invested in learning and development in organisations is wasted.

Reality #6: Embedding new work habits or new ways of thinking doesn’t happen quickly just because you’ve got clever, or motivated people.

Reality #7: Just because people know what to do (because you keep telling them), it doesn’t automatically follow that they will do it.

Reality #8: Almost 70 per cent of change initiatives and new strategies fail to deliver the benefits promised because organisations fail to achieve real buy-in.

Reality #9: Many managers waste time and effort dealing with symptoms – not the causes.

Reality #10: Diversity and inclusion policies rarely translate into a diverse and inclusive workforce.

Reality #11: Department heads convince you they’re on track, but overall the company is behind plan.

Reality #12: The person you thought you hired isn’t always the one that turns up for work.

Reality #13: Recruitment companies can negatively impact your ability to attract the best quality talent.

Reality #14: It’s hard to create performance breakthroughs on your own.

Reality #15: Organisations that have “innovation” as one of their values or pillars rarely achieve it.

Reality #16: Many organisations embark on new initiatives and strategies without first assessing their capability to deliver it.

If some of the above are familiar to you it’s almost certain your organisation, department or team is not performing to the best of its ability.

If you need help to change some of the current realities I’d be happy to share some of our insights into what you and your team can do about them if you contact me.

Boxchange Limited has created a “one-stop-shop” for business change, transformation and improvement with their core services including consulting, leadership, diversity & inclusion, behavioural assessment, recruitment and interim placements.

Dear Boss, I Quit! Why Good Leadership is Key

Looking for the real reasons your staff are leaving? Instead of focusing on the ‘business’, you may want to take a look at your leadership.

I Quit - Leadership Key

This article was first published on Boxchange.

I’m sure that you, like me, are saddened every time someone in your team has resigned, (apart from the one or two rare exceptions when I have actually danced a celebratory jig around my desk, but that’s for another article!).

Mostly, my natural reaction has always been a human one I suppose. “Why would they do that?” or, “What’s wrong with them?” or even, “The fool must be leaving for money!”

But as the years rolled by I have become much wiser.

Lack of Leadership

Experience tells me that people don’t change jobs solely for money, and they almost never resign on a whim or in a fit of anger. People joined your company because they believed it was right for them, and they desperately want it to be right.

However, something, at some point, makes it wrong and if you are able to uncover their real reasons for leaving, and you should, you will find that it’s not ‘the company’ they blame. It’s not the location, or the team, or the database or the air-conditioning…

…it’s the leadership!

Of course they very rarely use that word. They may not mention management at all.

Instead they talk about “morale,” or say “communication is poor”, and, when they express frustration at the lack of clarity for their career progression, they are telling you that it’s the leaders they are leaving. After all, leaders are responsible for morale, communication and career path.

Discover the Real Reasons

And don’t be fooled by the results of your employee engagement survey – they rarely get to the heart of the matter. A ‘company’ is just a legal entity and a ‘business’ is simply a building containing a collection of desks and computers. No one resigns because of that.

It’s the decisions, the motivation, the atmosphere, the ethos, the support, the training, the vision, the inspiration and the direction set by the leadership that your employees will follow…or leave!

Take the time to have an honest look at your business or department without further delay. If you’re losing too many people, (or have high absenteeism), you need to discover the real reasons why.

If you’re not sure how to get to the root cause then ask. My colleagues and I are happy to offer our free advice, and it could transform your performance and results in 2016.

Boxchange offers a fully integrated business change solution that fits almost every conceivable change challenge your business may, or is currently facing. We focus on delivering value, return on investment & ensure effective knowledge transfer throughout.