Three Australian experts in company transformation share their methods and describe the experience of watching CEOs making big – sometimes tough – changes.
Founder and Managing Director, Partners in Performance
Skipp Williamson begins every business transformation project with the same aim: to make her team redundant quickly. The Melbourne-based professional, who last year was named one of Australia’s five most influential consultants by The Australian Financial Review, says true change means rewiring the company so it’s easier to manage and can continually improve itself.
“Traditionally, consultants come in and beat the s**t out of a company; they emaciate it, disempower people and leave,” she says. “Three years later, they’re needed again. This is a dependency model. We’re trying to solve a very different question: ‘What is missing in your organisation that means you need to call in external consultants?’”
In every case, she says, what’s absent is a high-performance culture. “Companies without this tend to be lacking in top-to-bottom single-person KPIs to make priorities and performance transparent and timely. All organisations must be restless with the status quo. That requires a culture that’s really honest about how it’s performing and grinds out high-value improvements. Without this, shifts come as a surprise and surprise requires major transformation.”
Williamson (or one of her 500 consultants based around the world) begins by agreeing on an initial goal with the client, which is clear and outcome-focused – for example, save $100 million in costs or halve the time it takes customers to achieve what they want to do. Nebulous concepts such as “become a digital organisation” are not acceptable.
The consultant then meets with frontline and other staff to identify the main drivers they should focus on. It’s two-way; the staff also educate Williamson’s team about the business, their frustrations and ideas for improvements. “Typically, they’ll generate 50 or 60 ideas within an hour; within 10 days they’ll have prioritised several to achieve the goal,” she says.
Williamson, a former McKinsey & Company consultant who set up Partners in Performance in 1996, says pushback is usually minimal. “Resistance comes from not being part of the journey or not being listened to. We don’t set up a separate project office reporting to the CEO. That creates an alternate power structure and weakens the link between the CEO and the rest of the business.” She also makes sure the management team presents the agreed plan to the CEO or board. “It’s not about being the hero consultant – they have to own it.”
That includes tough decisions, such as the 44 per cent headcount reduction needed at one oil and gas client after a dramatic fall in the oil price. “Headcount is not usually the first lever we tackle but this was a survival turnaround,” she says, adding that 12 months later the company’s EBITDA had grown by more than US$250 million (about $350 million). “If we have to do it, we do it very fast – in this case, six weeks after we started. People want to be treated with respect and honesty. Months of delaying bad news is shocking; the organisation is paralysed. It’s inhuman.”
In tandem with assisting the organisation to deliver on agreed goals, Williamson’s team works on developing a high-performance culture – with clear reporting lines, the right data, KPIs and regular, frank reviews – so the company develops the skills to continually improve. This typically takes six to nine months. “We emphasise helping the client deliver rather than doing the work for them. Our focus is more on coaching and supporting the client to ensure the skills
are transferred and they are successful.”
Founder and CEO, Hislop Group
Sometimes, it’s not the whole – or even part – of a business that needs transforming. It’s just one person. That’s where executive leadership coaches such as Peter Hislop come into play. Having founded the Hislop Group in 1990, he specialises in teaching ASX top 50 CEOs and potential CEOs how to be better leaders.
At the first meeting, Hislop tells the executive three things: success as a leader is going to be very different to their previous success; they’ll have to make deep personal changes; and it will be the hardest thing they’ve ever done.
“You have to move them from the comfort of being a subject-matter expert and knowledge authority to being a leader,” says Hislop, a former lawyer who’s worked as an executive coach for two decades. He notes that careers are often built in silos, such as finance or marketing, and this is the hardest thing to alter. “For the past 15 years, they’ve worked very hard to be at the top of their game in their area. Their neural pathways are wired to be fast, decisive and right. Unless they can switch off the need to be right, they’ll fail as a generalist leader, which is what the CEO has to be.”
The first aspect Hislop works on is listening. Many people only hear what they agree with and wait for a gap in the conversation to jump in. Hislop sends his clients home after the initial session with a specific task: to ask their partner and any children over the age of 11 when they know that he or she has stopped listening to them. “Invariably their partner replies, ‘When I start talking about my day,’” says Hislop. “And kids always know when their parents have gone back to work in their heads.”
Next, he focuses on toning down their need to be right. “Leadership is all about saying, ‘I don’t know. What do you think?’ It’s not like pushing the buzzer on a quiz show – you have to allow discussion and get people to think deeply for themselves.” He has his clients practise asking open questions and listening without judgement and without having a solution. For one CEO, it took four months of him saying, “I don’t know. What do you think?” before his leadership team believed him.
As for the logistics, Hislop says he and the client meet a couple of times a week and also talk on the phone. Sometimes he walks with them to the Sydney Stock Exchange to remind them of their responsibilities. Or he’ll shadow them, attending every meeting they have for three days. Ideally, the process takes about six months but shorter, more intensive programs are possible.
“Coaching these days is all about making a transformational change,” says Hislop, adding that some clients initially reject the idea that they need to change because they feel no-one else is smarter or works harder than they do. “That doesn’t last long.” A typical response at the end? “That was the most difficult six months of my life but the most important.”
Co-Founder and CEO, We Are Unity
When Mars Food Australia general manager Hamish Thomson first met with Ben Bars, he was looking for a business transformation consultant who would push the company to think differently – even though Mars had just celebrated nine consecutive years of profit growth and topped 2017’s Great Place to Work rankings.
“Ben challenged us, in a good way, on a lot of things we’d hung our hat on,” says Thomson, adding that one of the executives present came away with what she called “a feeling of discomfort”. Bars had issued a blunt warning: change had to start with the seven-member leadership team. His questions included, “How are your leaders facilitating innovation?”
British-born Bars has an economics degree and co-founded We Are Unity in 2012. He says the executive’s initial discomfort is typical. “You have to start by being very clear about the gap between a company’s commercial aspirations – its purpose, vision, strategy and brand – and the reality. I say to them, ‘You want the truth here, right?’”
He tells senior executives – including the CEO – that they must be prepared to modify their behaviour, if required. “Not everyone wants to look in the mirror. Our research highlights who, not just what.”
He starts by surveying and interviewing staff members to pinpoint how their experience is affecting business performance. “We focus on their ability to perform and deliver on the business strategy – most organisations aren’t prepared to ask their employees this.” At one large financial enterprise, the CEO asked the leadership team if they believed the company had the right strategy. They all raised their hands. When he asked if they believed their people were committed to delivering the strategy, no hands went up.
A month after that first meeting with Mars Food Australia, Bars presented the results of 138 hours of research and responses to a culture diagnostic survey from 219 of the company’s 320 associates (as Mars calls its employees). For Thomson, the biggest surprise was that 90 per cent of respondents were committed to changing the way they worked to achieve better outcomes. The data confirmed that Mars Food Australia had a strong culture but needed to be more commercially focused. For example, one in three of the associates felt the company’s leaders didn’t effectively translate the business strategy to them.
Another surprise was that some of the things that made Mars a great place to work were holding it back. Its caring culture, for example, discouraged challenges to the status quo, while its passionate approach made the company very action-oriented – but some actions were not anchored in the business strategy.
That was in early 2018. Fast-forward a year and the futureproofing project is already yielding results. Bars has helped the company launch a three-year plan prioritising six areas, including facilitating innovation. He’s identified three cultural drivers that need more work, dubbed “commercial”, “committed” and “confident” (in addition to the existing ones: “passion”, “pride” and “caring”). Changes include improved tracking of new product development and communication from leaders.
Last August, the first “pulse check” on the reforms showed 80 per cent of associates now understand the company’s strategy and how it fits into their jobs, the speed of product development has more than doubled and mid-level leaders are increasingly being trusted to make decisions.
Thomson calls it a “fascinating journey” and says, “My biggest concern was that this would be seen as the CEO or HR leading an isolated agenda but it’s been embraced across the business.”
The results, Bars says, show the power of culture. The most common mistake, he believes, is for a company to fail to have commercial metrics attached to culture. For example, he asks executives whether they measure the pace of decision-making or the speed of change adoption. Usually, the answer is no. Another frequent problem that he identifies is the failure to connect frontline workers to the firm’s strategy so they understand how it applies to their work.
“Measuring and predicting human behaviour is at the core of every business transformation,” says Bars. “In 2019, the number-one question for every CEO is: ‘Are my people committed to delivering on the business strategy?’”