Managing Change

1. Managing Change Success Stories Watch This Video

2. British Airways • Back in 1981, Sir John King, later Lord King, was appointed Chairman of British Airways. • He was charged with bringing the airline back into profitability. While many other large airlines struggled, King was credited with transforming British Airways into one of the most profitable air carriers in the world. • To make the organization more profitable, this chairperson decided to restructure the entire organization. He realized that the best way to do this was through a change methodology management plan. • Systematically, the company began reducing its workforce. But, before this was done, through his change management leadership, the chairman gave the company the reasons for the restructuring and privatization of the company in order to prepare them for the upcoming change. • MANAGEMENT PRACTICE POINT: through leadership and communication, he directed his company through a difficult time that could have been disastrous without effective change management resistance communication.

3. Xerox • Ursula M. Burns, who had started as an intern became CEO of Xerox in 2009 • Copy machine technology had become old news. Ms. Burns' answer: in addition to printing equipment, sell companies services, like handling their business processes. • Ms. Burns led Xerox’s $6.4 billion acquisition of Affiliated Computer Services in 2010. • “I took over a company that was solid, but every day was becoming significantly less important in the minds of people,” Ms. Burns has said. • MANAGEMENT PRACTICE POINT: Burns initially tried to soften her blunt communication, but realized she was more convincing to herself and to the people who were listening when she actually said what she thought, versus what she thought people wanted to hear her say.

4. IBM • Former IBM CEO Lou Gerstner is an example of a high-profile outsider CEO who became an effective change agent • For Gerstner, the first order of business was making the company solvent. Under his guidance, IBM cut billions in expenses (partly through massive layoffs) and raised cash by selling assets. Gerstner says that few people even understood how perilously close the firm was to running out of cash. • Instead of breaking the company up as had been planned, he decided that the whole of IBM was greater than the sum of its parts. But, the parts were far-flung and operated independently, with little accountability. Rather than work together as a team, divisions competed against each other both internally and in the field. It is from this that we learn most about IBM’s transformation. Changing a culture is not easy. That is probably why so many once-great companies disappear. • MANAGEMENT PRACTICE POINT: Gerstner compiled a list of words and phrases, only used in the IBM vocabulary and had them eliminated them. • Even thought Gerstner was a fish out of water, he was rarely anything other than in complete command of the situationand has become known for tran

5. Tylenol • James E. Burke is the former Johnson & Johnson chief executive officer whose leadership during the Tylenol poisoning scare became a model for corporate crisis management. • In 1982 seven people died from cyanide-spiked capsules of Tylenol. Burke’s sure-handed response, from quickly recalling the product to reintroducing it with innovative, tamper-resistant packaging, inspired accolades and in 2003, Fortune magazine named him one of history's 10 greatest CEOs. • Burke was deeply influenced by Johnson & Johnson’s corporate credo, which stated that the “first responsibility” was to its customers and then to employees, management, communities, and stockholders - he reacted accordingly. • MANAGEMENT PRACTICE POINT: Burke used the crisis to transform the company into a model of ethical and transparent behavior.

6. 3M • Jim McNerneyCEO at 3M is an example of a high-profile outsider CEO who became an effective change agent. • McNerny had barely stepped off the plane before he announced he would change the DNA of the place. • His strategies included: • firing 8,000 workers (about 11% of the workforce) • intensifying the performance-review process • tightening the purse strings at a company that had become a profligate spender. • Implementing a Six Sigma program—a series of management techniques designed to decrease production defects and increase efficiency. The plan worked, McNerneyjolted 3M's beleaguered stock back to life and won accolades for the transformation MANAGEMENT PRACTIVE POINT: McNerney needed to change the culture of 3M by bringing discipline to an organization that had become unwieldy, erratic, and sluggish.