e-journal of Practical Business Research The Role of Leaders in Making Internal Transformation Projects Successful

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1 e-journal of Practical Business Research The Role of Leaders in Making Internal Transformation Projects Successful Patrick Bartl Published by the e-journal of Practical Business Research "Over the next couple of years, there will be winners, and there will be losers. And though it may be easy to see now, I believe we will see new leaders emerge who win not by surviving the storm, but by changing the game." (Palmisano, CEO IBM, 2009) The objective of this paper is to analyze the role and influence of leaders in and to current and future transformation projects. As transformation is a needed process in order to align the business strategy and orientation to the market needs, each company and every affected employee should be aware of possible upcoming issues and established methods to solve them. Without an appropriate reaction to the storm with new ideas, innovation, and transformation, it will be difficult to stay successful. Zitation: Bartl, Patrick (2010): The Role of Leaders in Making Internal Transformation Projects Successful In: e-journal of Practical Business Research, Ausgabe 10 (04/2010), DOI: /

2 Outline 1 Introduction Fundamental Aspects of Leader s Role in Transformation Projects Definition and Requirements Definition of Transformation Projects Difference between Internal and External Transformation Projects Definition of Change Leadership When is a Project Successful? Internal Barriers to Change The Coping Cycle of Change Roles of leaders in driving successful change Why are Leaders / Senior Management a Key Component? Overview of Leadership Roles in Projects Change Champion Change Sponsor Change Leader Change Agent Case study Sales Cadence Transformation Project Methodology NE IOT Sales Cadence Transformation Project Project Prerequirements Project Definition Project Timeline and the Role of Leaders Evaluation of Project Approach and Outcome Key Lessons Learned Critical Evaluation and Reflection List of Literature Internet Directory Appendix... 30

3 Abbreviation directory Abbreviation Declaration BIR CEO DIN GBS GM IBM IMT IOT ISCM NE IOT PMI SCIP SME SSL Business Integration Review Chief Executive Officer German Institute for Standardization (Deutsches Institut für Normung) Global Business Services General Manager International Business Machines Corporation Integrated Market Team Integrated Operating Team Integrated Strategy and Change Model Northeast Integrated Operating Team Project Management Institute Strategy and Change Internal Practice Subject Matter Expert Signature Sales Leadership

4 List of figures Figure 1 - Top ten success factors for projects... 4 Figure 2 - Major change challenges... 5 Figure 3 - The Value Proposition for Change Leadership... 6 Figure 4 - The Copying Cycle of Change... 7 Figure 5 - Learning and Course Correction Model of Transformational Change... 9 Figure 6 - Leadership behaviors and universal desires Figure 7 - Change Leadership Roles Figure 8 - The approach to the Sales Cadence Transformation Project Figure 9 - NE IOT Overview Figure 10 - To-be Cadence Design Principles Figure 11 - Project Timeline Figure 12 - Sales Cadence Transformation Project Building Blocks Figure 13 - Roles of leaders in the project Figure 14 - The ADKAR Change Management Model Figure 15 - Matrix of the three types of change... 31

5 1 1 Introduction In the current economical situation, characterized with a financial crisis and increased competitive and cost pressure, it is more than ever necessary to realign companies' organization and processes to the current and prospective business needs and market trends. This can help reducing insolvency, unemployment, increase employee motivation, promote a stronger market, and enable a better value proposition for the customers. Nevertheless there are a lot of barriers to do so. People are reluctant to change their current situation and environment, because in most of the cases it means to launch something with an uncertain outcome. A key component, particularly in business transformations, is to realize the need for change and to have an appropriate response. As Charles Darwin said, "it is not the strongest of the species that survive, nor the most intelligent, but the one most responsive to change." (Darwin, n.d.) To promote these transformations, strong leaders are needed to overcome the bureaucratic response of "we have always done it this way". Somebody having a high influence in the company has to set a vision for the future that supports a successful development. Motivated by the author s internship in IBMs Global Business Services (GBS) department of strategy and change for internal practices (SCIP) in Europe, this term paper is addressing the role of leaders, respectively senior management, in making transformation projects successful. More precisely, the analysis will be focused on the different roles leaders play in projects, why the support of leaders is a key component, and what happens if a project has a lack of leadership. Chapter 1 covers basic information regarding transformation projects and describes the key proof points to call a project successful. A theoretical insight into the role of leaders in driving successful change will be addressed in chapter 2. Subsequently, chapter 3 is about a case study in relation to IBMs current transformation of the internal sales cadence process. Afterwards, all findings will be summarized and evaluated critically.

6 2 2 Fundamental Aspects of Leader s Role in Transformation Projects 2.1 Definition and Requirements Definition of Transformation Projects The Project Management Institute (PMI) defines a project as [ ] a temporary endeavor undertaken to create a unique product, service, or result. (PMI, 2008) The German Institute for Standardization (DIN) additionally characterizes a project as an undertaking that shows its uniqueness through its objective as well as its temporal, financial, personnel and other limitations. (DIN, 2009) Usually the end of a project is reached when either the objectives have been achieved or the need for the project no longer exists. It is also common, that a project ends, when it becomes clear the objectives cannot or will not be met. (PMI, 2008) Transformation projects are characterized by their initial lack of clarity regarding the outcome. It emerges or is created through trial and error and continuous course correction. (Anderson & Ackerman Anderson, 2001) A transformation is a [ ] radical shift from one state of being to another, so significant that it requires a shift of culture, behavior, [..] mindset [ ], and/or business paradigm to ensure a successful implementation and sustainability over time. To overcome the unknown clarity of outcome, an advancement of trust and the willingness to change is needed to break through the old patterns and facilitate the transformation process. Supported and underpinned by a business process orientation, transformational change is the newest and most complex type of changing the business and its organization in comparison to developmental and transitional change. An overview of these 3 types of change is provided in the appendix on page 31. (Anderson & Ackerman Anderson, 2001) Difference between Internal and External Transformation Projects Today s common project management literature provides no or just a few information about the differences between internal and external transformation projects. For this reason, the following paragraph summarizes the findings of the realized interview with Carolina Brunn, IBM Senior Consultant and internal Project Manager, and Amir Taheri, IBM Consultant. The interview outline is enclosed in the appendix on page 32. Finding the right sponsor who is committed to the change and supporting the transformation team is especially challenging in internal transformation projects. Though internal transformation projects are characterized through the work with colleagues from a client and coworker perspective, the people have to be aware of the transformation. This is often a

7 3 critical aspect, because sometimes internal projects do not get the same level of attention in the company as external ones. That is why the transformation team has to keep attention on the employees understanding of the ongoing process and targeted outcome. The higher the management level of the sponsoring leader is, the easier it is to achieve the right level of mobilization and buy-in of the stakeholders. For instance, a project that is sponsored by the CEO of the company has of course a higher visibility and impact than a transformation targeting just a small unit of the business. In the latter case, a high significance of the project for the people manager can help to mobilize the people in its corresponding management line. Typically the project sponsor and the person funding the project are the same person. While internal projects are funded internally and therefore by the same company who provides the transformation team, the costs for external projects are undertaken by the client who is being consulted. Since the expenses taken for consulting services are pretty high, it is generally easier to get the right level of attention for these initiatives. Beside the explained differences, internal and external projects have in common, that the proven practices for successful project management can be used. In addition all transformation projects require the same roles such as a Change Agent, Change Sponsor, Change Leader, and Change Champion. Detailed information regarding these different roles of leaders are provided in chapter Definition of Change Leadership Change Leadership is the ability to energize groups who will be implementing change projects that they may or may not buy into. As this statement says, the special focus of change leadership is on the people who are responsible for the change roll-out and usage in the daily business. Change leadership itself is nothing that is written down. It is a soft skill of Change Agents, -Leaders, -Sponsor and -Champion to mobilize people for the transformation and get their buy-in. To be able to energize groups, it is firstly important to have a clear comprehension of what needs to be changed. Secondly it is necessary to show a positive attitude towards the future state in combination with empathy to remove ambiguity. Change leadership also includes the definition of change areas as well as the smooth and balanced management of change initiatives by anticipating, preparing, and effectively responding to roadblocks. This can only work in an open, receptive, and involved work environment at all levels to create a commitment to change. For the reason that cultural changes are a necessary component of most transformation projects, an effective change leadership is characterized by the understanding of cultural dynamics and the development of practical strategies to achieve the defined targets.

8 4 By the author s experience in IBMs major internal change initiative (case study in chapter 3), it is essential for a working change leadership to maintain good relationships with all projects stakeholders, especially the change team, in order to avoid psychological rejection, because this could prevent people from giving support and commitment. More explanations regarding change leadership will be given in chapter 2.2 and 2.3 by the importance of leaders and the separation of their different roles When is a Project Successful? Considering the fact that 24% of all business projects in 2008 are cancelled prior to completion or without usage of deliverables afterwards, the importance of strong and smart leaders is even higher. These results by the Standish Group, published in 2009, represent the highest failure rate in over a decade. Only 32% of the projects are concluded successfully on time, on budget, and with the required features and functions. (The Standish Group, 2009) For the reason that transformational change is the newest and most complex type of change, the explanation for failed projects respectively the requirements for a successful outcome should be analyzed carefully. Figure 1 shows the top ten factors to make a project successful. As this table demonstrates, the support of leaders is highly critical for the success of a project. With their change leadership, they can influence the involvement of stakeholders in order to walk the talk. The same results came up in the author s interview with Carolina Brunn. She said that it is crucial to involve the related functions early in the process to get their insights and buy-in, because in the end, they should live the changes and be committed to them. Success Factor Importance User Involvement 20 % Executive Support 15 % Clear Business Objectives 15 % Experienced Project Manager 15 % Small Milestones 10 % Firm Basic Requirements 5 % Competent Staff 5 % Proper Planning 5 % Ownership 5 % Other 5 % Figure 1 - Top ten success factors for projects Source: Hagen, 2007

9 Internal Barriers to Change The yearly Global CEO study in 2004, led by IBM Business Consulting Services, revealed that over 50% of the 456 interviewed CEOs worldwide perceived limited internal capabilities and leadership resources to manage change related projects as the top internal barriers. (IBM, 2004) In 2008, IBM asked again 765 CEOs respectively top managers about their opinion regarding major change challenges. As shown in the chart below, changing the mindset and the attitude as well as changing the corporate culture have been identified as the main obstacles to be overcome by leaders and employees. In terms of the role of leaders in making transformation projects successful, 32% asserted that a lack of commitment of the higher management is a crucial element in achieving the targets. These findings also reflect and confirm on the one hand the complexity of transformation projects as described in chapter and on the other hand the estimation of Carolina Brunn regarding the major issues in implementing transformations. [ ] You need their will and capability to change. Otherwise transformation will fail. (Brunn, 2009) She additionally agreed with 18% saying that a lack of transparency, because of missing or wrong information, is a major issue in implementing transformations. She emphasized the importance of a clearly defined vision to be followed by all employees to avoid such forms of misunderstanding or misinterpretation Change of IT systems Technology barriers Lack of change know how Lack of motivation of involved employees Change of process Changing mindsets and attitudes Corporate culture 49 Complexity is underestimated Shortage of resources Lack of transparency because of missing or wrong information 58 Lack of commitment of higher management % Figure 2 - Major change challenges Source: IBM, 2007

10 6 There is nothing worse than the willingness to change without the ability to do so. One fifth of the interviewees came to the conclusion that a lack of change know-how can be one of the main barriers to success. You need to educate the corresponding people. (Brunn, 2009) Without education and a certain level of knowledge transfer, people are not able to look beyond their personal boarders to develop their current state. All these conclusions are underpinned by the Prosci benchmarking report from 2003 where 288 project managers from 51 countries have been asked both the top five barriers to success and the top five contributors to success. A comparison of those findings is enclosed in following table. Top 5 barriers to success Employee and staff resistance Middle management resistance Poor executive sponsorship Limited time, budget, and resources Coporate inertia and politics Figure 3 - The Value Proposition for Change Leadership Source: Prosci Benchmarking Report, 2003 Top 5 contributors to success Effective and strong executive sponsorship Buy-in from front-line managers and employees Exceptional team Continuous and targeted communication Well-planned and organized approach to organizational issues

11 The Coping Cycle of Change Essential for the success of a transformation project and along with this the success of a leader is to understand and manage the Coping Cycle of Change to overcome the bureaucratic response of "we have always done it this way". The five different phases of this cycle are described and visualized below to be able to understand what kind of challenge every leader and transformation team has to take up. Active Emotional reaction (5) Internalization (2) Defence (4) Adaptation Stabile (3) Discarding time (1) Denial Passive Figure 4 - The Copying Cycle of Change Source: own graphic Denial Defence Discarding Adaptation Internalization This is the typical answer of employees when a new change initiative is being announced. They passively deny the need for change because of the unknown future. The second phase of changing an individual is characterized through a kind of active defence mode to defend their job, their responsibilities and power causing discouragement and frustration. There comes a time when employees embrace new ways. They notice the urgency to change and the consequences of reluctance and try to grow in their new environment. In this stage the stakeholders are trying to life their new culture, behaviors, and mindset in the daily business to satisfy their needs. The new behavior is becoming the normal state. As from this point, people definitely discard their reluctance to change. Otherwise a leader has to start activities to correct the situation. (Canadian Conference, 2006)

12 8 2.2 Roles of leaders in driving successful change Why are Leaders / Senior Management a Key Component? Howard Gardner, professor of psychology at the Harvard University and author of a couple of popular scientific books defines a leader as an individual who significantly affects the thoughts, feelings, and/or behaviors of a significant number of individuals. (Giuliano, 2005) Taking this statement as a basis, the focus of leaders impact relies more on soft skills than on technical knowledge or pure execution tasks. Commonly a leader has two main leadership orientations leading by creating fear and leading by giving trust. Whereas fear was a common option in medieval Europe to control the nation and save ones power, during the centuries, especially in the second half of the 20 th century, the democratic leadership style was rising. The understanding of employees changed from a mass product, that can easily replaced, to a valuable part of the company with individual skills and knowledge creating value for the customer. To be able to affect the thoughts, feelings, and behaviors of individual employees in a positive way, a leader is a key component in leading with authenticity and vulnerability, with discipline and tough empathy, with intuitive thinking, and decision making, and by playing people s strengths and respective differences. (Goffee & Jones, 2000) Without having a capable person being and feeling responsible for their employees, taking care of their needs, and making them feel as an integrated and valuable part of the company, it is impossible to provide motivation and commitment to having satisfied clients and achieving targets. In the global business environment today it becomes more and more important to refine and follow the given leadership competencies and to lead by example. If colleagues and other employees see their leaders as role models providing trust in their work, living the corporate values, and executing a democratic and interactive way of making decisions, then there is a basis for adapting those values, behaviors, and ways of collaboration, which will affect the whole company and perception by the public. Therefore leaders have the accountability in being a role model and a key in driving successful internal change initiatives with committed and motivated employees. For external transformation programs it is additionally necessary to have the same understanding on the clients side, who wants to change something. Leading through leading strategy and change, themselves, their people and teams, their organization and their results (Goffee & Jones, 2000), is key in executing the business, managing the issues,

13 9 reacting on current market trends and activities of competitors, and having an overview over the organization. Moreover the counter question could be asked, what would happen without having a leader acting as a role model? First of all it would cause insecurity and concerns, because as shown in figure 5 the journey of transformation is anything but a straight line. The process requires significant turns in the road [ ]. (Anderson & Ackerman Anderson, 2001) Every employee wants to have as much information as possible regarding their life in the future. This was also identified in chapter as one of the major internal barriers for successful transformations. Therefore it is necessary to have clearly defined short-, medium-, and long-term targets covering the personal progression as well as the further development of the company. Without having an understanding of the companies strategy and objectives, the staff is forced to feel insecure and unable to plan their future. Nobody would have an idea of the direction that is taken by the organization. When people react strongly to the unknown, their commitment and their performance level also become uncertain. (Anderson & Ackerman Anderson, 2001) According to this, it is impossible to represent the corporation with their products and services towards the costumer in a satisfying way while creating trustworthiness. Why should a client invest into products and services of a company that does not provide their prospective outlook and direction of challenging the business? Figure 5 - Learning and Course Correction Model of Transformational Change Source: Anderson & Ackerman Anderson, 2001 Taking away ideas from the introduction and the Coping Cycle of Change, it is essential for leaders to overcome the bureaucratic response of "we've always done it this way". For that reason a leader should give an idea of the future by providing a vision that describes the targets to be achieved. A leader with high leadership intelligence has a vision of the future, a reason for going there and the

14 10 cognitive capacity and emotional awareness and skill to attract, engage, and direct others toward that future. (Giuliano, 2005) To bring up an example, the CEO of IBM, Samuel Palmisano, announced in November 2008 the vision of building a smarter planet e.g. by avoiding inefficiency in the production, allocation, distribution, management, and usage of energy all over the world. Having this vision as well as the commitment, the further development of IBM is clearer for every employee strengthening IBM s services sector, developing new strategies to avoid the wasting culture of our planet, and increasing the engagement all over the world to help creating a smarter planet. From an internal perspective the value of the vision for IBMs employees is being confirmed by Amir Taheri, IBM Consultant. He perceives the vision as a very good one showing a leader who not just wants to have results, but who is living IBM s need to be a solution company coming up with innovative ideas that are worthy to be followed. Worse than reluctance to change is apathy that is not covered well by the Coping Cycle of Change. "Just tell me what you want done, boss, so I can get out of this place and on with my real life" (Clemmer, 2008). In this case it is crucial for a leader to understand the root causes of this attitude that prevents organizations from a successful implementation of the activities defined in the change roadmap. Afterwards a strategy is needed that causes a higher level of employees involvement to get their buy-in. Because once they are convinced that the transformation makes sense, they will see the benefits and their value out of it. One aspect that should be part of this strategy is the management of the stakeholders. If you do not have a good stakeholder management, people will lose their interest and will think that it is a loss of time. Otherwise you will not get the buy-in and will not reach a successful outcome. (Brunn, 2009) For that reason it is essential for leaders to give people the feeling to be needed and to be asked for their opinion before and during the change process. Nothing is more difficult to accept than a complete new working system and structure that were not influenced by the employees doing the daily business in the areas being transformed. All in all, leaders are responsible for creating the conditions for success. As figure 5 shows, it is essential for a leader to hear and heed the wake-up call that is caused by a mismatch between the organization and the needs of its environment. Activities that are deducted from such findings need to be clearly communicated to all stakeholders and ensured that this was understood correctly. Furthermore an encouraging climate must be shaped by leaders that support a successful accomplishment of the mission undertaken. Last but not least, there needs to be somebody who has the competence to decide which people should be taken as part of the transformation to facilitate and enable a successful outcome. (Giuliano, 2005) The following table includes a collection of leadership behaviors mapped to universal desires.

15 11 For Sustaining Energy and Mutual Commitment What is your engagement strategy for success? Dimension Universal Desire Leader Behaviors Connecting TO BE INCLUDED ON A WINNING TEAM Create inclusive environments that focus on interconnectedness and inclusion Humanizing TO BE APPRECIATED AND VALUED Create environments that honor the uniqueness and diversity of people, that support open communication and feedback, and that respect the value of each individual Optimizing TO BE SUCCESSFUL Create environments that are very dynamic and provide greater possibilities for people to strive for the impossible, to imagine the unimaginable, to dream the undreamable Interacting TO SHARE AND LEARN Create environments full of learning and sharing of knowledge and wisdom Catalyzing TO CONTRIBUTE Create environments that encourage innovation, creativity, and collaboration and the building of wisdom Expressing TO HAVE A RESPECTED LEADERSHIP VOICE Create environments where voices are expressed, not suppressed, and that support leadership development, encourage risk-taking, and provide opportunities to take on leadership and team challenges Synchronizing TO HAVE PURPOSE AND MEANING Figure 6 - Leadership behaviors and universal desires Source: Glaser, 2005 Create environments that honor the human spirit to achieve together and celebrate together and where mission and purpose drive the work

16 Overview of Leadership Roles in Projects Change Champion CEO Change Sponsors Initiative Leaders Change Leaders Executive Team Change Agents Manager, Supervisors, SMEs, Super Users Figure 7 - Change Leadership Roles Source: own graphic Figure 7 provides an overview of the different roles taken by leaders in internal transformation projects, starting with the Change Champion, followed by Change Sponsors and Change Leaders, right through to Change Agents. With this in mind, the responsibilities are shifting from a more conceptional and visionary focus to an implementation function to be able to realize the recommended actions. The project management team respectively transformation team supports all layers and gives advice through all transformation phases Change Champion To initialize a transformation project and to ensure a generic comprehension of the desired outcome, each change program should cover a strong Change Champion, mostly the Chief Executive Officer (CEO), providing the basic vision, the direction and the motivation to change. On the other hand, having this role means setting enterprise-wide priorities as well as inspiring the employees during the whole change procedure. Therefore the Change Champion promotes the change values and shows commitment to the vision. These are very important components to convince and motivate Change Sponsors, Leaders and Agents in order to ensure a successful continuation. To achieve optimal results, especially global companies should build up Change Champions at all organizational levels. (Rothwell, 2005)

17 13 A basis for the motivation of the employees is to be passionate about the change associated and the business benefits. To drive change enterprise wide, the CEO respectively General Manger has to have the organizational authority and power on the one hand and the commitment to lead throughout the change life cycle and the Coping Cycle of change as described in chapter on the other hand. One of the most important attributes, especially regarding organizational change, is the ability to understand and imagine complex organizations in the current and desired form. It is often easy to reveal weak points in a company, buts it is even more difficult to come up with a practicable solution or vision. (Steffen, 2000) Change Sponsor Change Sponsors, also called Change Supporters, are accountable within their respective area for the success of the transformation. They offer valuable support as initiative leaders in order to reinforce and sustain the change vision and resolve organization issues. Therefore they have to be visible as an active spokesperson for the program directing and empowering the Executive Team functioning as Change Leaders. The Change Sponsor continuously has to promote the change vision across the business and demonstrate personal commitment to the change. A lack of change sponsorship would jeopardize the achievement of the program milestones. Root causes for this consequence are explained in section regarding the key role of leaders. Initiative Leaders are able to understand business strategies and priorities through having the organizational authority and power to enact change in a specific area. One of the key attributes is the commitment to the change and associated business benefits in order to achieve employees motivation and engagement. For this reason, the Change Sponsor should be able to derive an adjusted version of the change vision to ensure a correlation with the corresponding business unit Change Leader The Change Leader has notable influence on the success or failure of a transformation effort. Operated by the executive team, they provide support and the necessary leadership for the design and a sustainable implementation of the change vision. (Rothwell, 2005) In consequence the declared mission of the Change Sponsor has to be translated into a tangible format for the stakeholders to ensure their understanding and create a basis for their commitment. Furthermore they are responsible for the alignment and mobilization of the organization for go-live. By identifying and addressing areas of resistance, Change Leaders should target a minimization of business disruption to facilitate a frictionless transformation. Another important objective is the compliance of the project milestones within the agreed time as well as a clear and effective communication between the project team and the organization. This promotes the awareness and recognition of the transformation primarily towards internal stakeholders and, in dependence on the project, also towards external clients and interested parties.

18 14 Due to the fact that each transformation initiative is causing influences on the involved employees and their environment, the executive team manages employee needs and expectations about the future. To be able to lead the change successfully, a precise understanding of the business unit operations and the employees company culture is needed. Accountable for the transformation results, the executive team needs to be influential and particularly receptive to change in order to appear credible towards the employees and colleagues. Additionally they should be solution-oriented and capable of overcoming resistance Change Agent Change Agents are accountable for change management and the development of high-performance organizations, teams, and individuals. (Rothwell, 2005) Finally there is the group of Manager, Supervisors, Subject Matter Experts (SMEs) and Super Users. As a kind of multiplier they are responsible for the communication of the vision to all employees. As mentioned in previously there are several barriers preventing employees to accept and execute the change. Change Agents model new behaviors, give feedback on organizational concerns and impact, and facilitate the acceptance and understanding of the transformation. In fact they enable local change initiatives required to go-live. For this reason, change agents need to be able to portray abstract ideas clearly and convincingly. Diplomatic and persuasive skills are required to act as a catalyst on others. However, to be able to manage the Coping Cycle of change successfully, they should have the right amount of stamina to be responsive to the development during the change process and to initiate activities to correct the current course as described in the Course Correction Model in chapter figure 5. (Steffen, 2000)

19 15 3 Case study Sales Cadence Transformation Project 3.1 Methodology The Transformation Project case study, used to show the importance of leaders in transformation projects, is a research study about a major IBM internal transformation project where the author took part in a supportive and consultative capacity. In form of a deductive approach, the confirmation or falsification of the theoretical statements in chapter 2 are explored in the following paragraphs. That means that the importance of leaders in making transformation project successful is analyzed from a practical perspective of the IBM Project. As already used in the previous chapters, a qualitative questionnaire was created to get an insight into internal transformation projects with all its issues and barriers, patterns and solutions. For this reason Amir Taheri, IBM Consultant and Project Member as well as Carolina Brunn, IBM Senior Consultant and Project Manager have been asked for their evaluation on the different areas of change. 3.2 NE IOT Sales Cadence Transformation Project Project Prerequirements We began a couple of years ago to transform IBM into a globally integrated enterprise - a transformation that entailed a restructuring of our operations to enable us to draw more efficiently on our global resources, and to capitalize on opportunities in emerging growth markets. (Palmisano, IBM CEO, 2006) Figure 8 - The approach to the Sales Cadence Transformation Project Source: own graphic Sales Cadence Transformation 2009 During the process to the Project Change Initiative, IBM announced in May 2005 the formation of grouped organizations called Integrated Operating Teams IOT. They were created by various Integrated Market Teams (IMTs) respectively countries of northeast and southwest Europe. During the years, the IOT administration has being grown and along with it also the needed time and costs. For this reason, in July 2008 a realignment of defined responsibilities between the IOT and IMTs was required.

20 16 Along the lines of those findings, Project Now/Next targeted in the same year a lean management system that reduced the amount of people allocated at the IOT level as well as the time used for IMT to IOT meetings Project Definition While Project Now/Next achieved a quantitative improvement, the Sales Cadence Transformation Project is declared as a pilot project and addresses the qualitative transformation of the Signature Sales Leadership (SSL) Cadence at the level of the Northeast IOT in terms of content, execution, responsibilities, behavior, culture, and leadership. SSL is a sales management system that uses a disciplined and structured sequence (cadence) of meetings to maximize sales and minimize wasted time and duplication. The NE IOT is defined as the managing layer between the northeast european countries (IMTs) listed below and the global IBM administration. Figure 9 - NE IOT Overview Source: own graphic The SSL Cadence today is constructed in a manner so that each and everyone from IOT to Global are executing the same stuff. (Frank Kern, Senior Vice President IBM Global Business Services, 2008) To say it in other words, everybody in the SSL chain is reviewing the same list of deals, requesting a status report and reviewing the closure of deals. In the eyes of the leaders and attendees, this is a waste of time and resources.

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