leading culture change in global organizations part iii: emerging markets
TRANSCRIPT
Webcast Series:Part III
Emerging
Markets
Daniel Denison
Denison ConsultingAnn Arbor, Michigan
IMD Business SchoolLausanne, Switzerland
Leading Culture Change in Global Organizations:Special 3-Part Webinar Series
Part I: Getting Your Own House In OrderMay 31, 2012 11:00 am – 12:00 pm EDTThis webcast will focus on Supporting the Front Line and Creating Strategic Alignment by exploring successful change initiatives.
Part II: Crossing BordersJune 28, 2012 11:00 am - 12:00 pm EDTThis webcast explores the challenges companies face in ’Crossing Borders’ to build effective cultures.
Part III: Emerging MarketsJuly 19, 2012 11:00 am - 12:00 pm EDTPart III of this webinar series examines the challenges — and unique opportunities — of implementing culture change in an increasingly relevant context: Emerging Markets.
Daniel Denison’s best-selling book illuminates the cultural dynamics firms need to manage in order to remain competitive.
“A milestone in the culture studies arena.”
-Edgar H. Schein
Best Seller
Published June 26, 2012!
What Is It All About?
Supporting the Front Line
Domino’s Pizza
Creating Strategic Alignment
”DeutscheTech” & Swiss Re
Creating One Culture Out of Many
“Polar Bank”
Exporting Culture Change Across National Boundaries
”GT Automotive”
Building a Global Business in an Emerging Market
GE Healthcare China
Building a Global Business from an Emerging Market
Vale
Preserve&
Strengthen
Invent&
Perfect
Unlearn&
Leave Behind
Rethink&
Try Again
Good
Bad
Old New
Changing CultureBy Changing Rituals, Habits & Routines
GE Healthcare China
http://www.youtube.com/watch?v=yB47wx-b6sY
2002: GE acquired Datex-Ohmeda and entered the anesthesia business. DO was focused on the medium and high-end of the market.
2006: GE acquired Zymed (CSW), a family-run business in Wuxi Zymed had “adopted” their technology from Datex-Ohmeda.
“The organizational structure of Zymed was simple. It had dreams, but no long-term strategy. It had a culture of thrift. It also had good execution,
which was based on a transparent rewards system. In its ten-year history employees benefited a lot financially.”
2007: GE hired Finn Matti Lehtonen as General Manager of LSS in China He replaced Singaporean P.S. Sim, the original GM
“Sim was busily engaged in marketing and sales, He has no time for quality, operations, costs, or other issues.”
2007: Lehtonen, an engineer with over 25 years experience in China He built a team with long experience in GE Healthcare China A few key hires (engineering, sales) from the outside.
GE Health Care China:Entering an Emerging Market
GE underestimated the quality problems that they had inherited and had to stop shipping CSW machines. DO machines were high quality, but assembled at another, separate site in Wuxi. Engineers were too busy fixing quality problems to do the necessary product design work to replace the existing CSW products with new one.
“We have to put about 90% of our engineering resources on maintenance. If I could start from scratch and put 90% of the engineering resources on new product development, we could reduce quality issues by 80%.”
GE Health Care China:Entering an Emerging Market
Survey Results: Late 2007
Leadership Team Managerial & Supervisory R&D
Lehtonen decided to lead with vision. The goal was to inject a strong sense of vision, mission, and strategy into the organization and reshape the mindset of all employees. He held monthly town hall meetings that involved all 180 employees on site to discuss the vision and the strategy map for the organization and for each function.
The culture survey results showed that among the engineers, there were three major issues: lack of customer focus, limited sense of purpose, and little attention spent on capability development. They addressed this issue by sending each of their engineers into the operating room one day each year, to see their products in action.
“When I was in the operating room, the idea occurred to me that if the machine didn’t work, we could harm people. On the other hand, when the operations are successful, I feel proud of my job because I help save people’s lives.”
GE Health Care China:Entering an Emerging Market
Survey Results: Early 2009
Leadership Team Managerial & Supervisory
2008
2009
R&D
Leading with process was much harder. The organization had at least three different processes: GE Process, DO Process, and CSW Process. They involved very different mindsets:
“It seems no one realizes how much a good process means to engineers. My understanding is that a good process is like a signpost on the highway. With a good process, you’ll know clearly how to do things… Engineers are people who like to ask “why” and find the answer… But we have neither clear signposts nor people answering the question here… Sometimes you have to spend more than a day doing something that could be done in one hour with out the process.”
“The new GE process is developed based on US FDA requirements. Its level is just too high for our low baseline.”
“A lot of requirements come from EHS (environment, health and safety), HR Finance, and other functions. GE culture is very aggressive. You must close lots of things within a very short period of time.”
“We can’t use the DO process as it doesn’t have a supporting system here. But the new process is not clear. When you get lost with the process and ask someone else, it seems no one knows the direction.”
GE Health Care China:Entering an Emerging Market
Lessons for Leaders
Leading with vision is powerful
Operating in the cultural context
Speed of change
Subcultures are everywhere
Acquiring a competitor
Vale
Culture Change at Vale: 2000-2006
Clear vision Professionalization Standardization of processes and KPI’s Creation of Valer International expansion: Exploration
2006 Culture Survey Results: Vale
2006 Culture Survey Results:Vale vs Inco
Culture Change at Vale:2006-2008
Professionalization Standardization of processes and KPI’s Valer Leadership training: MIT and IMD Management Board Strategic Retreats Greenfields International expansion: Exploration and commercial Leadership forums Hiring from the outside
2008 Culture Survey Results:Vale
2008 Culture Survey Results:Vale & Inco
Lessons Learned
1. Put your internal house in order. Create a professional culture with a “One Company” feel.
2. Going global from an emerging market requires a careful balancing of a professional, empowered culture with a core of central decision-making.
3. The impact of a hard-driving and visionary CEO to move from decentralized fiefdoms to a professionally run company cannot be underestimated.
Leading Culture Change in Global Organizations:
Special 3-Part Webinar SeriesPart I: Getting Your Own House In OrderMay 31, 2012 11:00 am – 12:00 pm EDTThis webcast will focus on Supporting the Front Line and Creating Strategic Alignment by exploring successful change initiatives.
Part II: Crossing BordersJune 28, 2012 11:00 am - 12:00 pm EDTThis webcast explores the challenges companies face in ’Crossing Borders’ to build effective cultures.
Part III: Emerging MarketsJuly 19, 2012 11:00 am - 12:00 pm EDTPart III of this webinar series examines the challenges — and unique opportunities — of implementing culture change in an increasingly relevant context: Emerging Markets.
Free, in-person
speaking event by
Dan Denison3
00
Books
Special Offers
FREE Denison
Consulting e-Workshop2
5 B
ooks
Free, live webcast by
Dan Denison1
00
Books
Denison Consulting clients who bulk order Leading Culture Change in Global Organizations can
receive these exclusive, limited-time offers!
Price per book: $30.00
Webcast Series:Part III
Emerging
Markets
Daniel Denison
Denison ConsultingAnn Arbor, Michigan
IMD Business SchoolLausanne, Switzerland