Strategic Change LeaderMM Eksekutif – 46

Tjahjono Soerjodibroto14 Augustus, 2010

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CHANGE FOR BUSINESS SURVIVAL

• Industri Telekomunikasi: operator, hardware supplier

• Industri Infrastruktur: PLN• Industri Airline: budget airline• Industri Mobil: hybrid car• Industri Peternakan: integrasi• Industri Farmasi: obat generik,

kemasan• Industri Perbankan: UMKM• Industri Pertanian: organik, bio-fuel

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Total Kredit dan Kredit UMKM Per-Bank

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Sumber : Biro Riset InfoBank (birl), 2008

Tahun 2007

Tahun 2008

-20.000.000 40.000.000 60.000.000 80.000.000

100.000.000 120.000.000 140.000.000 160.000.000 180.000.000

(Jut

aRu

piah

)

Kredit yang diberikan Total kredit UMKM

-

20.000.000

40.000.000

60.000.000

80.000.000

100.000.000

120.000.000

140.000.000

160.000.000

180.000.000

(Jut

aRu

piah

)

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Pertumbuhan Total Kredit UMKM dari Tahun 2007-2008

Sumber : Biro Riset InfoBank (birl), 2008

28,7%

5

Rata-rata pertumbuha

n kredit UMKM

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Right Thing Wrong Thing

DoneWell

DonePoorly

RightProducts/Services

Death Trap DetourBusiness

Adjustment/Recovery

•Target market•Products/Services•Technology•Cost Structure•Competency, etc

Business Challenge Matrix

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What is your reaction and response?

NORMAL CONDITION (happen gradually):

A. Anticipative, orB. Unaware / Neglected and Denying

GLOBAL CRISIS (taken by surprise):A. Quick response thru Restructuring

and Alignment, orB. Denying and think we are still OK

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STaRS Model

Michael Watkins, The first 90 days

Reallignment

Sustaining-success

Turnaround

Start-up/New S-curve

DivestGagal Berhasil

Gagal

Berhasil

Gagal

Gagal (Start-Up)

Berhasil

Berhasil

Gagal (New S-Curve)

?

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UNDESTANDING THE CEO MIND

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Driver for Change from CEO perspective

Is there enough

market to grow?

CEO

Should we stick with the

current business

only?

Will share-holders agree for additional

capital?

Is there any other

alternative?

Should we go for IPO?

Can we enter new

markets?

Can we differentiate?

Should we form alliances

or acquire?

Do I know my customers?

Customers will have a

choice

Impact of the coming

deregulation?

How should we finance the expansion

plan?

Shareholder expectation?

Is my organization structured to

evolve?Should we continue to support low end market?

Are we ready to enter new business?

Who are my competitors?

Do I have the right team to cope with this

change?

New market opening up

Should we expand or diversify

Will they support our

new expansion

plan?

What should it look like? How fast?

How should roles be defined? How can we

restructure the cost?

Should we apply cross-

subsidy?

What should I do about my

cost of capital?

Can I compete?

Where should I source

future funds?

What will be needed for

preparation?

Is there enough market

opportunity? That I do know

How can I motivate and get commit-

ment?

That I don’t know

Can the business

evolve fast enough?

Can we lock our

customers?

New geographies

What do they want? Can we

compete?

Existing and new markets

Impact of new technology on

my cost base?

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Driver for Change

Organization Capital

Information Capital

Human Capital

TeamworkAlignmentLeadershipCulture

•Supply•Production•Distribution•Risk Management

Operation ManagementProcesses

•Selection•Acquisition•Retention•Growth

Customer ManagementProcesses

•Opportunity ID•R&D portfolio•Design/develop•Launch

InnovationProcesses

•Environment•Safety and Health•Employment•Community

Regulatory and SocialProcesses

Price Quality Availability Selection Functionality Service Partnership Brand

Product / Service Attributes Relationship Brand

Customer Value Proposition

Long-TermShareholder Value

Improved CostStructure

Increased AssetUtilization

Expand RevenueOpportunities

EnhancedCustomer Value

Lea

rnin

g

and

Gro

wth

Inte

rnal

Pro

cess

Cu

sto

mer

Fin

anci

al

Productivity Strategy Growth Strategy

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Business Process in Monetary Terms

MONEY TALKS ! PEOPLE LISTEN !

Source: Chase, et. al

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UNDERSTANDING THE CONSQUENCES

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DELAPAN LANGKAH PERUBAHAN

• Kita Harus Segera Berubah!• Membangun Koalisi• Merumuskan Visi dan Strategi Perubahan• Mengkomunikasikan Visi dan Strategi• Memberdayakan Setiap Orang• Ciptakan Kemenangan-kemenangan Kecil• Menjaga Keberhasilan• Membangun Budaya Baru

APAKAH SUDAH DIANTISIPASI KONSEKUENSINYA?

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ChangeChangeManagerManager

AsAsDirectorDirector

AsAsNavigatorNavigator

AsAsCaretakerCaretaker

As Coach/As Coach/NurturerNurturer

AsAsInterpreterInterpreter

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Characteristics of four different types of Change:

Change typeExpenses of

single exerciseLength of each

exerciseAmbiguity of

results

Continuous process improvement

Clearest Shortest (could be days)

Smallest

Process revolution

Product/service improvement

Strategic changes Largest Longest (could be years)

Most ambiguous

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Change Must be Complete

• Compelling Reason for change• Vision, Direction and Blessing• Champion and solid change team• Infrastructures and interactions• Supporting systems

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Huawei’s Management TransformationHuawei’s Management Transformation

CEO’s wisdom:

Be prepared since winter is coming

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Huawei’s Management TransformationHuawei’s Management Transformation

Huawei’s Value Transformation

China-based

Strong innovation ofProducts & solutions

Low cost R&Dresources

Leading supplier inemerging market

Global delivery capabilitieswith speed to market

Brings the best TCObenefits to customers

World class managementpractice

Widely accepted byhigh-end markets

Fully audited by multi-National operators

High quality, reliability& large-scale deployment

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Huawei’s Management TransformationHuawei’s Management Transformation

Huawei works with top management consultancies to bringWorld-class expertise to the company

IBM consulting

Human Resources & ESOPHayGroupTowers Perrin

PriceWaterhouseCoopers

IBM consulting

Integrated Product Developmentand Integrated Supply Chain

Financial Management

Quality Control

Organization Transformation

FhG

M E R C E R

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Customer Touch PointsCustomer Touch Points

Layanan ke customer dapat melalui beberapa service area :

Pre-journey Pre-flight In-flight Post-flight Post-journey

Layanan ke customer dapat melalui beberapa service area :

Pre-journey Pre-flight In-flight Post-flight Post-journey

Pre-journeyPre-journey

Pre-flightPre-flight

In-flightIn-flight

Post-flightPost-flight

Post-journeyPost-journey

1. Website (DQ) 2. Call Center (DE) 3. Sales Office (DI) 4. GFF Center (DI) 5. Service Center (DI) 6. Ticket Sales (Airport) (DF) 7. Customer Service Desk (DI) 8. GFF Membership Service (DQ) 9. Check-in Service (DN) 10. Transfer Service/Desk (DF) 11. Executive Lounge (DF) 12. Boarding Gate (DO)13. Cabin Service (DN)14. Cabin Comfort (DE)15.Lavatory (DE)16.Onboard Catering (DN)17.In-flight Entertainment/IFE (DN)18.Amenity Kit (DE)19. Sales on Board (DF)20.Arrival Assistance (DO)21.Baggage Delivery (DO)22. Lost and Found (DO)

23.Customer Affairs (DQ)24.Loyalty Program (DQ)

SustainableGrowth

2010+Competitiveness & Expansion

To Intercontinental

2008• Finalize debt

restructuring, start of privatization

process• Improvement in

product and

service

2009• Domestic/

regional competitiveness

& expansion• Effective Privatization

Focus on Turnaround 2008 - 2009

2006 Consolidation 2007 Rehabilitation

• Cost efficiency/revenue improvement• Reduce negative cash flow

• Pre arrange routes• Capital injection approved by government

• On going debt restructuring• Product & service enhancement

• Cost efficiency/revenue improvement• Positive cash flow/strengthen capital base

Strategy Map

Sur

viva

l

Tur

naro

und

Gro

wth

Revenue Growth

Increase Traffic

IndonesianHospitality

Best ValueFor Money

IndonesiaCulture/Service

Sharpen Segmented

Pricing

HighProductivity

ProfitableGrowth

Recruit NewStaff with

Right skills

ValueFor Money

AcquireNew Aircraft

ManageChannel

Effectively

On Time

Convenience

Safety

Reliable &Competitive

Reliable

AssetUtilization

OptimizeSubsidiaries ofIncrease value

BrandImageHealthy Capital

Structure

FLY - HI

ExpandNetwork

Effectively

Reliability

CostEfficiency

AssuredAircraftSupply

Well PlannedMaintenance

IncreaseResourcesUtilization

HighMotivation &

Discipline

ConserveFuel

SynergyWith Operation

ProcessStreamlining

ReduceWaste

SupplierSLA

ChangeCulture/Mind Set

DevelopLeadership/

Managerial Skills

ConclusiveWork

Environment

Reliable &Effective IT

Advertising Subsidiary

DomesticInternational Cargo Chartered/Hajj

Lear

ning

& G

row

thP

ersp

ectiv

eIn

tern

alP

ersp

ectiv

eC

usto

mer

Per

spec

tive

Fin

anci

alP

ersp

ectiv

e

1. Restrukturisasi Keuangan (Debt Restructuring Completion)

2. Restrukturisasi Neraca (Balance Sheet Restructuring)

3. Restrukturisasi Organisasi dan Human Capital (Organizational & Behavior Restructuring)

4. Reliability dan Keselamatan Pesawat (Aircraft Reliability and Safety)

5. Kenyamanan Pesawat (Aircraft Comfortability)

6. Meningkatkan Kualitas Pelayanan (Service Quality)

7. Konsep Baru dan peningkatan Kapabilitas Pemasaran (New Concept and Enhanced Capability of Marketing)

8. Image Recovery

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The most demanding part of company reform was to change the mindset of the middle management. The reason for this was simply that changes proposed by the senior management were acclaimed by the ordinary staff, while for the people in the middle, the changes meant that they would either lose something or be forced to make some changes. Therefore, the most challenging part was to transform the attitudes of the middle management.

Louis V. Gerstner Jr., the former CEO of IBM

Problem with middle management?

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Remember Pendulum Effect

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7-S McKinsey

SHAREDVALUES

SKILL

STAFF

STYLE

STRATEGY

STRUCTURE

SYSTEMS

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UNDERSTANDING THE REJECTION(THE PSYCHOLOGY OF CHANGE)

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INN

OV

AT

OR

S

EA

RL

Y A

DO

PT

ER

S

EA

RL

Y M

AJ

OR

ITY

LA

TE

MA

JO

RIT

Y

LA

TE

AD

OP

TE

RS

DIE

HA

RD

S

# OF PEOPLE

TIME

People and Change

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Stakeholders = Customers

Executive, CEO

Transform the business

Leads in the competition

Reduce Cycle TimeStay nimble and

innovative

Line Manager

Make my numbersIncrease customer

satisfactionBetter controls

Stamp the competition

Training/HR Manager

Get them trained Cut cost

Satisfy the user department

Meet my plan target

Worker/Learner

Improve my skillEarn more money

Keep at leading edgeSimple procedure And not confusing

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Every individual are different…. Different treatment is the logical consequence…

Not AbleNot Able

Not KnowingNot Knowing

Not Not WillingWilling

Communicated and Involved

Educated and Trained

Counseled, Incentives, Special Treatment

Douglas K. SmithTaking Charge of Change

Emotional Responses to Corporate Changes

• Denial The ‘It won’t happen’ syndrome• Fear ‘When will it happen?’ ‘What will happen to

me?’• Anger ‘We’ve been sold out’ - Resentment towards

those considered responsible• Sadness Mourning and grieving for what’s past• Acceptance Recognition of futility - positive approach

starts to develop• Relief Things actually better than expected• Interest Increasing feeling of security• Linking Recognition of new opportunities• Enjoyment ‘It is really working out well’

How long and when it’ll be finished?

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FOUR KINDS of COMMITMENTS at FOUR LEVELS

SPIRITUAL COMMITMENT

INTELLECTUAL COMMITMENT and EMOTIONAL COMMITMENT

INTELLECTUAL COMMITMENT orEMOTIONAL COMMITMENT

POLITICAL COMMITMENT

CommittedHumanEnergy

Source: DICK RICHARDS, The Art of Winning Commitment

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RELA - PAKSA

• DIPAKSA untuk BERUBAH agar menjadi TERPAKSA

• Karena TERPAKSA harus BERUBAH, maka menjadi BISA BERUBAH

• Setelah BISA BERUBAH, lama kelamaan menjadi BIASA dengan yang baru

• Karena sudah menjadi BIASA maka tidak akan merasa ada PERUBAHAN

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PENGALAMAN PENERAPAN PERUBAHAN: BIOFARMA

• Sense of Urgency– Delisting dari WHO, Okt 2004

• Visi: – Rubah budaya indoor ke outdoor

• Upaya:– Pengenalan Budaya di luar industri farmasi– Benchmark ke industri farmasi lain– K/s dengan pihak asing

• Short wins:– Kepercayaan Arabio, Japan Polio Research, Bexter– Diakui kembali oleh WHO, Okt 2005

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PENGALAMAN PENERAPAN PERUBAHAN: PEGADAIAN• Sense of Urgency

– Pegadaian sebagai ukuran kemiskinan• Visi:

– Menjadi Lembaga Keuangan yang modern & dinamis• Upaya:

– Perbaikan sistem keuangan, sdm, logistik– Benchmark ke perusahaan lain– Perbaikan citra– Budaya: “Merasa Dibutuhkan” ke “Kami

Membutuhkan Masyarakat”– Pertumbuhan adalah harga mati

• Short wins:– Hasil audit Wajar Tanpa Syarat pertama kali– Logo dan tampilan baru kantor Pegadaian– Motto “Melayani Masalah Tanpa Masalah”

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PENGALAMAN PENERAPAN PERUBAHAN: WIJAYA KARYA (WIKA)• Sense of Urgency

– Persaingan antar BUMN dan dengan swasta

• Visi: – WIKA STAR 2010, Menjadi Pelopor di Jasa Konstruksi

• Upaya:– Rubah pendekatan Human Resources ke Human apital– Karyawan sebagai aset untuk didorong “Kekuatannya”– Penerapan gaji dengan sistem merit, komponen

insentifnya lebih besar– Kultur Paksa Rela: Dipaksa agar jadi Terpaksa; Karena

Terpaksa jadi Bisa; Karena Bisa alkhirnya jadi Biasa– Penerapan NLP

• Short wins:– Prestasi meningkat secara bertahap

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PENGALAMAN PENERAPAN PERUBAHAN: PENGAWAS BANK INDONESIA• Sense of Urgency

– Banyak bank bangkrut setelah krismon, BLBI jadi beban

• Visi: – Perubahan dalam Good Governance secara timbal

balik BI dan industri• Upaya:

– Pengawas: “Know your Bank”– Bankir: “Know Your Customer”– Pengawasan: dari “compliance based” ke “risk based

approach”– Benchmark: konsep baik dari satu bank dijual ke

bank lain– Kebijakan BI: dari Top Down (pemikiran BI semata)

ke “diwacanakan” dahulu ke pasar– Penerapan kewajiban sertifikasi “Risk Officer” untuk

tiap bank dan diulang/update

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PENGALAMAN PENERAPAN PERUBAHAN: SEMEN GRESIK GROUP• Sense of Urgency

– Saling berebut pasar padahal harus hadapi Kompetisi luar• Visi:

– Defragmentasi untuk tingkatkan margin & cegah over-supply

• Upaya:– Restrukturisasi– Perbaikan Revenue Management, Cost Management dan

Utilization– Menghapus iklim “silo”– Penerapan KPI yang jelas– Motto: “Lakukan dari sekarang, lakukan diri sendiri, dan

lakukan dari yang kecil”• Short wins:

– Progress dari Restrukturisasi– Peningkatan profit melalui efisiensi dan harga saham– Persetujuan Rencana Pabrik baru– Persetujuan Rencana Power Plant

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PENGALAMAN PENERAPAN PERUBAHAN: KORAN TEMPO• Sense of Urgency

– Distribusi ke Agen telat sehingga sering ditinggal• Visi:

– Menjadikan bisnis Koran Tempo sebagai “cash cow”• Upaya:

– Menghilangkan mitos ”cetak tengah malam”– Ubah jam kerja Redaksi sehingga bisa naik cetak jam

23– Adakan Piket (hanya 5% dari Redaksi) untuk

tampung bila masih ada berita malam yang penting (meledak)

• Short win:– Koran Tempo tiba di Agen paling pagi– Oplag di beberapa lokasi naik 2 kali

• Tantangan Baru:– Pesaing bayar Agen untuk menahan Koran Tempo

Hope this sharing is a useful session