strategic change management addl analysis 090710

LONDON • NEW YORK • WASHINGTON • SEATTLE •LOS ANGELES • SAN FRANCISCO • HONG KONG • DUBAI

STRATEGIC CHANGE MANAGEMENT

JULY 2010

INTERIM RESULTS

METHODOLOGY- INTERIM DATA

© P E N N , S C H OE N & B E R LA ND A S S OC I ATE S2

• PSB is targeting 550 online interviews with HR and Communications decision makers across 10 markets. This interim presentation has the results for the initial 467 interviews:

• France, n=50• Germany, n=51• Italy, n=50• UK, n=50• Spain, n=50• Switzerland, n=36*

• HR and Communications decision makers are defined as:• Aged over 25, • Full time or self employed/business owner,• Have final or significant decision making power in their business, in particular relating to HR,

Communications, or across the organisation as a whole

• The interviews were conducted from 7 May 2010 – ongoing

• The margin of error for the interim data is +/- 4.6% for the total sample and greater for subgroups

*Due to the nature of these smaller markets, the maturity of their market research market, and the amount of professionals and companies that match our screeners, fielding has been slower. We are continuing to with our sampling departments and external vendors to reach a full sample

• Denmark, n=51• Finland, n=50• Norway, n=29*• Sweden, n=50

EXECUTIVE SUMMARY• 85 percent of companies have experienced a strategic change in the past 5 years

• Nearly 50% have experienced several changes over that same period

• Top 3 types of change experienced are: organizational restructuring, taking a new strategic direction, and downsizing

• The economic climate is having a significant impact on number of changes companies are experiencing and over half of companies anticipate changes to continue

• For those who are feeling the effects of the recession most, they are much more likely to be experiencing more difficult changes (e.g. downsizing, relocations, crisis)

• Not all decision makers agree on what strategic change means, which ultimately affects the way that they approach the change (e.g. the way they plan, communicate, and follow through on the change)

• Internally initiated changes, such as new strategic direction, missions or values, are most likely to be seen as strategic changes, not downsizing

• Only 1-in-5 see downsizing as a strategic change, though it is the third most common change amongst those interviewed

3

EXECUTIVE SUMMARY• Most companies are not handling their change processes very effectively

• Around 1 in 5 say their change process was not effective, and only a similar amount say very effective

• The majority of decision makers feel goals, scope and expectations of changes are not effectively communicated

• Decision makers think it is most important for strategic changes to be communicated internally, starting with leadership, but lack of communication with all employees throughout change process continues to be a key barrier to success

• Employees are most often told of change once it is happening

• Less than a quarter are engaged in the earliest goal setting and scoping phases of the strategic change, and even fewer are engaged post-execution

• While decision makers also believe having a change plan in place in advance of strategic changes is important, only half have one

• Those who have been through effective change processes in the past were twice as likely to have had a plan in place before the change process started

4

EXECUTIVE SUMMARY• Companies identify key requirements for effective changes, but have trouble

executing them

• Timely decision making and strong employee comms are considered critical to ensuring changes are successful, though decision makers admit their companies are not very good at these things on a day-to-day basis

• Just 18% say they are good at engaging employees on a day-to-day basis

• Factors concerning the progress of the change, such as communicating progress, measuring progress, managing expectations or celebrating progress, are seen as less critical

• However, those who have been through effective change processes are more likely to see the value in setting goals, measuring progress and true employee engagement/dialogue

5

EXECUTIVE SUMMARY: IMPLICATIONS

• There is a clear opportunity to help companies…

• Improve internal communications and dialogue on a day-to-day basis, before they are facing a strategic change;

• Better identify strategic changes that they are experiencing and those potentially on the horizon;

• Prepare a comprehensive plan to ensure that the strategic change is successful start to finish (not just at the point of execution)

6

7© P E N N , S C H OE N & B E R LA ND A S S OC I ATE S

STRATEGIC CHANGES ARE HAPPENING

COMPANIES ARE EXPERIENCING STRATEGIC CHANGES

• Nearly 50% have experienced several changes in the past five years

Q: Has your company experienced a strategic change in the last 5 years (even if that precedes you working there)?

47%

38%

15%

Yes, several

Yes, one

No

8

Relocations, closing of factories etc.

A crisis impacting the organization and its stake-holders

Brand repositioning (new name and identity)

Transformations of a specific business unit

Mergers & acquisition

New product launches

New Mission, vision or values

Leadership transition and development [e.g. CEO shift]

Implementation of new technology systems or processes

Downsizing

New strategic direction

Organizational restructuring

20%

20%

24%

29%

31%

32%

33%

33%

33%

35%

40%

50%

RESTRUCTURING AND NEW DIRECTIONS ARE MOST LIKELY CHANGES OVER THE LAST FEW YEARS

Q: What sort of strategic changes has your company been through?

• Additionally, over a third have downsized, most likely as a result of the recession

9

Among all

More Changes Neither more nor less Less changes

64%

29%

6%

THE RECENT ECONOMIC CLIMATE HAS AND WILL CONTINUE TO CREATE AN INFLUX OF CHANGES

• And over half of companies anticipate changes to continue

Q: Would you say your company has experienced more or less changes in the last 2 years due to the economic climate? (Among All) Q: Do you expect to go through more or less changes in the next 2 years due to the economic climate? (Among All)

Experienced more/less changes due to economic

climate in the last 2 years

Expect more/less changes due to

economic climate in the next 2 years

More Changes Neither more nor less Less changes

52%39%

10%

10

THOSE EXPERIENCING THE RECESSION MOST ARE MUCH MORE LIKELY TO BE GOING THROUGH FORCED CHANGES – DOWNSIZING,

RELOCATIONS, CRISIS

Q: What sort of strategic changes has your company been through?

11











Downsizing


24%

31%

29%

20%

20%

33%

33%

33%

32%

40%

35%

50%

26%

30%

31%

33%

35%

37%

38%

38%

48%

50%

53%

60%

Among those ex-periencing many more changes due to economic cli-mate

Among all









Downsizing




9%

10%

10%

13%

15%

16%

16%

17%

18%

20%

23%

27%

LOOKING FORWARD, DECISION MAKERS ANTICIPATE CONTINUED RESTRUCTURING, NEW PRODUCTS AND NEW TECHNOLOGIES

Q: What sort of changes, if any, do you anticipate the company experiencing in the next two years?

• A further 18% anticipate downsizing

12

Among all

© P E N N , S C H OE N & B E R LA ND A S S OC I ATE S

THE CHANGES WE’RE EXPERIENCING

MOST DECISION MAKERS ADMIT NOT HANDLING THESE CHANGES VERY EFFECTIVELY

• Around 1 in 5 say their change process was not effective, and only a similar amount say very effective

Q: In your opinion, how effective was your company’s strategic change process?

23%

58%

15%

3%

Very effectiveSomewhat effectiveNot very effectiveNot at all effective

14

IN A CHANGE, MAJORITY FEEL GOALS AND SCOPE OF CHANGE ARE NOT EFFECTIVELY COMMUNICATED

• Just 18% consider the goals, scope and expectations of changes to be very effectively communicated throughout the business

18%

60%

19%

2%Very effectively

Somewhat effectively

Not very effectively

Not at all effectively

15

Q: When it comes to change, how effectively are the goals, scope and expectations of the change communicated throughout the business?


Downsizing




New mission, vision or values

A crisis impacting the organization and its stakeholders




Relocation, closing of factories, etc


Transformation of a specific business unit

15%

16%

18%

19%

20%

20%

22%

22%

23%

23%

25%

25%

Q: When it comes to change, how effectively are the goals, scope and expectations of the change communicated throughout the business? (% very effectively by those who have experienced a specific change)

COMPANIES SPEND MORE TIME AND RESOURCES COMMUNICATING INTERNALLY-DRIVEN CHANGES

16

• Goals, scope and expectations for product launches or transformation of a specific business unit are most effectively communicated - while downsizing and organizational restructuring least so

Top 3 changes experienced most


Downsizing



Relocation, closing of factories, etc




New mission, vision or values

A crisis impacting the organization and its stakeholders


Transformation of a specific business unit


44%

49%

49%

49%

50%

50%

53%

53%

53%

56%

56%

59%

Q: Were external consultants brought in to help advise and manage the change process? (% “Yes”, among those who have experienced a specific change)

LIKEWISE, EXTERNAL CONSULTANTS ARE MORE OFTEN BROUGHT IN FOR INTERNALLY-DRIVEN CHANGES

17

• External consultants are much less frequently brought in to help with organizational restructuring and downsizing


THERE IS A DISCONNECT BETWEEN CHANGES EXPERIENCING AND WHAT THEY CONSIDER A STRATEGIC CHANGE

• Only 18% see downsizing as a strategic change, though it is the third most common change amongst those interviewed

• This will ultimately affect the way in which companies approach a change and their internal communications


Downsizing











19%

19%

24%

26%

29%

32%

35%

35%

40%

46%

50%

55%

Q: Thinking about a business strategic change, which, if any, of the following do you consider a type of strategic change?


18


HOW TO EXECUTE A STRATEGIC CHANGE


• Factors concerning the progress of the change, such as communicating progress, measuring progress, managing expectations or celebrating progress, are seen as less critical

TIMELY ENGAGEMENT AND COMMUNICATION ARE SEEN AS CRUCIAL

Q: In your opinion, how important are the following in ensuring any strategic changes are a success?

Celebrating progress

Managing expectations with respect to any company changes

Raising issues that affect various business units or functions

Measuring progress

Communicating progress

Prioritising change to ensure on-going success

Resolving issues that affect various business units or functions

Ensuring all business units and functions are involved in im-plementing major changes

Attracting and retaining employees

Responding to employees concerns

Setting measurable goals

Ensuring all business units and functions are aligned on company goals

Listening to employees concerns

Explaining the strategic direction of the company

Communicating goals

Engaging employees

Make strategic decisions in a timely manner

16%17%

20%21%

23%23%24%25%25%

27%28%28%28%29%

33%33%

36%

Critical to ensuring success

20






Resolving issues that affect various business units or func-tions


Ensuring all business units and functions are involved in implementing major changes


Measuring progress




Engaging employees

Communicating goals



16%

17%

25%

23%

20%

24%

23%

25%

29%

21%

28%

27%

28%

33%

33%

28%

36%

21%

29%

32%

33%

33%

33%

34%

37%

37%

38%

38%

38%

40%

40%

42%

44%

50%

Among those who experienced very ef-fective change pro-cesses

Among all

Q: In your opinion, how important are the following in ensuring any strategic changes are a success? (% Critical to ensuring success)

THOSE WHO HAVE EXPERIENCED EFFECTIVE CHANGES ARE MORE LIKELY TO IDENTIFY ALL FACTORS AS DRIVERS OF A SUCCESSFUL CHANGE

PROCESS

21


KEY ISSUES PREVENTING SUCCESSFUL STRATEGIC CHANGES

© P E N N , S C H OE N & B E R LA ND

• Just 19% say they are good at engaging employees on a day-to-day basis

COMPANIES DO NOT COMMUNICATE OR ENGAGE EMPLOYEES WELL ON A DAY-TO-DAY BASIS – THUS MAKING IT MORE DIFFICULT IN TIMES

OF CHANGE

Q: In your opinion, how important are the following in ensuring any strategic changes are a success?Q: How well, if at all, do you feel your company does each of the following on a day-to-day basis?




Measuring progress



Resolving issues that affect various business units or functions

Ensuring all business units and functions are involved in im-plementing major changes







Communicating goals

Engaging employees


20%

20%

18%

22%

24%

21%

18%

20%

20%

18%

24%

21%

19%

22%

22%

19%

22%

16%

17%

20%

21%

23%

23%

24%

25%

25%

27%

28%

28%

28%

29%

33%

33%

36%

Critical to ensuring success

Company does very well

23

16%

50%

28%

5%1% Critically important

Very important

Somewhat important

Not very important

Not at all important

DECISION MAKERS BELIEVE A PLAN IS IMPORTANT


• Almost 2-in-10 say a change management plan is critical, with a further 1-in-2 saying it is at least somewhat important

Q: How important is it to have a change management plan in your company?

24

HAVING A PLAN IN PLACE DRIVES EFFECTIVE CHANGE


• By almost two to one, those who said they had experienced a very effective change process had a full plan in place before the change started

Q: Did your company manage the change process using a strategic plan?

Yes- there was a full plan in place in advance

of the change

Yes- there was a plan at the time of the change

No- the change happened organically

Don't know

37%44%

14%

5%

62%

31%

7%0%

Among all

Among those who experi-enced very effective change processes

25

HOWEVER, ONLY HALF HAVE CHANGE PLANS IN PLACE


• About half have a communications plan in case of potential change• Companies are more likely to have plans for the changes that they initiate, rather than for

ones that are influenced by outside factors

52%31%

17%

Yes No Don't know


A crisis impacting the organization and its

stakeholders

Leadership transition and development [e.g.

CEO shift]




12%

13%

16%

16%

17%

21%

21%

24%

25%

27%

28%

28%

Q: What type of strategic changes does your company have plans in place to address? (Among those with plans in place)

Q: Does your company currently have a change management preparedness/ communications plan in case of a potential change?

26


22%

36% 38%

13%9%

MOST OFTEN, EMPLOYEES TOLD OF CHANGE ONCE IT IS HAPPENING WITH LITTLE FOLLOW UP OR DIALOGUE


• Less than a quarter are engaged the earliest goal setting and scoping phases of the strategic change, and even fewer are engaged post-execution

Q: For the following types of strategic changes, at what stage would all employees typically hear about the change?

27

Among all

External consultants

General media

Industry press

Policy influencers, e.g. NGOs

Government

Business partners

Shareholders

Key stakeholders

Heads of business units

Heads of business functions

All employees

Board of Directors

7%

11%

13%

13%

17%

22%

26%

26%

30%

30%

36%

43%

% saying critical

Q: In your opinion, how important is it for your company to communicate with each of the following groups about strategic changes?

INTERNAL COMMUNICATION IS MOST IMPORTANT—STARTING AT THE TOP


• Though it is critical that communication quickly flows down the ladder

COMMUNICATION SHOULD FOCUS ON CREATING A PROACTIVE DIALOGUE

• Staff meetings, briefing, workshops, on-going talks are highlighted as key ways to communicate

Word of mouth

Via social media

In one-to-one meetings

Via individual email

In seminars/workshops

On corporate website

In small-group- meetings/workshops

Via all office email

Staff newsletters

Announcement from the CEO/Management

On-going communications from middle managers / line managers

On the employee intranet

In all staff meetings / briefings/workshops

14%

7%

14%

16%

18%

23%

22%

32%

32%

37%

32%

39%

40%

5%

8%

17%

17%

21%

23%

30%

31%

34%

38%

39%

42%

47%

How SHOULD your company communicate change

How DOES your company communic-ate change

Q: How, if at all, does your company usually communicate strategic changes throughout the business?Q: In your opinion, how should your company communicate strategic changes throughout the business?

29

• Changes tend not to be communicated effectively when information is held closely amongst leadership


Top management are not always involved in the process

The company does not invest enough resources in making the change a success

Top management are unable to explain the rationale for the change

The company goes through so many changes, employees no longer pay attention

Strategic change processes are rest at the top management level and never became relevant for other levels or functions of the

business

All necessary business functions are not always involved

Middle management are not always involved in the process

There is often a lot of resistance to change within the business

Top management don't always share information throughout the business

There isn't enough communication during change processes

Employees are not always involved in the process

9%

17%

17%

17%

17%

22%

23%

29%

31%

31%

38%

Among those who feel change is not com-municated effectively

Q: If the changes are not communicated effectively, why is that? (Among those who feel change NOT communicated very effectively)

DECISION MAKERS CITE LACK OF COMMUNICATION AS KEY BARRIER TO SUCCESSFUL CHANGE

30


BURSON-MARSTELLER:NEXT STEPS


This is where we envision BM to include their 10-pt plan


APPENDIX



ADDITIONAL ANALYSIS- STRATEGIC CHANGES BY MARKETS



Q45: Has your company experienced a strategic change in the last 5 years (even if that precedes you working there)?

34

Base Denmark Finland France Germany Italy Norway* Spain Sweden Switzerland* UK

Yes, several 47% 63% 56% 38% 41% 40% 52% 36% 60% 39% 46%Yes, one 38% 24% 26% 44% 47% 46% 38% 46% 22% 47% 40%No 15% 14% 18% 18% 12% 14% 10% 18% 18% 14% 14%

*Low base size


Q47: What sort of strategic changes has your company been through? (*low base size across markets)

35

Base Denmark Finland France Germany Italy Norway Spain Sweden Switzerland UK

Organizational restructuring 50% 70% 58% 55% 31% 55% 48% 36% 50% 39% 56%

New strategic direction 40% 57% 49% 40% 45% 34% 19% 50% 31% 29% 47%

Downsizing 35% 46% 33% 36% 47% 23% 26% 32% 48% 19% 36%

New Mission, vision or values 33% 46% 33% 36% 24% 19% 30% 23% 31% 42% 44%

Leadership transition and development [e.g. CEO shift] 33% 50% 30% 24% 24% 32% 22% 36% 29% 45% 36%

Implementation of new tech systems or processes 33% 30% 49% 19% 24% 36% 26% 45% 37% 26% 38%

New product launches 32% 28% 37% 31% 49% 21% 15% 30% 29% 45% 36%

Mergers & acquisition 31% 33% 21% 26% 18% 36% 41% 32% 29% 35% 36%

Transformations of a specific business unit 29% 26% 37% 19% 41% 38% 26% 32% 19% 26% 27%

Brand repositioning (new name and identity) 24% 24% 26% 33% 35% 19% 11% 23% 17% 29% 29%

Relocations, closing of factories etc. 20% 28% 23% 24% 14% 13% 7% 14% 27% 10% 40%

A crisis impacting the org. and its stakeholders 20% 35% 19% 17% 16% 15% 22% 18% 21% 13% 27%


Q46: Would you say your company has experienced more or less changes in the last 2 years due to the economic climate?

36

Experienced more/less changes due to economic climate in the last 2 years

Base Denmark Finland France Germany Italy Norway

* Spain Sweden Switzerland * UK

More changes 64% 65% 68% 64% 75% 76% 59% 38% 62% 64% 76%Neither more nor less 29% 31% 26% 32% 25% 22% 31% 46% 24% 31% 24%

Fewer changes 6% 4% 6% 4% 0% 2% 10% 16% 14% 6% 0%

*Low base size

Expect more/less changes due to economic climate in the next 2 years

Base Denmark Finland France Germany Italy

Norway*

Spain Sweden Switzerland * UK

More changes 52% 45% 46% 56% 51% 56% 45% 54% 54% 61% 48%

Neither more nor less 39% 47% 46% 38% 45% 40% 45% 38% 28% 31% 34%

Fewer changes 10% 8% 8% 6% 4% 4% 10% 8% 18% 8% 18%

Q125: Do you expect to go through more or less changes in the next 2 years due to the economic climate?


Q55: In your opinion, how effective was your company’s strategic change process? (*low base size across markets)

37


Very effective 23% 24% 2% 7% 33% 53% 4% 32% 21% 19% 33%

Somewhat effective 58% 65% 60% 69% 63% 34% 70% 50% 58% 58% 56%

Not very effective 15% 11% 30% 21% 4% 9% 19% 14% 19% 19% 11%

Not at all effective 3% 0% 7% 2% 0% 4% 7% 5% 2% 3% 0%

NOT ALL DECISION MAKERS AGREE ON WHAT STRATEGIC CHANGE MEANS

Q43: Thinking about a business strategic change, which, if any, of the following do you consider a type of strategic change?

38


New strategic direction 55% 73% 78% 46% 47% 34% 59% 48% 54% 47% 64%

New Mission, vision or values 50% 63% 54% 42% 51% 42% 45% 50% 48% 53% 54%

Organizational restructuring 46% 63% 48% 38% 35% 48% 34% 58% 46% 33% 60%

Mergers & acquisition 40% 39% 52% 34% 35% 32% 31% 40% 40% 44% 50%

Brand repositioning (new name and identity) 35% 20% 46% 38% 35% 24% 24% 36% 40% 36% 46%

Implementation of new technology systems or processes 35% 37% 36% 34% 25% 34% 38% 56% 36% 22% 36%

New product launches 32% 22% 26% 38% 37% 34% 21% 44% 30% 33% 40%

Transformations of a specific business unit 29% 22% 22% 24% 41% 28% 21% 30% 30% 39% 34%

Relocations, closing of factories etc. 26% 31% 46% 30% 31% 10% 21% 18% 32% 11% 30%

Leadership transition and development [e.g. CEO shift] 24% 22% 28% 12% 29% 30% 10% 18% 32% 19% 44%

A crisis impacting the organization and its stakeholders 19% 25% 18% 10% 25% 10% 31% 18% 12% 11% 26%

Downsizing 19% 24% 18% 20% 24% 12% 14% 6% 26% 14% 38%

*Low base size

TIMELY ENGAGEMENT AND COMMUNICATION ARE SEEN AS CRITICAL

39

Base Denmark Finland France Germany Italy Norway

* Spain Sweden Switzerland* UK

Make strategic decisions in a timely manner 36% 53% 42% 14% 33% 42% 34% 40% 32% 39% 26%Communicating goals 33% 53% 48% 16% 33% 30% 34% 32% 14% 36% 32%Engaging employees 33% 67% 16% 10% 20% 42% 52% 44% 38% 11% 30%

Explaining the strategic direction of the company 29% 39% 46% 12% 29% 34% 24% 22% 12% 31% 40%Setting measurable goals 28% 35% 26% 6% 27% 34% 38% 36% 20% 28% 32%

Ensuring all business units and functions are aligned on company goals 28% 41% 30% 10% 25% 36% 24% 34% 18% 28% 36%Listening to employees concerns 28% 20% 38% 18% 24% 34% 28% 32% 18% 25% 42%Responding to employees concern 27% 29% 26% 16% 25% 34% 24% 34% 14% 22% 40%

Ensuring all business units and functions are involved in implementing major changes 25% 35% 38% 12% 18% 32% 17% 26% 16% 22% 36%Attracting and retaining employees 25% 33% 18% 8% 16% 36% 21% 26% 32% 22% 34%

Resolving issues that affect various business units or functions 24% 27% 30% 8% 20% 24% 24% 38% 18% 22% 30%Communicating progress 23% 24% 34% 8% 24% 24% 24% 22% 18% 22% 28%

Prioritising change to ensure on-going success 23% 41% 26% 6% 24% 24% 17% 34% 14% 14% 26%Measuring progress 21% 25% 34% 4% 14% 30% 17% 22% 14% 22% 30%

Raising issues that affect various business units or functions 20% 24% 14% 2% 20% 18% 17% 36% 16% 22% 34%

Managing expectations with respect to any company changes 17% 24% 18% 8% 10% 28% 21% 24% 2% 6% 28%Celebrating progress 16% 18% 34% 4% 10% 20% 10% 20% 10% 14% 18%

Q82 – 100 : In your opinion, how important are the following in ensuring any strategic changes are a success?

*Low base size

COMPANIES DO NOT COMMUNICATE OR ENGAGE EMPLOYEES WELL ON A DAY-TO-DAY BASIS – THUS MAKING IT MORE DIFFICULT IN TIMES

OF CHANGE

Q25 - 41: How well, if at all, do you feel your company does each of the following on a day-to-day basis?

40

(Company does ‘very well’) Base Denmark Finland France Germany Italy Norway* Spain Sweden Switzerland

* UK

Setting measurable goals 24% 37% 26% 6% 27% 24% 21% 18% 32% 19% 34%Communicating progress 24% 37% 20% 10% 25% 28% 17% 12% 28% 19% 38%Communicating goals 22% 25% 18% 12% 33% 24% 14% 22% 16% 19% 38%Measuring progress 22% 31% 18% 10% 25% 22% 17% 16% 20% 19% 38%Explaining the strategic direction of the company 22% 29% 14% 8% 22% 28% 24% 26% 16% 17% 38%

Make strategic decisions in a timely manner 22% 29% 16% 10% 22% 28% 17% 18% 18% 17% 44%

Ensuring all business units/functions are aligned on company goals 21% 35% 12% 10% 18% 22% 24% 18% 16% 22% 36%

Prioritising change to ensure on-going success 21% 31% 20% 10% 27% 22% 14% 12% 18% 19% 36%

Celebrating progress 20% 16% 6% 16% 14% 22% 28% 14% 30% 19% 40%Managing expectations with respect to any company changes 20% 22% 16% 12% 29% 20% 21% 14% 26% 17% 28%

Ensuring all business units/functions involved in implementing changes 20% 27% 12% 12% 25% 24% 17% 10% 20% 14% 42%

Attracting and retaining employees 20% 35% 20% 6% 24% 18% 14% 10% 18% 8% 46%Engaging employees 19% 31% 16% 16% 20% 18% 10% 8% 26% 14% 30%Listening to employees concerns 19% 25% 20% 12% 22% 16% 17% 12% 20% 8% 40%Raising issues that affect various business units or functions 18% 22% 10% 4% 27% 20% 10% 10% 28% 17% 30%

Resolving issues that affect various business units or functions 18% 25% 8% 6% 22% 24% 17% 16% 12% 14% 36%

Responding to employees concerns 18% 29% 18% 8% 18% 26% 7% 14% 16% 11% 32%*Low base size



Q131: How important is it to have a change management plan in your company?

41

Base Denmark Finland France Germany Italy Norway* Spain Sweden Switzerland

* UK

Critical 16% 29% 12% 6% 8% 28% 17% 24% 12% 8% 18%

Very important 50% 35% 50% 52% 45% 52% 59% 44% 52% 61% 46%Somewhat important 28% 27% 34% 34% 41% 20% 14% 24% 28% 22% 36%

Not very important 5% 8% 2% 6% 6% 0% 7% 4% 8% 8% 0%

Not at all important 1% 0% 2% 2% 0% 0% 3% 4% 0% 0% 0%

*Low base size

ONLY A THIRD OVERALL HAD A FULL PLAN IN PLACE IN ADVANCE OF THE CHANGE


Q54: Did your company manage the change process using a strategic plan? (*low base size across markets)

42


Yes : there was a full plan in place in advance of the change

37% 26% 19% 26% 41% 60% 44% 32% 40% 39% 42%

Yes: there was a plan at the time of the change

44% 57% 42% 57% 45% 38% 41% 39% 35% 35% 53%

No: the change happened organically 14% 15% 26% 10% 12% 2% 7% 23% 19% 19% 4%

Don't know 5% 2% 14% 7% 2% 0% 7% 7% 6% 6% 0%

ONLY HALF HAVE CHANGE PLANS IN PLACE NOW


Q126: Does your company currently have a change management preparedness/ communications plan in case of a potential change?

43


Yes 52% 47% 62% 40% 41% 54% 66% 52% 54% 56% 52%

No 31% 39% 12% 36% 41% 30% 21% 26% 30% 36% 36%

Don't know

17% 14% 26% 24% 18% 16% 14% 22% 16% 8% 12%

*Low base size

Q72-82: In your opinion, how important is it for your company to communicate with each of the following groups about strategic changes?




* UK

Board of Directors 43% 51% 50% 20% 49% 44% 48% 42% 32% 42% 52%All employees 36% 47% 56% 18% 27% 38% 38% 30% 30% 42% 38%Heads of business units 30% 49% 44% 12% 18% 40% 21% 30% 24% 28% 32%

Heads of business functions 30% 45% 48% 14% 29% 36% 10% 26% 24% 33% 32%

Shareholders 26% 27% 34% 10% 18% 20% 28% 40% 16% 28% 36%Key stakeholders 26% 29% 34% 12% 27% 22% 24% 40% 18% 19% 36%Business partners 22% 18% 14% 12% 20% 26% 14% 34% 20% 25% 36%Government 17% 37% 14% 6% 4% 26% 38% 4% 12% 11% 22%Industry press 13% 16% 8% 4% 12% 32% 14% 12% 4% 11% 20%

Policy influencers, e.g. NGOs 13% 18% 12% 2% 6% 16% 17% 4% 6% 19% 28%

General media 11% 14% 10% 4% 12% 14% 10% 8% 8% 17% 16%

External consultants 7% 10% 4% 2% 8% 8% 7% 4% 6% 6% 14%

*Low base size

HOW COMPANIES ARE COMMUNICATING…

Q121: How, if at all, does your company usually communicate strategic changes throughout the business?

45


* UK

In all staff meetings / briefings/workshops 40% 53% 48% 36% 41% 30% 28% 30% 48% 33% 56%

On the employee intranet 39% 49% 62% 42% 31% 30% 34% 22% 42% 44% 34%

Announcement from the CEO/Management 37% 47% 52% 24% 43% 32% 24% 18% 46% 44% 38%

On-going communications from middle managers / line managers 32% 47% 34% 30% 35% 24% 17% 24% 36% 39% 32%

Staff newsletters 32% 37% 44% 42% 29% 22% 28% 26% 30% 22% 42%Via all office email 32% 27% 48% 24% 31% 28% 34% 28% 8% 42% 46%On corporate website 23% 27% 38% 16% 31% 40% 10% 14% 20% 17% 18%In small-group-meetings/workshops 22% 16% 30% 20% 29% 28% 3% 18% 40% 8% 28%

In seminars/workshops 18% 20% 18% 24% 18% 22% 17% 10% 18% 8% 30%Via individual email 16% 12% 14% 18% 20% 16% 17% 8% 24% 14% 22%In one-to-one meetings 14% 6% 16% 18% 14% 18% 3% 4% 28% 8% 22%Word of mouth 14% 10% 18% 10% 20% 12% 17% 6% 10% 11% 26%Via social media 7% 4% 6% 18% 6% 10% 0% 6% 4% 0% 14%

*Low base size

HOW COMPANIES SHOULD COMMUNICATE…

Q122: In your opinion, how should your company communicate strategic changes throughout the business?

46

Base Denmark Finland France Germany Italy Norway* Spain Sweden Switzerland * UK

In all staff meetings / briefings/workshops 47% 69% 72% 42% 29% 34% 38% 40% 60% 44% 44%

Intranet 42% 39% 66% 46% 20% 38% 45% 36% 42% 58% 34%

On-going communications from middle managers / line managers 39% 51% 62% 36% 27% 34% 31% 26% 42% 42% 38%

Announcement from the CEO/Management 38% 51% 54% 42% 51% 24% 17% 18% 36% 47% 42%

Staff newsletters 34% 37% 44% 50% 29% 24% 28% 34% 30% 28% 32%

Via all office email 31% 31% 52% 22% 29% 30% 55% 14% 10% 36% 34%In small-group-meetings/workshops

30% 27% 32% 34% 31% 44% 7% 20% 42% 31% 32%

On corporate website 23% 22% 40% 16% 27% 26% 21% 24% 20% 17% 22%In seminars/workshops 21% 16% 26% 26% 16% 34% 34% 12% 20% 14% 16%In one-to-one meetings 17% 2% 14% 26% 14% 20% 10% 12% 26% 14% 36%Via individual email 17% 8% 16% 24% 14% 24% 14% 18% 22% 11% 24%Via social media 8% 6% 8% 12% 16% 8% 7% 8% 4% 0% 14%Word of mouth 5% 10% 0% 4% 10% 4% 3% 2% 0% 6% 16%

*Low base size


ADDITIONAL ANALYSIS- COMPANY SIZE- EXPECTATIONS FOR GROWTH IN COMING YEAR- SECTOR


METHODOLOGY- SECTOR DEFINITIONS


• For the purposes of data cuts, industry sectors have been grouped as follows:

• Service Industry (Consulting, Finance, Hospitality, Insurance, Legal Services, Public Relations, Real Estate);

• Public and NGO (Civil Service (Local/City/Town Office / Police / Postal / etc.), Education (pre-University education), Government (Local or national level), Healthcare, Higher Education, NGO/non-for profit);

• Manuf + Industrial (Logistics/Warehousing, Manufacturing, Resources Extraction (energy, mining, logging));

• Tech + R&D + Retail (Consumer Electronics (Retail / Manufacturing), Engineering, Pharmaceuticals, Retail, Telecommunications)


Q45: Has your company experienced a strategic change in the last 5 years (even if that precedes you working there)?

49

Base

Number of Employees Expected Growth Industry Sector

Under 2500

Over 2500

Substantial + A Lot Little Same +

Downsize Public +

NGOService

IndustryManufacturing

+ Industrial Tech + R&D

+ Retail Yes, several 47% 44% 52% 48% 47% 44% 43% 45% 52% 50%Yes, one 38% 40% 35% 43% 37% 32% 38% 34% 41% 40%No 15% 16% 13% 8% 15% 24% 19% 21% 7% 10%


Q47: What sort of strategic changes has your company been through?

50

Base


Under 2500

Over 2500

Substantial + Many Little Same +

Downsize Public + NGO

Service Industry

Manufacturing + Industrial

Tech + R&D + Retail

Organizational restructuring 50% 45% 57% 37% 51% 66% 54% 49% 43% 44%

New strategic direction 40% 38% 43% 36% 43% 38% 36% 41% 34% 48%

Downsizing 35% 28% 44% 23% 38% 45% 33% 27% 35% 42%

New Mission, vision or values 33% 33% 31% 33% 32% 32% 30% 34% 37% 30%

Leadership transition and development [e.g. CEO shift] 33% 29% 38% 24% 36% 40% 34% 36% 28% 32%

Implementation of new technology systems or processes 33% 32% 34% 30% 36% 32% 31% 35% 36% 30%

New product launches 32% 32% 32% 34% 35% 23% 22% 41% 35% 39%

Mergers & acquisition 31% 31% 30% 26% 38% 22% 22% 38% 36% 29%

Transformations of a specific business unit 29% 26% 33% 29% 29% 29% 21% 33% 27% 35%

Brand repositioning (new name and identity) 24% 22% 28% 23% 26% 23% 18% 25% 35% 28%

Relocations, closing of factories etc. 20% 13% 30% 13% 21% 28% 17% 21% 23% 25%

A crisis impacting the organization and its stakeholders 20% 21% 19% 21% 19% 23% 18% 30% 16% 20%

Other 1% 1% 1% 1% 0% 2% 1% 0% 0% 0%


51

Expect more/less changes due to economic climate in the next 2 years

Base


Under 2500

Over 2500


Downsize Public +

NGOService


+ Industrial Tech + R&D + Retail

More changes 52% 50% 53% 62% 45% 50% 53% 50% 54% 47%Neither more nor less 39% 41% 37% 33% 44% 38% 40% 39% 35% 46%Fewer changes 10% 9% 10% 5% 11% 11% 8% 10% 11% 7%

Experienced more/less changes due to economic climate in the last 2 years

Base


Under 2500

Over 2500


Downsize Public +

NGOService



More changes 64% 63% 66% 72% 61% 62% 62% 56% 70% 67%Neither more nor less 29% 31% 27% 23% 31% 35% 32% 37% 26% 26%Fewer changes 6% 6% 6% 5% 8% 4% 6% 7% 4% 7%

Q46: Would you say your company has experienced more or less changes in the last 2 years due to the economic climate?Q125: Do you expect to go through more or less changes in the next 2 years due to the economic climate?


Q55: In your opinion, how effective was your company’s strategic change process?

52

Base


Under 2500

Over 2500


Downsize Public +

NGOService



Very effective 23% 22% 25% 36% 17% 18% 19% 29% 27% 20%

Somewhat effective 58% 63% 51% 52% 64% 56% 63% 55% 55% 57%

Not very effective 15% 14% 17% 10% 18% 19% 14% 14% 14% 19%

Not at all effective 3% 1% 6% 2% 2% 8% 4% 2% 3% 5%

NOT ALL DECISION MAKERS AGREE ON WHAT STRATEGIC CHANGE MEANS

Q43: Thinking about a business strategic change, which, if any, of the following do you consider a type of strategic change?

53

Base


Under 2500

Over 2500


Downsize Public +

NGOService

IndustryManufacturing +

Industrial Tech + R&D

+ Retail

New strategic direction 55% 53% 58% 46% 59% 59% 55% 61% 57% 51%

New Mission, vision or values 50% 47% 54% 46% 51% 54% 54% 49% 47% 51%

Organizational restructuring 46% 45% 48% 40% 47% 54% 50% 41% 44% 47%

Mergers & acquisition 40% 40% 39% 35% 46% 32% 27% 47% 50% 39%

Brand repositioning (new name and identity) 35% 32% 38% 30% 35% 41% 31% 46% 33% 27%

Implementation of new technology systems or processes 35% 36% 35% 33% 34% 43% 42% 33% 38% 26%

New product launches 32% 31% 35% 36% 34% 24% 25% 32% 39% 38%

Transformations of a specific business unit 29% 31% 26% 29% 30% 28% 25% 40% 29% 28%

Relocations, closing of factories etc. 26% 22% 32% 22% 26% 32% 27% 25% 35% 20%

Leadership transition and development [e.g. CEO shift] 24% 23% 27% 25% 24% 25% 22% 31% 23% 21%

A crisis impacting the organization and its stakeholders 19% 20% 17% 20% 20% 14% 22% 15% 21% 13%

Downsizing 19% 16% 25% 14% 19% 29% 21% 16% 25% 17%

TIMELY ENGAGEMENT AND COMMUNICATION ARE SEEN AS CRUCIAL

Q82 – 100: In your opinion, how important are the following in ensuring any strategic changes are a success?

54

Base

Number of Employees Expected Growth %Industry Sector

Under 2500

Over 2500



Service Industry


Tech + R&D + Retail

Make strategic decisions in a timely manner 36% 32% 41% 35% 36% 36% 39% 35% 35% 29%Communicating goals 33% 27% 41% 33% 32% 35% 35% 23% 27% 44%Engaging employees 33% 30% 37% 34% 29% 40% 37% 28% 33% 28%Explaining the strategic direction of the company 29% 25% 34% 31% 30% 25% 31% 33% 24% 30%

Setting measurable goals 28% 24% 34% 29% 30% 23% 28% 32% 25% 28%Ensuring all business units and functions are aligned on company goals 28% 23% 35% 32% 28% 24% 30% 36% 26% 22%

Listening to employees concerns 28% 24% 34% 29% 24% 35% 30% 31% 22% 28%Responding to employees concerns 27% 24% 31% 29% 24% 30% 31% 25% 18% 31%Ensuring all business units and functions are involved in implementing major changes 25% 21% 31% 26% 25% 25% 30% 28% 19% 19%

Attracting and retaining employees 25% 20% 31% 28% 20% 28% 29% 26% 20% 22%Resolving issues that affect various business units or functions 24% 22% 27% 29% 20% 26% 28% 20% 22% 23%

Communicating progress 23% 17% 31% 26% 21% 22% 26% 25% 15% 24%Prioritising change to ensure on-going success 23% 18% 29% 28% 21% 18% 26% 17% 21% 25%Measuring progress 21% 19% 25% 27% 20% 16% 25% 18% 22% 22%Raising issues that affect various business units or functions 20% 19% 22% 28% 19% 12% 24% 17% 17% 19%

Managing expectations with respect to any company changes 17% 12% 24% 21% 16% 12% 22% 14% 13% 15%

Celebrating progress 16% 14% 19% 21% 14% 11% 13% 18% 15% 18%

COMPANIES THAT EXPECT SUBSTANTIAL GROWTH ARE MUCH MORE LIKELY TO COMMUNICATE AND ENGAGE EMPLOYEES WELL ON A DAY-

TO-DAY BASIS

Q25-41: How well, if at all, do you feel your company does each of the following on a day-to-day basis?

55

(Company does ‘very well’) Base


Under 2500

Over 2500



Service Industry


Tech + R&D + Retail

Setting measurable goals 24% 25% 24% 39% 20% 13% 23% 30% 23% 21%Communicating progress 24% 22% 26% 37% 19% 15% 24% 27% 25% 21%Communicating goals 22% 20% 25% 35% 19% 11% 20% 29% 23% 23%Measuring progress 22% 23% 20% 34% 20% 9% 15% 33% 18% 24%Explaining the strategic direction of the company 22% 21% 23% 34% 19% 12% 21% 24% 20% 18%Make strategic decisions in a timely manner 22% 23% 20% 37% 18% 9% 18% 22% 24% 25%Ensuring all business units and functions are aligned on company goals 21% 22% 20% 33% 20% 9% 19% 21% 23% 22%Prioritising change to ensure on-going success 21% 22% 20% 33% 17% 14% 15% 21% 23% 25%Celebrating progress 20% 23% 17% 39% 14% 8% 17% 21% 21% 17%Managing expectations with respect to any company changes 20% 19% 23% 33% 17% 11% 18% 23% 22% 23%Ensuring all business units and functions are involved in implementing major changes 20% 19% 22% 37% 14% 12% 18% 21% 28% 16%Attracting and retaining employees 20% 22% 17% 33% 17% 8% 21% 18% 24% 16%Engaging employees 19% 20% 17% 32% 14% 12% 18% 19% 15% 20%Listening to employees concerns 19% 21% 17% 39% 11% 11% 20% 21% 21% 16%Raising issues that affect various business units or functions 18% 17% 19% 31% 13% 10% 17% 20% 23% 14%Resolving issues that affect various business units or functions 18% 19% 16% 35% 12% 8% 19% 13% 19% 14%Responding to employees concerns 18% 19% 16% 31% 14% 9% 18% 17% 21% 20%



Q131: How important is it to have a change management plan in your company?

56

Base


Under 2500

Over 2500


Downsize Public +

NGOService



Critical 16% 13% 21% 20% 13% 18% 17% 15% 21% 11%Very important 50% 51% 47% 52% 51% 44% 49% 51% 40% 55%Somewhat important 28% 28% 28% 21% 32% 29% 28% 27% 34% 28%Not very important 5% 6% 3% 5% 3% 8% 5% 6% 2% 6%Not at all important 1% 1% 1% 2% 0% 1% 1% 0% 3% 1%

ONLY A THIRD OVERALL HAD A FULL PLAN IN PLACE IN ADVANCE OF THE CHANGE

Q54: Did your company manage the change process using a strategic plan?

57

Base


Under 2500

Over 2500



Service Industry


Tech + R&D + Retail

Yes : there was a full plan in place in advance of the change

37% 36% 39% 39% 34% 41% 34% 45% 39% 27%

Yes: there was a plan at the time of the change

44% 48% 38% 42% 48% 38% 49% 42% 38% 49%

No: the change happened organically

14% 12% 16% 12% 13% 18% 15% 7% 15% 18%

Don't know 5% 4% 6% 7% 5% 2% 2% 5% 8% 7%

ONLY HALF HAVE CHANGE PLANS IN PLACE NOW

Q126: Does your company currently have a change management preparedness/ communications plan in case of a potential change?

58

Base


Under 2500

Over 2500



Service Industry


Tech + R&D + Retail

Yes 52% 52% 53% 63% 51% 41% 51% 48% 49% 56%

No 31% 33% 28% 25% 34% 31% 32% 36% 28% 31%

Don't know

17% 16% 19% 12% 15% 28% 17% 16% 22% 13%

Q72-82: In your opinion, how important is it for your company to communicate with each of the following groups about strategic changes?



Base


Under 2500

Over 2500



Service Industry


Tech + R&D + Retail

Board of Directors 43% 40% 47% 40% 47% 38% 41% 46% 51% 37%All employees 36% 35% 39% 37% 34% 40% 37% 36% 35% 35%Heads of business units 30% 28% 33% 30% 31% 27% 30% 33% 25% 32%Heads of business functions 30% 27% 34% 34% 30% 24% 26% 38% 33% 28%

Shareholders 26% 23% 30% 26% 27% 22% 23% 21% 35% 24%Key stakeholders 26% 24% 30% 28% 26% 23% 30% 26% 25% 20%Business partners 22% 19% 25% 27% 20% 18% 23% 32% 17% 15%Government 17% 18% 17% 17% 14% 26% 30% 11% 12% 11%Industry press 13% 12% 15% 18% 12% 9% 16% 15% 15% 8%Policy influencers, e.g. NGOs 13% 12% 14% 15% 11% 14% 17% 12% 14% 7%

General media 11% 10% 14% 15% 10% 8% 15% 9% 14% 7%External consultants 7% 6% 9% 11% 6% 4% 8% 5% 3% 8%

HOW COMPANIES ARE COMMUNICATING…

Q121: How, if at all, does your company usually communicate strategic changes throughout the business?

60

Base


Under 2500

Over 2500


Downsize Public +

NGOService

IndustryManufacturing +

Industrial Tech + R&D + Retail

In all staff meetings / briefings/workshops 40% 39% 42% 30% 45% 44% 41% 36% 44% 37%

On the employee intranet 39% 34% 47% 31% 45% 37% 35% 50% 31% 42%Announcement from the CEO/Management 37% 35% 39% 34% 38% 38% 26% 38% 41% 45%

On-going communications from middle managers / line managers 32% 31% 33% 33% 33% 28% 28% 31% 34% 30%

Staff newsletters 32% 28% 38% 27% 33% 37% 31% 29% 34% 29%Via all office email 32% 30% 34% 29% 31% 38% 35% 35% 27% 25%On corporate website 23% 18% 30% 23% 21% 28% 28% 25% 27% 12%In small-group-meetings/workshops 22% 19% 27% 20% 23% 24% 24% 21% 18% 25%In seminars/workshops 18% 18% 19% 16% 19% 22% 21% 15% 18% 18%Via individual email 16% 16% 17% 14% 17% 19% 16% 18% 16% 13%In one-to-one meetings 14% 14% 13% 19% 10% 15% 13% 14% 14% 15%Word of mouth 14% 15% 12% 11% 14% 19% 17% 14% 9% 11%Via social media 7% 7% 7% 8% 6% 6% 7% 8% 6% 4%

HOW COMPANIES SHOULD COMMUNICATE…

Q122: In your opinion, how should your company communicate strategic changes throughout the business?

61

Base


Under 2500

Over 2500



Service Industry


Tech + R&D + Retail

In all staff meetings / briefings/workshops 47% 46% 49% 34% 51% 56% 47% 45% 46% 49%

Intranet 42% 39% 47% 32% 46% 49% 43% 43% 36% 45%On-going communications from middle managers / line managers

39% 35% 45% 29% 44% 42% 40% 31% 41% 35%

Announcement from the CEO/Management 38% 35% 42% 32% 43% 37% 31% 46% 39% 41%

Staff newsletters 34% 29% 41% 22% 37% 42% 37% 26% 35% 33%Via all office email 31% 29% 35% 26% 33% 36% 35% 26% 29% 29%In small-group-meetings/workshops

30% 24% 39% 25% 33% 30% 32% 37% 23% 24%

On corporate website 23% 18% 31% 23% 23% 25% 24% 18% 30% 23%In seminars/workshops 21% 21% 23% 22% 18% 28% 28% 14% 20% 17%In one-to-one meetings 17% 18% 16% 15% 18% 19% 20% 19% 12% 19%Via individual email 17% 18% 17% 20% 16% 17% 22% 21% 17% 8%Via social media 8% 8% 9% 10% 7% 8% 11% 5% 6% 8%Word of mouth 5% 7% 4% 6% 5% 4% 5% 5% 8% 4%