AIMC Newsletter 1

2010 AIMC Conference Review p 1-2Daryl Conner Delivers KeynoteAddress at the AIMC Confer-ence ........................... p3AIMC Chapter FormationUpdate ....................... p-4AIMC’s European ChapterContributing Value ..... p-5New IC Best Practice Awardp-6Health Care Industry Work-shop .......................... p-7Transformational ChangeLeadership ................ p-8Additional Benefits of an ICGp9Developing OE Capabilitiesp10Internal Consulting Boot Campp11Building IC Capabilities from aProcess Improvement Per-spective .....................p12Tough Times for ElectricDelivery Companies--the RightTime for Rapid Results...pp13-14

In this Issue

Summer 2010

NewsletterA Publication of The Association of Internal Management Consultants

The Association ofInternal Management

Consultants

824 Caribbean CourtMarco Island, FL 34145

239-642-0580 •info@aimc.org

AIMC 2010 International Conference-- Provided Our Best Agenda EverOur recent conference, with the theme of “The Role of Internal Consultingin Sustaining and Growing Organizations in Turbulent Times,” had severalnew features, including our best practice poster session and our firstindustry-focused workshop.A very interactive networking session kicked off the conference withbreak-out groups exploring key success factors in internal consultingorganizations in three areas:1. Increasing effectiveness2. Focusing on more strategic projects, and3. Enhancing capabilitiesThe output from this interactive session will provide some themes forupcoming Affinity Group conference calls.Presentations included: Daryl Conner’s keynote address on Success-fully Executing Change (see later article in this Newsletter); A Case Studyon Strategic Transformation at Cargill; Building Top-Line Growth (with anEthicon Endo Case Overview); Linking Internal Consulting to Key Corpo-rate Priorities at Chevron; and Building Internal Consulting CapabilitiesThroughout the Organization at Alticor/Amway.Our first highly insightful Panel discussion was The Role of InternalConsulting in Major Change Programs which provided the following briefpresentations including interactive discussion: Global Transformation atthe United Nations (UN); Evolution of Enterprise Transformation at FidelityInvestments; Strategic Transformation at Cargill; and CVS-IBM BPOProject.Next, the Emerging Trends in Internal Consulting Panel covered theseareas: Linking Internal Consulting and Strategic Planning at Blue CrossBlue Shield of Massachusetts; Building Internal Consulting Capability;Designing Customer-Centric Organizations; and Revolutionary Change inthe Federal Government.Our first Internal Consulting Best Practice Poster Session providedgraphic story boards of the services of leading IC Organizations in twokey areas -- Building Client Relationships and Enhancing Capabilities.Posters included: Building Core Competencies & Managing Projects(Mayo Clinic); Client Relationship Management at Chevron; DevelopingLilly’s IC Capabilities; IC Capabilities at ExxonMobil; Driving BusinessResults (Fidelity); Establishing and Maintaining Client Relationships(Johnson & Johnson); Aligning and Integrating the Internal ConsultingGroup with Strategic Planning Generates Positive Results (Blue CrossBlue Shield of Massachusetts); Developing Capabilities at BectonDickinson.

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2010 AIMC International Conference -- cont’dBill Trotter, AIMC Managing Director

Finally, our last day featured a record number of four skill-building workshops, including:1. Change Execution Tactics by Conner Partners2. Innovative Approaches to How Companies Work with Stefan Bauer and Tania Salarvand3. Transformational Change Leadership with Neil Wilson and Bill Trotter, and4. Emerging Issues in Health Care and The Role of IC Organizations with Tom Abreu and SharonGabrielsonThe material from the Presentations, Panel Discussions, Poster Session and Workshops has beenposted in the Members Only Section of the AIMC Website. Please contact us at info@aimc.org withany questions.

Photos from the Conference (throughout the Newsletter)

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Daryl Conner Delivers Keynote Address at AIMC Conference

The Presentation by this best selling author in change management focused oneffective change execution and the important role of internal consultants inworking with clients to realize transformational change.This included a description of key success factors in executing transformationalchange programs and insights in recognizing the distinction betweentransformational and other change initiatives.His focus was on a “realization,” defined as achieving the expected value of thechange, — that is when the intended outcomes of the change are attained.This realization focus is an important aspect of the contribution of an effectiveinternal consulting group (ICG) to help achieve proper implementation of keyinitiatives and support a continuous improvement process.Daryl also laid out the key aspects of the internal consultant’s mindset to helpdrive change realization, including:• Being frank and straightforward• Avoiding bad business• Avoiding working harder than the client• Properly surfacing risk, and• Understanding the organization’s capacity to absorb the change and degree of

difficulty in doing so.Details of Mr. Conner’s presentation and their follow-on Workshop are availablein the Members Only Section of the AIMC Website.

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Bill Trotter, AIMC Managing Director

AIMC Chapter Formation UpdateA. International1. European Chapter:

The European Chapter was formed in 2009 and has had several meetings to date. See thefollowing article for more information, including the next meeting scheduled for October 21st inBonn, Germany hosted by Deutsche Telekom.

2. Africa/Middle East Chapter:Initial discussions are underway with interested parties in both Africa (including South Africa andNigeria) and the Middle East (including Dubai, Bahrain and Abu Dhabi). An initial meeting inJohannesburg, South Africa is tentatively scheduled for August 23rd.

3. Far East Chapter:Several members with colleagues in Japan, China and Australia have been discussing opportunitiesin this area.

B. US Based1. DC Metro Chapter:

David Hoff is the AIMC Board Member leading the effort to start meetings this Fall.

2. Mid-West ChapterPlans are underway to kick off a Chapter this Fall with interest expressed by State Farm Insurance,Eli Lilly and Company, Cargill, Amway, Health Care Service Corporation, the Mayo Clinic andConnolly Clarke.

3. West Coast Chapter:Neil Wilson and Carol Gorski, two AIMC Board members, are developing plans for meetings in bothNorthern and Southern California later this year.

Our Vision is to develop a global network of internal consultants, and selected external consultantswith whom they partner, to provide opportunities for networking, information sharing and learning onboth a local/regional and global basis through meetings, affinity group calls, newsletters and our annualinternational conference.Please send us an e-mail at info@aimc.org with the contact information for any colleagues/contactswho you think may be interested.

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Stefan Bauer, Lilly Deutscheland

AIMC’s European Chapter Contributing Value

Neil Wilson, Steve Crom, Juergen Mees,

The AIMC European Chapter held its second meeting in Brussels, Belgium in April, and the nextmeeting is scheduled for October 21st in Bonn, Germany, hosted by Deutsche Telekom. The lastmeeting was attended by representatives from Eli Lilly, Deutsche Telekom, Chevron, ExxonMobil,Cargill, Beiersdorf AG, Bayer Business Services, GTZ (Deutsche Gesellschaft fur TechnischeZusammenarbeit), Valeocon and HLP Organizational Consultants.The theme of this meeting was Organizational Transformation, which included:• An overview of the AIMC’s Transformational Change Leadership Framework• Linkages to the AIMC Consulting Model, and• Case Study presentations by Lilly, Chevron and CargillIn their afternoon work session, the group also generated valuable insights regarding: the distinctionbetween transformation and transition; what more is needed to be done in the area of transformation;and what could be done differently.The output of this session can be accessed by clicking on the link for Local Chapter Activities onthe AIMC Website’s homepage – as will future activities, including logistics information for the nextchapter meeting.Stefan Bauer, the Chapter Leader, has requested that anyone with a colleague or contacts inEurope, please forward their names and email addresses to the AIMC Headquarters(info@aimc.org), so that we can invite them to attend the October meeting. Stefan can becontacted at bauer_stefan@lilly.com.

Inagural Meeting, Brussels, Belgium November 12, 2009

Neil Wilson, Steve Crom, Juergen Mees, Helmut Fehling, Karina Janning, Dirk Pott,Sylvia Glotzbach, Andrew MacNeil, Lisa Oliver, Thomas Leder, Stefan Bauer

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AIMC Board of Directors

New IC Best Practice AwardThe AIMC Board of Directors is offering a new Best Practice in Internal Consulting Award torecognize leading-edge approaches in the following areas:

1. Development and Management of IC Operations and Consulting Processes2. Realizing Significant Benefit/Value-add for the Overall Organizations from the ICG’s Service

Offerings3. Providing Programs to Develop Internal Consulting Capabilities both Within the ICG and

Throughout the Enterprise.Please submit your recommendations for this Award to the AIMC Managing Director at info@aimc.orgby October 1st, 2010. Be sure to include the organization, contact name, email address (if known) anda brief paragraph explaining the rationale for your recommendation.Candidates will then be submitted to the Board’s Nominating Committee for selection of finalists. Thefinalists will then be showcased at next April’s Conference, with the Award presented at the Mondayevening dinner event.

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The AIMC conducted its first industry-focused Workshop to help enhance the skills of internalconsultants in this important and rapidly changing area of our national economy.Attendees included internal consulting leaders from healthcare institutions, health insurancecompanies and pharmaceutical companies in addition to selected external consultants with a highlevel of expertise in the industry.The first part of the Workshop addressed the rapidly changing economic, political/regulatory and legalenvironment in addition to emerging technologies such as electronic medical records. This alsoinvolved the introduction of a conceptual framework to address hospital and physician alignmentoptions.The second part of the Workshop provided insights regarding the role of internal consultants inhelping their organizations succeed in this environment. This included Case Study Presentationsfrom Blue Cross Blue Shield of Massachusetts, Mayo Clinic and Elmhurst Memorial.

Sharon Gabrielson, internal consulting leader at the Mayo Clinic, explored their value equation,strategic plan and the role of the internal consulting group. She then reviewed their program toredesign their group around adding maximum value based on input from customer surveys, includingstandardizing the way they work and leveraging what they do best.Tom Abreu, Director of both internal consulting and strategic planning at Blue Cross Blue Shield ofMassachusetts, focused on the importance of alignment with top management and high-levelplanning processes. He also provided key insights regarding how the IC Group is adding value andcritical success factors.Lois Grubb, VP of Human Resources at Elmhurst Memorial Healthcare, described their key programsincluding gaining alignment through a total rewards model and the three-phase strategy ofperformance management, training/development/talent management, and strategic workforceplanning.All of the presentations from this Workshop are available in the 2010 Conference Presentationsportion of the Members Only Section of the AIMC Website.

Tom Abreu and Sharon Gabrielson

Health Care Industry Workshop

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Neil Wilson and Bill Trotter

Transformational Change LeadershipOne of the Workshops at the recent AIMC Conference was devoted to a discussion of theAssociation’s new Transformational Change Leadership (TCL) methodology.The first topic involved a review of a preliminary Transformation Program Framework andbrainstorming session of concepts of organizational transformation to provide direction for futuredevelopment work.The second topic involved a review of a draft of our new Change Leadership Program (see2010 Conference Presentations in the Members Only Section of the website). This methodologyprovides the most comprehensive approach to leading effective change both at the project andoverall enterprise levels. Based on proven best practices in leading programs, the enterpriselevel includes guidelines on Enterprise Change Management, Project Portfolio Management andIntegrated Competency Development.The project level approach provides guidelines for both the Project Planning & Start-up Phaseand the Project Management & Implementation Phase in -- Sponsorship, Change Positioning,Engagement, Enablement and Project Management.The new methodology also provides an assessment tool to enable you to compare your changeleadership situation, both on the project and enterprise levels, to our knowledge base of bestpractice companies. Then specific insights are listed to help address any gaps.Please contact AIMC Headquarters (Bill Trotter) – info@aimc.org if you are interested inconducting the assessment in your organization. We will send you a form, which can filled outelectronically. Then, after you fill out and return the form(s), we will send you an analysiscomparing it to our Best Practice Knowledge Base.

AIMC Newsletter 9

Connie Conboy, Bob Kelley, Bill Trotter

Additional Benefits of an ICGIn addition to the traditional role of working on client projects, internal consulting groups (ICGs)can increase their value to the enterprise in a number of other ways.One aspect of this to be highlighted in this article is the role of internals in the use of externalconsultants. This will include several Case Study examples of how different companies haveapproached this area.Eli Lilly and CompanyIn the area of external consulting utilization, Eli Lilly and Company has initiated a process ofqualifying externals for internal projects. This involves the internal consulting group providingqualification criteria to their Procurement Department for external consultant utilization in projectsin which they are involved or of which they are aware. This has the benefits of creating aresource pool of externals, whose qualifications are known, for working on projects – thusincreasing the ICG’s ability to be involved in additional projects and to chose the mix of internaland externals involved based on prioritization criteria. Lilly’s ICG also offers training to selectedexternals so that they will be using approved methodologies, thereby ensuring greaterconsistency and quality control.Bayer MaterialScienceBayer’s MaterialScience business created “consulting pods” to better integrate internal andexternal consulting resources to maximize the value to the firm. This involved creating teams ofconsulting resources which included internals and selected external partners to deliver neededservices. It provided a better focus for the overall consulting spend and reduced expenses in thisarea.This was successful at Bayer because the top executives actively supported the approach andrequired managers to utilize it.Roche PharmaceuticalsAnother contribution of ICGs in working with externals is to help negotiate more effectivecontracts. At Roche Pharmaceuticals, a leader in their ICG participated in contract negotiationsto help ensure: a greater focus on deliverables; project delivery by highly qualified externals in allproject areas; and the appropriate transfer of technology to the organization, including training ofcompany personnel for proper implementation and continuous improvement.These programs are not intended to foster adversarial relationships between internals andexternals, but rather to help create effective approaches to further developing a “strategicpartnering” type of relationship which provides a win-win situation for both constituencies andhelps maximize the benefit to the enterprise of its overall consulting spend.

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Perry Hitt, Global OE Manager at ExxonMobil

Developing OE CapabilitiesPerry Hitt, ExxonMobil’s globalmanager of organizationaleffectiveness (OE), providesdirection for a group of OEconsultants in support of operationsaround the world. Their mission is todeliver value-adding, strategic andpractical consulting expertise toachieve business results and buildand sustain OE capability across thecompany.In support of this undertaking, theinternal consulting (IC) groupdeveloped an extensive OE tool kitfor their consultants and HRpartners, including such techniquesas team effectiveness, process(re)design, employee engagement,feedback processes, performancesystems and continuousimprovement.In the area of capabilitydevelopment, the OE Center ofExpertise (CoE) provides an earlycareer roadmap for HR advisors toattain OE skills through basic and fullcompetency levels. This starts withgaining an understanding of the OEpractice, then building a basic levelof OE capability and learning todiagnose opportunities using wholesystems thinking.Individuals who reach the expert andadvanced expert competency levelsare considered candidates for the ICgroup. The IC group is alsosupplemented by experienced hires

from time to time, providing both asource of trained and experiencedcandidates and enabling the coregroup to work on more advanced OEinterventions.The practitioners OE tool kit iscomplemented by a Web-basedemployee change management tool kitto help build OE capability throughoutthe organization. This knowledge basecovers both overall change strategyand the steps for realizing effectivechange, including:• Planning – how to mobilize for

change, design the change, assessthe organization and plan theimplementation.

• Implementing – how tocommunicate to employees, alignthe organization and managetransitions.

• Sustaining – how to engageemployees, manage knowledge,manage processes and evaluatechange.

In addition to accelerating OEcapability development, other keystrategic levers for the group includebeing able to competitively source OEsupport consistent with strategicbusiness priorities, advancing andapplying OE knowledge and livinghealth and wellness values. Theoverarching goal of their OE strategy isto create an intense focus on the fewthings that matter most.

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Sharon Gabrielson, Mayo Clinic

Internal Consulting (IC) Boot CampThe Systems & Procedures (S&P)Group at the Mayo Clinic consists ofmore than seventy internal consultants.Around 18 months ago, theyconducted a survey of both theirclients and staff members to see howthey were doing on providing neededservices, including what was workingwell and not working well and whatcould be done to provide bettersupport. Feedback from clientsindicated, first, that they were not surehow S&P was different than otherinternal support groups (such as thequality office) and when to call on S&P.In addition, clients observed that therewas not a consistent approach toS&P’s work, that is depending on theconsultant, there were variations inproject approach and supporting toolsand techniques.Feedback from the IC staff was thatthey didn’t have standard processesregarding how to approach their workand were lacking a good repository ofauthorized tools and techniques. Theyalso observed that their orientation didnot focus enough on key consultingprocesses.The S&P Group Leadership Teamtook this information to a retreat todevelop a strategic plan. Key outputsof this session were the goal to createa business consulting model and anew education and professionaldevelopment (EDP) Program frominitial orientation to advanced skills withsupporting methods, tools andtechniques.

The internal consultant orientationsegment of the EDP Program is their“boot camp.” In addition to a moduleon the healthcare industry, there are15 other modules covering their ICOperations Model and fourteen CoreCompetencies, including:• Systems thinking• Facilitation techniques• Managing projects• Problem solving• Client relationship navigation• Benchmarking• Customer satisfaction process• Change management• Decision support• Performance measurementThe curriculum currently consists ofboth classroom and on-line, self-directed modules with selfassessments.A critical aspect of convincingleadership to support making thisinvestment was to help themunderstand how it supportedrealizing the value proposition of theinternal consulting group.The S&P Group has also aligned allof their job descriptions andperformance appraisal model toassess how the consultants aredeveloping their core competencies.The IC Boot Camp is positioned asthe beginning of the journey tointernal consulting excellence andthe career ladder for developmentand advancement.

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Carol Gorski, Affymetrix

Building IC Capabilities from a Process Improvement PerspectiveIn mid-2008, Carol Gorski, Senior HR Director atAffymetrix (a mid-sized biopharmaceuticalcompany in California), embarked on a programto build their internal capabilities in leading newproduct teams and improving processes relatedto the development and introduction of newtechnologies. The underlying strategy in thisorganization design was to leverage the internaland informal synergies, or “hot spots” in theorganization and appoint internal thought leadersand high-potential employees to lead specific newproduct teams and support them with projectmanagement experts as well as all relevantfunctional support such as marketing, IT, Finance,etc.Rather than build this program on top of otherfunctional objectives it was decided to create anew function dedicated to cross functional newproduct development and introduction and embedin the organization. Therefore, this effort beganwith the creation of a new organization with thecharter to lead and drive product developmentprocesses across the company. Next, a seniorexecutive was hired to lead this organization andwhich was staffed with a group of professionalproject managers hired to support the newproduct team leaders with strong projectmanagement support. The vision was that theseproduct managers would partner with the newproduct development team leaders and help themdrive new product introduction successfully withinset milestones and time-frames. At this time, HRwas brought in only to develop productcompletion bonuses but not utilized from anorganizational development or consultingperspective.Everything was launched effectively and movingforward for the first few months, then mid-waythrough the original product developmentschedule for the various teams, a status checkindicated that all the teams were significantlybehind schedule. The senior executive that washired to lead the project management of theseteams conducted a quick survey of teammembers and stakeholders to get a better senseof what might be disrupting the effectiveness of

the teams. The survey data revealed two keyblockades: a lack of trust between the functionalareas and lack of team effectiveness due toconflict in the teams. The lack of trust issue wasparticularly relevant because it contributed to thebehavior of not raising significant issues to theteam lead.After reviewing this survey data with the seniorexecutive leading this project management, it wasagreed that Carol and her HR team couldparticipate on the teams to observe and assistwith team dynamics. Initially, he agreed to haveHR Business Partners observe but since hehadn’t worked with HR before as an integralmember of the team and an OD professional theinternal HR wasn’t fully utilized originally. Afterthe survey results were in, then, an HR BusinessPartner was assigned to each product team tofocus on personnel issues, internal teamdynamics in addition to performance incentives.In assessing how the HR Business Partnersadded value to make the teams more successful,it was observed that the product/project teammanagers were not skilled in key changemanagement/OE/OD skills, such as stakeholderanalysis, meeting facilitation, dealing with conflictand coaching.The idea then surfaced to train the HR teammembers to take more of an expanded businesspartner and change management role withresulting training for them — which they in turndelivered to all product team members.This also involved training on building trust andcollaborative leadership and team behavior – andpositioning the HR consultant as a “trustedadvisor.”An interesting side note is that after reviewing thecontents of our new Transformational ChangeLeadership methodology, Carol observed that thisapproach of integrating best practice approachesto both project and change management wouldprovide great benefit to product teams in this andother industries.

AIMC Newsletter 13

John Arceri, Consolidated Edison, NY, R. Schaffer & Bill Trotter

Tough Times for Electric Delivery Companies -- the Right Time for Rapid Results

OverviewOur electric delivery industry is facing a crisis.We have seen the slumping economy result inlost customers, lower revenues and morecostly collections. And our aging infrastructureis badly in need of replacement. Much of ourexperience in the form of the aging workforceis being lost. At the same time, customers andregulators demand lower rates and improvedreliability. What a difficult situation we face.We need to move and most fast if we are tomake it through this crisis. Hopes cannot bepinned on long-term projects that promiseimprovement in the distant future. Costs needto be reduced quickly while improving thequality of service. The traditional “same olds” –cuts in overtime, reducing staff and training,and eliminating merit increases – have limitedeffectiveness and are hurting us long term.There is a better way; we need to embrace“Rapid Results.”This better way is based on a simple premise:there is nothing like a crisis to create dramaticand immediate improvements in performance.A perfect example of this is how utilityemployees respond to major storms. United inpurpose, they overcome obstacles and restorepower in a fraction of the time their normalpace would require. Why? Every companyhas a tremendous capacity for betterperformance if unleashed under the rightcircumstances. People innovate, theycollaborate and they abandon inefficient workmethods. These breakthroughs inperformance take place in every industry butparticularly in electric delivery companies.A Case Study: Connecticut Light & PowerConnecticut Light & Power needed to improvereliability performance and focused on theCustomer Average Interruption Duration Index(CAIDI). Their average outage duration was

127 minutes for the first eight months of theyear (What year?) The year-end goal of 125minutes appeared unachievable with only fourmonths left. Using Rapid Results, they formeda cross-functional team, consisting of peopleclosest to the work: line supervisors, systemoperators and crew dispatchers. Theexecution plan consisted of four key elements:

1. Involvement of people at all levels of theorganization.

2. Clear expectations and accountabilityfor progress.

3. Empowerment of teams to set goalsand create work plans.

4. One hundred-day implementation timeframes to force innovation and deliverresults.

The first task was to evaluate past reliabilitydata and identify the greatest opportunity forrapid improvement. This evaluationdiscovered that, although CL&P’s outagerestoration worked well for most of the year,there were 20 days each year whereperformance suffered during mid-sized storms.The team’s focus went from how do we fixparticular problems to how do we manageevents when these type of storms occur.Improvement had to be “event driven” not“cause driven” to discover the critical elementsof effective outage response.The team developed a Rapid Results goal toachieve a “model month” of outage-restorationperformance, where no one day wouldcontribute more than one minute to the overallCAIDI measure. Thy changed the outage-restoration process along four dimensions:

1. Early recognition of the escalatingoutage events

2. Targeted warning system across theorganization

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3. Immediate decision-making in response to conditions.4. Better utilization of field resources.

By monitoring conditions, engaging decision-makers, deciding on the right course of action andmobilizing resources faster, CL&P achieved a CAIDI of 91 minutes in September, the first monthof Rapid Results implementation. This was a 28.35% reduction in restoration time compared tothe first eight months. In addition, CL&P’s performance continued to improve in the final monthsof that year and it ended the year with a CAIDI of 122 minutes. This level met their goal andrepresented a record best year for CL&P.Best of all, unlike most performance-improvement methods, a company can test the RapidResults approach quickly, easily and with very little cost. Once it succeeds they can move aheadas fast as they want.Each company’s Rapid Results support team, consisting of two or three experiencedprofessionals, helps senior management to select the goals and name their Rapid Resultsteams to achieve them.Key Role of Internal ConsultantsOne of the key factos in the success of the Rapid Results approach is the effective utilization ofinternal managers to help plan for and realize the benefits. Many managers and individualcontributors learn valuable internal consulting skills during these projects. In addition, thelearnings during their project exposure will enale them to build a culture of continuousimprovement to sustain superior performance.

John Arceri, Consolidated Edison, NY, R. Schaffer & Bill Trotter

Tough Times for Electric Delivery Companies -- the Right Time for Rapid Results