Organizational Change and Leadership Development

Stratety + The Denison Model TM

Agenda

The Organizational Model

The Link to Performance

The Culture Survey

The Leadership Survey

When do these things matter?

Mergers & Acquisitions

Transformation & Turnaround

Aligning Strategy & Human Capital

Talent Management & Leadership Development

Leadership Transitions

Culture Change

The Organizational Model

Adaptability Pattern..Trends..Market

Translating the demands of the

business environment into action

“Are we listening

to the marketplace?”

Mission Direction..Purpose..Blueprint

Defining a meaningful long-term direction for the Company

“Do we know where

we are going?”

Involvement Commitment ... Ownership …

Responsibility

Building human capability, ownership, and responsibility

“Are our people aligned

and engaged?“

Consistency Systems… Structures…

Processes

Defining the values

and systems that are the basis of a strong culture

“Does our system create leverage?”

What Counts…

Flexible and Stable

Flexible Adaptability + Involvement A flexible organization has the capability to change in response to the environment

Stable Mission + Consistency A stable orientation contributes to an organization’s capability to remain focused and predictable over time

External Focus and Internal Focus

External Focus: Adaptability + Mission The organization’s focus is on adapting and changing in response to the external environment

Internal Focus: Involvement + Consistency The organization’s focus is on the dynamics of the internal integration of systems, structures, and processes

Dynamic Tension: High performance organizations learn how to link the purpose, direction, and goals of the organization (top - down) to a shared sense of responsibility, ownership and commitment with all employees (bottom - up). Employees understand the relationship between their individual goals and the organization’s goals and are highly motivated to contribute.

Dynamic Tension: Successful organizations learn how to cope with the dual problems of external adaptation (stimulate progress) and internal integration (preserve the core). It is not an either/or proposition - high performance organizations must be able to do both at the same time.

The Link to Performance

Culture Links to Performance

Innovation &

Customer

Satisfaction

Stable

Performance

Over Time

Profitability

ROI, ROE

Operating Performance

Quality

Employee Satisfaction

Growth

• Study of Automotive Service Centers in the USA • Total of 338 dealerships and over 12,000 employees • Compares organizational culture and customer satisfaction

Satisfying Your Customers

Below 50% Highly Satisfied Above 80% Highly Satisfied

Impact on Performance

Return-on-Assets 4.5%

Sales Growth .1%

Market-to-Book Ratio 3.5

Return-on-Assets 6.3%

Sales Growth 15.1%

Market-to-Book Ratio 4.4

If we compare the 102 firms in the top and bottom 25% based on their overall average of the 12 indexes, companies with higher culture scores have greater profitability, sales growth, and market value than those with lower culture scores.

Top 25% Bottom 25%

“We have the same ingredients and use the same ovens, but it’s the skills, attitude and experience of the workforce that differentiates the brands.”

- David Brandon

Chairman and Chief Executive of Dominos Pizza

Understanding the Results

1076 companies in 48 Countries 75% North American, 15% Europe, 7% Asian,

3% Africa/Middle East/Central & South America

Wide classification of industries using the North American Industry Classification System (NAICS)

Different Industries and different Countries, on average, have very similar results to the global benchmark

We recommend using the Global Benchmark Composites are available for many different

Industries and Countries

Global Benchmark

Culture Survey: Roadmap for Success

Needs Analysis (Kick-off Meeting)

Creation of Project Plan

Creation of Test Survey

Review of Demographic File &

IT Requirements

Communication Plan Launch of Live

Survey Monitor Survey

Process Reporting of

Results

Analyze Results, Debrief & Action

Plan

Research Links to Performance

Post Action Review

Change Monitor to Evaluate Progress

Culture Example:

100-Year-Old Manufacturing Company

This is one of the four key traits that

impact business performance.

This is one of the three indices that measure

behaviors for this trait. Each of the twelve indices

consists of five survey items.

This is a percentile score. A percentile is your

organization’s score as a percentage benchmarked

against the average of other organizations.

(This average is called a norm.) This

organization, for example, scored better than 68 percent of all of

the companies in the database in the area of Goals and Objectives.

The profile is colored to show the quartile

in which the percentile falls. This score, for example,

falls in the third quartile.

Case Study: 100 Year Old Manufacturing Company

•First in industry, but declining •Trying to hold on to the past •1st time in 20 years failed to meet targets •Targeted by competitors •President operationally focused •“We’re a team going down together”

Case Study: 100 Year Old Manufacturing Company

What patterns do you see in this organization?

What are their strengths?

What are their weaknesses?

What might this mean for their business?

Case Study: 100 Year Old Manufacturing Company

Strengths Effective at producing the same products and services

Team work is encouraged

Short term goals are clear

Vulnerabilities Not listening to the marketplace: they will be overtaken by their competitors quickly

No innovation to keep them going in the future

Not listening to their customers

“With your low

Adaptability scores, I can

respond to the market

more quickly with

innovative products and

beat this company in

market share.”

“With your low Empowerment and

Capability Development scores, your

top talent is probably hard to attract and

harder to keep. As a competitor, I’ll try

to steal your best talent away from you.”

“You have a sense of your short term

goals and objectives, but they are not

being informed by your long term

vision. This tells me that your good at

execution, but with no real sense of

direction.”

Leadership Development

Leadership Development Survey

Helps managers and leaders to:

Identify specific areas of strength and weakness, and establish action plans for individual development

Learn how specific management skills and practices impact leadership performance

Develop leadership skills necessary to adapt to a changing environment

Understand their roles in creating a high-performance culture in their organizations

Leadership Model

Global Benchmark

11,953 leaders included in the normative database (up from 8,651)

From over 800 companies and rated by over 184,000 bosses, peers, and direct reports

Wide variety of industries, job function, management level, and tenure represented

Benchmarks are stable across years

Support

Support Resources

Workshops

Webinars

Case Studies and Research Notes

Product Guides

Research and Analysis

Global Network

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